The Indian stock market delivered a sharp rebound on October 8, with the Nifty breaking through the 25,000 mark and the Sensex rising sharply. This rally comes on the back of broad-based buying across various sectors, apart from metals, and increased optimism ahead of the Reserve Bank of India’s (RBI) monetary policy review scheduled for tomorrow. The rally also signals a strong recovery after six consecutive days of losses, providing a breather to investors rattled by ongoing geopolitical concerns and fluctuations in foreign institutional investor (FII) activity.

The Nifty 50 surged by 0.88% or 217.40 points to close at 25,013.20, while the Sensex added 584.81 points to settle at 81,634.81. The rebound was driven by gains in key sectors such as auto, banking, healthcare, realty, capital goods, power, and telecom, all of which posted gains between 1-2%. However, metals remained the sole underperformer, weighed down by weak global demand concerns.

Among the top Nifty gainers were Trent, Adani Enterprises, Adani Ports, Bharat Electronics, and Mahindra & Mahindra (M&M), while stocks like Tata Steel, JSW Steel, Bajaj Finserv, and SBI Life Insurance saw marginal declines.

Midcap and Smallcap Stocks Shine

While the major indices posted decent gains, the real excitement was in the midcap and smallcap stocks. The Nifty Midcap100 and Nifty Smallcap100 surged by over 2% each, driven by renewed investor interest in these segments after the recent correction. Value buying dominated as investors looked to capitalize on beaten-down prices, particularly in high-growth segments like realty and telecom.

In the Nifty Midcap100, stocks like BSE, HUDCO, RVNL, Dixon Technologies, IREDA, and Balkrishna Industries were among the top performers, with gains ranging between 5-11%. Similarly, in the Nifty Smallcap100, stocks like Triveni Turbine, GRSE, and HFCL surged by over 8-10%, reflecting strong optimism around these companies' growth prospects.

However, it wasn’t all green across the board. NMDC, Poonawalla Fincorp, Phoenix Mills, and Policy Bazaar saw moderate declines in the midcap space, while Brigade Enterprises and NALCO ended in the red within the smallcap category, losing between 1-3%.

Global Market Influences

Global markets presented a mixed picture, as the Middle East conflict and fluctuating oil prices continued to weigh on investor sentiment. Asian markets were largely subdued, except for China, where stocks rallied on the back of stimulus measures introduced by Beijing. Chinese equities performed well after reopening post the Golden Week holiday, which injected some optimism into regional markets.

Meanwhile, Wall Street saw a dip, with major US indices losing around 1% in the previous session. The rise in oil prices and an uptick in Treasury yields contributed to the risk-off sentiment. Investors in the US are also awaiting the Federal Reserve’s September meeting minutes, due to be released tomorrow, as well as the much-anticipated Consumer Price Index (CPI) data, which will be out on October 10.

In Europe, markets remained cautious as fears of rising inflation and higher interest rates dominated. The ongoing situation in the Middle East and the spike in oil prices further added to concerns, with some sectors like travel and energy seeing divergent performance.

Domestic Factors: RBI Policy and Earnings Season

In India, the focus now shifts to the RBI policy announcement, where market participants are hoping for a dovish stance, possibly with a rate cut. While inflation continues to be a key concern, particularly with the recent surge in global oil prices, there is also a need to stimulate growth. Analysts expect the RBI to keep a balanced tone, especially as the economy navigates through global uncertainties.

Apart from the policy review, the domestic market is also gearing up for the Q2FY25 earnings season, which will kick off in the coming days. Investors are eagerly awaiting the performance results of key sectors like banking, auto, and FMCG, which could provide further direction for the market.

Sectoral Highlights

In the banking sector, stocks like HDFC Bank, ICICI Bank, and Kotak Mahindra Bank performed well, boosted by optimism ahead of the RBI policy decision. HDFC Bank also announced the sale of its 100% stake in HDFC Education and Development Services for Rs 192 crore, a move that was well-received by the market.

Today’s stock market showcased a wave of positive momentum across a diverse range of sectors, fueled by earnings announcements, strategic moves, and mutual fund shareholding increases. Among the stocks making headlines was Transformers & Rectifiers (India), which surged by 13.9 times in its second-quarter profit for FY25 to ₹42.1 crore, hitting its 5% upper circuit. The company's sharp jump in earnings was attributed to successful inventory destocking, while its revenue grew by 78.6% YoY to ₹457.7 crore. The stock has been identified in a screener where mutual funds raised their stake in the last quarter, signaling strong institutional confidence.

