The market rebounded for the first time in nine weeks, ending 0.44 percent higher in the week ended October 9, as buying in three of the five trading sessions helped the benchmark indices snap an eight-week losing streak. The recovery was driven largely by short-covering and value buying following the recent sharp correction. A rally in technology stocks after TCS reported its September-quarter results, along with oversold conditions, also supported the recovery.
However, the RBI's shift in policy stance from neutral to calibrated tightening, coupled with a 25-basis-point repo rate hike, added to market volatility. Overall gains remained capped as the broader market structure continued to be weak amid elevated crude oil prices, persistent FII selling pressure, and the rupee's depreciation against the US dollar.
Going ahead, caution is likely to prevail in the week starting October 12, despite the market snapping its eight-week losing streak, as global risks remain elevated. Investors will focus on further corporate earnings announcements, inflation data from India and the US, crude oil prices, geopolitical developments, US bond yields, rupee movements, and FII flows. The speech by US Federal Reserve Chair Kevin Warsh will also be in focus, according to experts.
The Nifty 50 gained 98.5 points, or 0.44 percent during the week, to close at 22,520, while the BSE Sensex climbed 563 points, or 0.78 percent, to settle at 72,472. The Nifty Midcap 100 and Nifty Smallcap 100 indices also advanced, gaining 0.09 percent and 0.5 percent, respectively.
"Indian equities are likely to remain cautious amid elevated global risks," said Siddhartha Khemka, Head of Research, Wealth Management, at Motilal Oswal Financial Services.