Indian equities snap four-day losing streak as Nifty reclaims 22,750; rupee hits three-session low

Indian markets registered a dramatic turnaround on Monday, helping the Nifty 50 snap a four-session losing streak. The benchmark Nifty touched an intraday low of 22,387 before recovering nearly 370 points to close at 22,753.20, gaining 153.20 points or 0.68 per cent. The Sensex followed a similar trajectory, settling at 73,606.75 after rising 482.92 points or 0.66 per cent from an intraday bottom of 72,514.57.

Broader markets outperformed the headline indices. The Nifty Midcap 100 index rose 1.19 per cent, and the Nifty Smallcap 100 gained 1.38 per cent. This offered a partial recovery following a combined collapse of over 12 per cent in the previous week. Hariselvan Radhakrishnan, Founder and CEO of HST Wealth, noted that the rebound was driven by buying near recent support zones, a pullback in crude prices from last week's highs, and strength in healthcare alongside select heavyweight stocks.

Sector performance was largely positive, led by Metal, Pharma, Healthcare, Oil and Gas, and Capital Goods. The Nifty Metal index advanced 2.2 per cent, aided by India's draft National Steel Policy Vision 2047, which aims for a domestic crude steel capacity of 604 million tonnes. The Nifty Pharma index added 1.8 per cent due to defensive buying. On the individual stock front, Dr. Reddy's Laboratories led the Nifty 50 gainers by jumping 7.08 per cent to ₹1,316.60, while JSW Steel rose 4.27 per cent to ₹1,236.10. Conversely, Shriram Finance was the session's biggest drag, declining 4.47 per cent to ₹826.35, followed by Tata Consumer Products, which fell 3.64 per cent to ₹928.85. Media and Consumer Durables were the only sectors to finish the session in the red.

Despite the positive movement in equities, the Indian rupee weakened for the third consecutive session. The currency fell 25 paise to close at 95.19 against the US dollar, pressured by softer Asian currencies and rising domestic bond yields. Brent crude prices eased slightly to around $115 per barrel compared to Friday's near six-month high of $116.72. However, West Asia supply risks—such as ongoing attacks on Saudi infrastructure—kept energy prices elevated. Ajit Mishra, SVP of Research at Religare Broking, highlighted that persistent tensions in West Asia continue to fuel concerns regarding global energy supplies.

Market participants are now turning their attention to a busy macroeconomic calendar. The US Federal Reserve is scheduled to announce its rate decision on October 28, followed by the European Central Bank on October 29 and the Bank of Japan on October 30. Dilip Parmar, Research Analyst at HDFC Securities, stated that volatility is likely to remain elevated given the three major central bank decisions lined up for the week. Additionally, corporate earnings reports are due from companies including Tata Steel, Waaree Energies, and United Breweries.

Siddhartha Khemka, Head of Research for Wealth Management at Motilal Oswal Financial Services, observed that markets are expected to trade sideways until clearer cues emerge from global policies and developments. For the Nifty 50, analysts note that a sustained close above 22,800 is required to extend the current recovery toward 23,000, while 22,600 serves as the immediate technical floor.

"Monday's market rebound demonstrates the resilience of domestic equities following a sharp correction last week. However, business leaders and investors must remain cautious. With major central bank rate decisions ahead and persistent energy supply concerns keeping oil prices elevated, volatility is expected to continue. It is prudent for businesses and investors to monitor macroeconomic triggers closely rather than reacting to short-term intraday swings." — Dr. Shishir Gupta, Founder & CEO, StartupLanes