Key Points

This surge was fuelled by a widespread rally and renewed optimism regarding the resumption of India-US trade talks and the US Fed rate cut. The figure is currently just 2.7 per cent shy of the all-time peak recorded on September 27, 2024, with nearly Rs 20 lakh crore added since the beginning of September.

Potential easing by the Reserve Bank of India (RBI) in October also boosted investor sentiments, as domestic inflation showed signs of softening.

Benchmark indices Sensex and Nifty rose around 3.5 per cent this month, closing the gap to record highs seen on September 26 2024.

State-owned firms played a huge role in the recent rally driving the BSE PSU Index up by 7.5 per cent, even as the BSE 500 gained 5 per cent. BSE Auto rose by 9 per cent, BSE Bankex up 6.8 per cent, BSE Metal added 8.1 per cent and Oil & Gas went up 4.5 per cent.

Mid-cap and small-cap stocks also showed strong performance, with the BSE MidCap index rising 4.7 per cent and SmallCap edging up by 6 per cent.

Analysts said that the Indian stock market is unlikely to be impacted by the US Fed decision. They said that the ongoing rally in the market is driven by expectations of earnings revival of Indian corporates.

According to market watchers, there is a high likelihood of above 15 per cent growth in corporate earnings in FY27 due to GST reforms, leading to a turnaround in FPI sentiments.

However, others maintain that valuations remain high but earnings momentum is set to improve -- driven by banks, NBFCs, and the consumption sectors.

Meanwhile, the Nifty 50 held firmly above the 25,300 mark in the previous session, reinforcing psychological strength and signalling investor comfort at higher levels.

Analysts said that the index now shows potential upside momentum, with resistance expected around the 25,400-25,500 zone. The support remains intact at 25,000-24,900 zones.

- IANS