Why did market rise today? Sensex jumps 473 points, Nifty closes above 22,550: 6 key factors driving rebound

The Indian stock market closed in the green on Monday, with the Sensex and Nifty finding some relief after recording losses for eight straight weeks, the longest streak in 25 years.

The Sensex gained around 473 points to close at 72,382, while the Nifty 50 rose around 134 points to end the session at 22,556. Broader markets also recorded gains, with the Nifty Smallcap 100 and Nifty Midcap 100 indices rising up to 0.7%.

ITC shares jumped over 4% to lead gains on the Sensex, while Eternal, Bharti Airtel, Bajaj Finance, Adani Ports and ICICI Bank shares rose over 2% each. Bucking the trend, HCL Tech shares plunged around 4%, while HDFC Bank, Sun Pharma, Infosys and Asian Paints shares fell 1-2%.


Among sectors, the Nifty FMCG and Nifty Consumer Durables indices jumped around 2% each to lead gains, while Nifty Healthcare and Nifty Pharma slipped nearly 1% each. The overall market breadth, however, remained negative, with the NSE seeing 1,745 advances against 1,846 declines, while 115 stocks remained unchanged.

Here are the 6 key factors boosting market today.

1) HDFC Bank appoints Anup Bagchi as CEO

HDFC Bank has appointed ICICI Bank veteran Anup Bagchi as its Managing Director and CEO, with the Reserve Bank of India approving his appointment for a three-year term from October 27 onwards. This clears up a key leadership hurdle that has been spooking investors since March this year after former part-time Chairman Atanu Chakraborty resigned, saying some practices within the bank did not align with his personal values and ethics.

Anup Bagchi will transition from the role of managing director and CEO of ICICI Prudential Life Insurance which he has been holding for the past three years. Before becoming the CEO at the insurer in 2023, he was an executive director at ICICI Bank from 2017, heading the wholesale banking, transaction banking, markets group and the proprietary trading group.

Also read | Anup Bagchi's big test at HDFC Bank is winning back investor trust

Nomura earlier had said that a credible external candidate could offer a longer runway and a cleaner slate. Heavyweight HDFC Bank shares gained more than 2% in early trade today, boosting the overall sentiment on the stock market and adding to the relief.

2) Oil prices ease

Oil prices dipped below $102 per barrel as higher crude exports from the Middle East and plans by G7 nations to release oil stocks added to supply, even as concerns remained over the risk of further damage to Gulf oil infrastructure amid the Iran war. Brent crude futures traded near $101.5 per barrel and WTI Crude futures fell to $90 per barrel.

The G7 countries agreed last week to release 100 million barrels of diesel and crude from emergency reserves and pledged to refrain from energy export restrictions after pressure from US President Donald Trump. The release will add to Middle Eastern crude exports, which rose above pre-war levels in four of the seven days of the final week of September, according to shipping data quoted by Reuters.

3) Fed rate hike worries ease

The probability of a rate hike by the Federal Reserve during the American central bank’s October meeting has fallen to around 20% after the US economy added fewer jobs than expected. US nonfarm payrolls increased 29,000 last month after a downward revision to the previous two months. This missed all estimates in a Bloomberg survey of economists. The unemployment rate rose to 4.2%, partly reflecting a growing workforce.

“Not too hot, not too cold Goldilocks jobs data for September add to expectations that the Fed won’t rush into another rate hike this month,” Bloomberg quoted Shane Oliver, chief economist and head of investment strategy at AMP.

4) Relief after 8-week losing streak

Today’s gains may also have been driven by value buying after Sensex and Nifty reported an eight-week long losing streak, the longest in 25 years. The losing streak overtook the 2020 COVID-19 crash and 2008 Global Financial Crisis when the indices fell for seven straight weeks.

“After eight weeks of declines the market appears set for a rebound in the near-term,” said V K Vijayakumar, Chief Investment Strategist at Geojit Investments. He noted that valuations have turned attractive, particularly for large-caps, after the sharp correction.

5) Rupee rises

As a result of the easing oil prices and Fed rate hike bets, rupee rose 5 paise to 96.20 against the US dollar in early trade. This comes after the Indian currency has been under sustained pressure, slipping past the 96-per-dollar level to a fresh two-month low last week.

“Going ahead, markets will focus on the RBI policy decision next week, with expectations of a rate hike amid the current macroeconomic environment. The currency is likely to remain volatile, with the range seen between 95.75–96.75,” said Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities.

6) Bond yields decline

Bond yields meanwhile cooled down slightly after soaring to multi-decade highs last week. The yield on the 30-year US bonds stood at around 5.6%. The yield on the 10-year notes meanwhile decreased to 5.26% on Monday.

The previous selloff seen on Dalal Street was intensified by the soaring bond yields, which typically make debt markets more attractive to investors, which in turn puts pressure on the emerging equity markets. Bond yields move inversely to bond prices, so soaring yields reflect a sharp selloff in bonds.

Also read | Market crash wipes out Rs 26 lakh cr in 8 weeks! Why soaring bond yields may hurt Sensex, Nifty more than elevated oil prices

What lies ahead for Dalal Street?

While investors find some relief as the bulls finally make a comeback on Dalal Street, caution is still warranted. While oil prices and bond yields have eased, they still remain elevated. The flip flop Middle East conflict also may keep investors on the edge.

Analysts now expect the RBI to raise rates by 25 bps on October 7 after its MPC meeting. The market has however already largely discounted this, according to Vijayakumar from Geojit Investments. “Banks will benefit from the rate hike since rising floating rates will improve their margins,” he said.

Technical view on Nifty

Nifty is now in the close vicinity of a horizontal support region that is formed by 21,743 and 22,182, the reaction lows of 2025 as well as 2026 respectively, both seen in April months, said Anand James, Chief Market Strategist at Geojit Investments. He noted that this support region, having helped reverse major downtrends in the last two occasions, encourages the analyst to expect the same now.

Alternatively, the break of this region would mark the end of the uptrend that has been on since Covid-19 and could expose 19,000 and 16,700, the 38 and 50% retracements respectively from the pandemic low, the technical analyst warned.

Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.