Domestic equity markets staged a strong recovery on October 5, with the Sensex gaining 683 points and the Nifty crossing 22,600. Banking and IT stocks led the rally ahead of the RBI monetary policy decision.
Following sustained foreign institutional selling and elevated global bond yields, domestic equity markets staged a strong recovery on Monday morning. Investors who watch macroeconomic indicators saw benchmark indices rebound sharply from Thursday's slump, where the BSE Sensex had dropped 570.59 points to settle at 71,909.70 after hitting a 52-week low of 71,292.88.
A quick read of the October 5, 2026, session showed renewed buying. By 9:49 am, the Sensex was trading at 72,592.99, gaining 683.29 points, or 0.95 percent. The NSE Nifty jumped 188.60 points, or 0.84 percent, to 22,610.55. The broader market mirrored this optimism, with the Nifty Midcap 100 rising 1 percent.
Banking and IT drive momentum
Banking and financial stocks emerged as primary drivers. The Nifty PSU Bank index surged 1.98 percent, while the Nifty Bank rose 1.20 percent. Axis Bank gained 1.54 percent, and SBI rose 1.21 percent. Bajaj Finance was the top Sensex gainer, advancing 4.29 percent.
Related Articles
In a post shared with clients, V K Vijayakumar, chief investment strategist at Geojit Investments, explained the recovery.
"After eight weeks of declines, the market appears set for a rebound in the near-term. The better-than-expected results of Accenture and the appointment of Anup Bagchi as MD and CEO of HDFC Bank have the potential to lead a turnaround in the market. Even though the headwinds coming from elevated crude prices, high US bond yields and sustained FII selling remain; the market is unlikely to be dragged down further since the valuations have tuned attractive, particularly for large-caps. There are strong tailwinds, too. The September auto sales numbers are good, indicating a structurally resilient economy," said Vijayakumar.
RBI policy and laggards
While the Nifty IT index moved up 1.43 percent, supported by a 2.32 percent jump in TCS, some sectors remained weak. The Nifty Auto index fell 0.37 percent, and the Nifty Pharma index declined 0.46 percent.
Market volatility eased, with the India VIX declining 0.83 percent to 14.34. Participants now await the RBI's monetary policy decision on October 7. A 25-basis-point repo rate hike is widely anticipated.
