The Indian stock market has extended gains for the fourth consecutive week, marking the first such occurrence in 2025. This rally is fueled by a combination of factors, including hopes of an India-US trade deal, Foreign Institutional Investors (FIIs) turning net buyers, and a strong set of Q2 FY26 earnings.
Key Market Highlights
The BSE Sensex gained 259.69 points (0.30%) to close at 84,211.88.
The Nifty 50 index rose 85.3 points (0.33%) to end at 25,795.15.
The Nifty IT index was the top sectoral gainer with a 3% increase.
Other sectors with notable gains included PSU Bank (+2%), Metal (+1.5%), Media (+1.3%), and Oil & Gas (+1%).
The FMCG and Auto indices declined slightly by 0.5% each.
Market leaders in terms of value addition were Reliance Industries, Tata Consultancy Services, Infosys, and State Bank of India.
Stocks like ICICI Bank, Hindustan Unilever, and Eternal witnessed a significant drop in market capitalization.
Institutional Activity
FIIs turned net buyers after a period of selling, purchasing equities worth Rs 342.74 crore for the week.
Domestic Institutional Investors (DIIs) continued their buying streak for the 27th straight week, investing Rs 5,945.31 crore.
The Indian rupee strengthened marginally, closing 12 paise higher at 87.85 per US dollar.
Market Sentiment and Consequences
The extended gain streak and net buying by FIIs have brought optimism to the market, supported by stable corporate earnings and improving macroeconomic indicators. Retail inflation has eased to 1.54% in September 2025, contributing to positive sentiment. The ongoing festive season has also helped boost consumer spending, indicating a robust domestic demand.
With FIIs turning buyers and strong domestic inflows, the market is expected to continue its upward trajectory, possibly leading the Nifty index towards the 29,500–30,000 range by the next Diwali, reflecting a positive medium-term outlook.
However, caution remains as global trade tensions, geopolitical developments, and recent moderation in the output of core industries could introduce volatility. Additionally, while FIIs have recently turned buyers, their net outflow over the past months suggests they remain cautious, closely watching trade deal developments and domestic political events like the upcoming Bihar elections.
Summary of Consequences
Sustained market gains could increase investor confidence, leading to higher investments.
Positive market momentum may benefit sectors like IT, PSU banks, metals, media, and oil & gas.
The strengthening rupee may help ease imported inflation pressures.
Domestic consumption looks set to remain healthy during the festive season and beyond.
Potential volatility due to external geopolitical and trade issues necessitates cautious optimism.
Continued FII buying, if sustained, could provide further market support.