Nifty Reclaims 23,000 on October's Final Session Led by IT and Pharma

Markets closed October on a firmer footing on Friday, with benchmark indices posting gains for the third consecutive session. Despite the positive headline figures, deteriorating market breadth served as a reminder that the broader recovery remains uneven.

The Nifty 50 gained 0.51 per cent to close at 23,053, successfully reclaiming the 23,000 mark for the first time in eight sessions. Meanwhile, the Sensex rose 0.42 per cent to close at 74,459.53. On a weekly basis, the Nifty ended 2 per cent higher and the Sensex gained over 1,300 points.

However, market participants noted that the headline index numbers masked significant underlying weakness. According to Sarvam Goel, Founder of Pocketful, nearly two and a half times as many stocks fell as rose during the session. Within the Nifty 500 universe, only 108 stocks advanced, while the Nifty Midcap 100 and Nifty Smallcap 100 indices ended in the red, falling 0.93 per cent and 1.85 per cent respectively. The India VIX also climbed around 3 per cent to 15.6.

Sectorally, IT, healthcare, and pharma stood out by drawing buying interest. Conversely, capital goods, industrials, telecom, auto, PSU banks, media, and consumer durables lagged behind. Trent emerged as a top Nifty gainer, rising nearly 7 per cent following strong second-quarter results and the milestone of Zudio crossing 1,000 stores. IndiGo also ended firmly in the green, while Adani Ports and Shriram Finance were among the key laggards. In the broader market, Laurus Labs rose over 7 per cent after its quarterly profit more than doubled.

Macroeconomic concerns centered heavily on crude oil. Brent December futures surged to $117.8 a barrel, reaching their highest level since April, driven by geopolitical tensions in the Strait of Hormuz and developments involving Iran and the US. Elevated crude prices continue to pose a direct risk to inflation and monetary policy trajectories.

Precious metals offered little safe-haven relief, with spot gold slipping below $3,970 an ounce and silver tumbling over 3 per cent to around $50.4 an ounce. Domestically, MCX Gold fell around ₹1,100 to ₹1,41,500. Jateen Trivedi, VP Research Analyst at LKP Securities, noted that ₹1,38,500 remains an important technical support level, with ₹1,43,500 acting as immediate resistance.

Bucking the commodity pressure, the Indian rupee strengthened by approximately 0.27 per cent to 94.95 against the US dollar as the Dollar Index softened towards 101.65. Foreign institutional investors (FIIs) turned net sellers on Friday following a brief buying spell, while domestic institutional investors (DIIs) continued to provide domestic support.

Gaurav Bhandari, CEO of Monarch Networth Capital, stated that the Dollar Index is showing signs of topping out, which could encourage fresh capital flows into Indian markets as dollar weakness accelerates. He suggested that investors use interim dips to build positions in quality names across financials, infrastructure, and domestic consumption themes.

Looking ahead, market participants face a heavy corporate earnings calendar over the weekend and next week, alongside the upcoming US midterm elections on November 3. Companies including Reliance Industries, NTPC, Power Grid, Muthoot Finance, CDSL, NSDL, ITC, and Marico are scheduled to report their earnings. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, expects Indian equities to remain range-bound with bouts of volatility, identifying geopolitical uncertainty and elevated crude as primary headwinds. For the Nifty, 22,800 is viewed as a key support level, while a decisive close above 23,200 is required to signal a stronger recovery phase.

"The recent market movement highlights the classic divergence between headline indices and broader market health. While large-cap benchmarks like the Nifty and Sensex closed the month on a positive note, the underlying breadth shows that caution is warranted among investors. Geopolitical headwinds, particularly rising crude oil prices, continue to pose macroeconomic challenges for inflation and monetary policy. For entrepreneurs and business leaders navigating this environment, maintaining financial prudence and focusing on fundamental operational strength remains critical amidst short-term market volatility." — Dr. Shishir Gupta, Founder & CEO, StartupLanes