Indian equities staged a sharp recovery on Monday after starting the session under heavy selling pressure. However, market sentiment remained cautious as crude oil hovered near $115 a barrel and the rupee weakened against the US dollar.
The Sensex fell more than 500 points shortly after the opening bell, while the Nifty slipped towards 22,400. By late morning, both indices had recovered much of their early losses. The Sensex moved back above 73,300, while the Nifty climbed past 22,600, putting both benchmarks marginally in positive territory.
The recovery in the Indian stock market today came after four consecutive losing sessions. However, the rebound was not strong enough to ease the broader concerns surrounding the market.
Sensex Rebounded Sharply From the Morning Low
Monday’s session began with heavy selling across the market.
At around 9:25 am, the Sensex was down about 563 points at 72,561, while the Nifty had fallen nearly 200 points to 22,400.50. Banking, IT and auto stocks were all trading lower at that point.
Less than an hour later, the market had made a sharp recovery.
By around 10 am, the Sensex had gained more than 800 points from its intraday low and was trading above 73,300. The Nifty had also climbed back above 22,600.
Around midday, the Sensex was near 73,320, up roughly 196 points, while the Nifty 50 stood at around 22,652, gaining approximately 52 points.
The sharp movement showed how uncertain market sentiment remains. Buyers are stepping in after steep declines, but concerns over oil prices, the rupee and global developments continue to weigh on investors.
Value Buying Helped After Last Week’s Selloff
One reason behind Monday’s recovery was that stocks had already seen considerable losses in the previous week.
The Nifty fell 2.36% during the shortened week ended October 23, losing 546 points to close at 22,600. Broader-market stocks faced even greater selling pressure.
This correction created room for value buying on Monday morning as the initial selling eased.
Foreign investors also offered some support ahead of the session.
Foreign institutional investors (FIIs) bought Indian equities worth ₹887.65 crore on October 23, ending a period that had included several heavy selling sessions. Domestic institutional investors (DIIs) were stronger buyers, purchasing shares worth ₹3,235.36 crore.
The return of FII buying is encouraging for the Indian stock market. However, one session of buying is not enough to confirm a sustained change in foreign investor sentiment.
Crude Oil Is Still the Market’s Biggest Headache
Crude oil remains one of the biggest concerns for Indian equities.
Brent crude was trading around $114–115 a barrel on Monday after reaching nearly $117 late last week, its highest level in almost six months.
Prices eased slightly during Monday’s trade, offering some relief to the domestic market. However, crude oil at around $115 a barrel remains expensive for India, which imports most of its oil requirements.
If energy prices remain elevated for a prolonged period, India’s import bill could rise further. Higher oil prices can also add to inflation and increase costs for businesses in sectors such as aviation, paints, chemicals, logistics and consumer goods.
This is why crude oil prices remain an important factor for Indian equities, even after the slight decline from last week’s peak.
Infosys Kept IT Stocks Under Pressure
The market recovery was not spread evenly across all sectors.
Information technology stocks remained under pressure after Infosys cut its annual revenue-growth forecast, citing continued weakness in its important North American market.
The decline in Infosys shares weighed on the Nifty IT index, even as the broader market benchmarks recovered.
Around midday, the Nifty IT index was down roughly 0.4%, while the Bank Nifty was also slightly negative. Automobile shares were broadly flat.
This meant the recovery in the Nifty 50 was being supported by strength in selected stocks rather than a broad rally across sectors.
Investors are also becoming more selective during the Q2 earnings season. Companies reporting stronger profits or better outlooks are finding buyers, while those showing signs of slower growth are facing pressure.
Dr Reddy’s and Kotak Bank Found Buyers
While several stocks remained under pressure, some companies moved higher after reporting their quarterly results.
Dr Reddy’s Laboratories gained after reporting stronger-than-expected quarterly profit. Kotak Mahindra Bank also moved higher following its Q2 results.
Reuters reported gains of around 3% for Dr Reddy’s Laboratories and 2.3% for Kotak Mahindra Bank earlier in the session.
Shriram Finance, on the other hand, remained under pressure after cutting its loan-growth outlook. Investors continued to worry about elevated credit costs and stress in some rural lending markets.
The contrasting performance of these stocks highlights the growing importance of company earnings as the broader market struggles to find a clear direction.
The Rupee Slipped Back Above 95 Per Dollar
The currency market added another reason for caution on Monday.
The Indian rupee weakened to around 95.12 against the US dollar by late morning, down roughly 0.18% from its previous close.
Dollar demand from importers and elevated crude oil prices contributed to the weakness. Traders also noted the absence of the kind of RBI dollar selling that had supported the currency during several recent sessions.
The movement of the rupee remains closely linked to crude oil prices. When oil becomes more expensive, Indian importers need more dollars to pay for energy purchases. This can increase demand for the US currency and put additional pressure on the rupee.
India’s foreign-exchange reserves have also declined for six consecutive weeks. Reserves fell by around $5 billion to $721 billion in the week through October 16.
The Fed Decision Is the Next Global Test
Investors are also looking ahead to this week’s US Federal Reserve meeting.
The Fed is widely expected to leave interest rates unchanged. However, investors will closely examine its comments for clues about the possibility of a rate change in December.
A more hawkish tone could strengthen the US dollar and push US bond yields higher. This can put pressure on emerging markets because higher returns on US assets may encourage global investors to reduce their exposure to other markets.
India remains particularly sensitive to these developments as foreign investor flows have been volatile and elevated oil prices are putting pressure on the rupee.
Although Monday’s Sensex and Nifty recovery looks encouraging, investors may remain cautious ahead of the Fed’s policy decision.
Monday’s Bounce Has Not Settled the Bigger Debate
The recovery from the morning lows shows that buyers are still willing to enter the market after a sharp correction.
The Sensex recovered hundreds of points, while the Nifty moved back above 22,600 after briefly threatening to fall decisively below 22,400.
Foreign buying on Friday and a slight easing in crude oil prices offered some support. However, the concerns behind last week’s decline remain largely unchanged.
Brent crude is hovering near $115 a barrel, the rupee has moved back above 95 against the US dollar, IT demand remains uneven, and the Federal Reserve’s decision is approaching.
For now, the stock market recovery today looks more like an intraday rebound than a confirmed change in the broader trend.
A stronger and more sustained recovery may depend on crude oil prices cooling further, the rupee stabilising and corporate earnings providing enough positive surprises to offset global uncertainty.
Until then, sharp swings may remain a feature of the Indian stock market as investors continue to weigh domestic earnings against global risks.