Another prominent name in the news was Vedanta, which saw a notable upgrade by ICICI Securities to a 'Buy' rating, with a higher target price of ₹600 per share. This revision points to a 21.5% potential upside. Analysts believe that Vedanta’s planned demerger will allow its individual entities to capitalize on growth opportunities, with investors gaining exposure to pure-play businesses. Over FY25-26, Vedanta’s revenue is expected to grow at a compound annual growth rate (CAGR) of 5.1%, setting the stage for improved performance in the coming years.

Adding to the positive sentiment, HDFC Bank announced the sale of its entire 100% stake in HDFC Education and Development Services (HDFC Edu) to Vama Sundari Investments for ₹192 crore. This move reflects the bank's strategic decision to focus on its core operations and streamline its portfolio.

In the automotive space, Mahindra & Mahindra (M&M) received a boost from CLSA, which upgraded the stock to 'Overweight', with a revised target price of ₹3,400. The brokerage cited M&M’s profitable growth in the SUV segment and rising return on equity (ROE) as key drivers behind this re-rating. M&M's strong fundamentals in the SUV space, along with its focus on electric vehicles (EVs), are expected to support long-term growth.

Among media stocks, Saregama India, Dish TV, Nazara Technologies, and Tips Music rose by over 4.5% in today's trade. All constituents of the Nifty Media index traded in the green, underscoring the sector's resilience and renewed interest among investors.

Meanwhile, Zodiac Energy surged to its 5% upper circuit after securing a ₹154.3 crore order from the Ahmedabad Municipal Corporation. The contract includes designing, supplying, and installing a 30 MW ground-mounted solar facility in Gujarat, followed by five years of operation and maintenance. This order reaffirms Zodiac’s leadership in renewable energy and solidifies its position as a key player in India’s solar power initiatives.

Another standout was Allied Digital Services, which gained traction by bagging the Pune Safe City project, a six-year contract worth over ₹430 crore. Collaborating with Pune Police and the Government of Maharashtra, the company will implement a comprehensive security solution to enhance safety across the city. The deal is expected to provide long-term revenue visibility for Allied Digital and bolster its standing in the tech-enabled security services space.

In the beverages sector, Varun Beverages surged by more than 8% ahead of its board meeting scheduled to consider a proposal to raise funds via a qualified institutional placement (QIP). The company’s stock performance today reflects investor optimism surrounding its expansion plans and its positioning as a key player in the soft drinks market.

Construction stocks also saw movement, with PSP Projects rising sharply after securing a ₹249 crore order to build a high-rise residential tower at GIFT City in Gandhinagar, Gujarat. The project, slated for completion in 31 months, will contribute to the company's growing order book and strengthen its presence in the urban infrastructure space.

As for SpiceJet, the airline announced its plan to add ten new aircraft to its fleet by November 2024. Seven of these planes will be leased, while three will come from its grounded fleet. With agreements for the leased aircraft finalized, the company aims for complete induction by November 15, positioning itself for growth in the competitive aviation industry.

Mining company MOIL saw a modest rise as its September production grew by 8.1% YoY to 1.5 lakh tonnes, while its sales edged up by 2% YoY to 1.6 lakh tonnes. The company’s consistent performance continues to reflect strong fundamentals, making it a steady performer in the metals sector.

In a significant development, National Securities Depository received approval from SEBI to launch its much-anticipated initial public offering (IPO). The IPO will consist of an offer for the sale of up to 5.7 crore shares, with major shareholders like IDBI Bank, NSE, SBI, HDFC Bank, and Union Bank of India paring their stakes.

Other stocks such as Jyoti Structures also saw a sharp rise after renowned investor Ashish Kacholia acquired a 2.5% stake, amounting to 2.2 crore shares, for ₹63.9 crore through a bulk deal, further fueling market excitement.

In addition to individual stock movements, the broader Indian equity indices ended their six-day losing streak, with the Nifty 50 closing above 25,000. This was driven by broad-based buying across sectors, barring metals, and anticipation ahead of the RBI’s monetary policy decision tomorrow.

The Indian stock market's performance today was a welcome respite after six consecutive sessions of losses, largely driven by foreign institutional investor (FII) selling and concerns surrounding the ongoing conflict in the Middle East. Broader markets outperformed the benchmark indices, with midcap and smallcap indices rising by over 2%, supported by value buying and expectations of a possible rate cut by the RBI.

Stocks like Trent, Adani Enterprises, Bharat Electronics, and Mahindra & Mahindra were among the top gainers in today’s trade, while Tata Steel, SBI Life Insurance, and JSW Steel were the major laggards.

Investors should stay attuned to the upcoming RBI policy outcome and ongoing earnings announcements, which will shape the market’s direction in the near term. For the latest updates on IPOs, stock market news, and investment insights, visit Best IPOs and Top News Headlines. Stay updated with expert trading strategies by joining the Trading with CA Abhay Telegram Channel and the Finance Saathi Telegram Channel.