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Value buying, IT rally on strong Q2 earnings lift markets for second straight week
Oct-16-2026

Indian markets ended higher for second straight week on value buying led by IT and tech stocks after strong Q2 earnings. Sentiment improved as FM Nirmala Sitharaman signalled openness to discussing LTCG tax removal. SEBI’s revised derivatives settlement rules and rupee’s recovery, aided by RBI measures, further supported equities. Traders overlooked elevated inflation in India.

Some of the major developments during the week are:

Retail inflation surges to 5.54% in September: Retail inflation, measured by the All India Consumer Price Index (CPI) with the base year 2024, rose to 5.54% (Provisional) in September 2026 from 4.83% (Final) for August 2026, amid persistently high food prices.

Wholesale inflationary pressures intensify in India in September: India's wholesale price index (WPI) inflation rose significantly in the month of September 2026 to 11.39 per cent, as compared to 9.92 per cent in August 2026, due to a sharp rise in fuel and power, food and manufactured product prices. 

IMF revises upward India’s economic growth projection to 7.0% for FY27: The IMF, in its October World Economic Outlook (WEO), has revised upward India’s economic growth projection by 60 bps to 7.0% for the FY27 and by 30 bps to 7.0% for FY28, compared with its July 2026 WEO update.

India's merchandise exports jump in September: India’s merchandise exports rose by 23.05% Y-o-Y to $44.40 billion in September 2026, while imports grew by 8% Y-o-Y to $74.61 billion in September 2026. Trade deficit narrowed to $30.21 billion in September 2026 from $33 billion in September 2025.

Net direct tax collection grows 13% so far in FY27: The government data has shown the net direct tax collection has grown 13.21% to about Rs 13.38 lakh crore so far (as on October 14, 2026) this financial year (FY27), reaching about 50% of the full year budget target.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex jumped 2256.94 points or 3.11% to 74,729.27 during the week ended October 16, 2026. On the sectoral front, S&P BSE Information Technology was up by 2,989.50 points or 10.91% to 30,396.12, S&P BSE TECK was up by 1,311.74 points or 9.02% to 15,858.14 and S&P BSE Auto was up by 1,881.55 points or 3.41% to 57,027.47 were the top gainers, while S&P BSE Healthcare was down by 560.02 points or 1.15% to 48,267.99, and S&P BSE Fast Moving Consumer Goods was down by 46.35 points or 0.27% to 17,010.00 were the only losers on the BSE.

NSE movement for the week

The Nifty surged 625.70 points or 2.78% to 23,146.15. On the National Stock Exchange (NSE), Nifty IT was up by 3349.20 points or 11.72% to 31,924.10, Bank Nifty was up by 587.35 points or 1.06% to 55,844.00, Nifty Next 50 gained 821.90 points or 1.21% to 68,988.60 and Nifty Mid Cap 100 increased 342.45 points or 0.58% to 59,129.75.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net sellers in equity segment in the week, with gross purchases of Rs 70,408.27 crore and gross sales of Rs 78,342.96 crore, leading to a net outflow of Rs 7,934.69 crore. They also stood as net sellers in the debt segment with gross purchases of Rs 10,040.13 crore against gross sales of Rs 11,618.99 crore, resulting in a net outflow of Rs 1,578.86 crore. In hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 183.30 crore and gross sales of Rs 146.83 crore, leading to a net inflow of Rs 36.47 crore.

Industry and Economy

With an aim to strengthen market discipline and ensure appropriate risk management in the foreign exchange market, the Reserve Bank of India (RBI) has unveiled several regulatory measures, including restrictions on rebooking of cancelled foreign exchange derivative contracts, reduction in the threshold for undertaking foreign exchange derivative transactions without establishing underlying exposure, and introduction of Foreign Exchange Risk Reserve (FERR). As per regulatory measures, Authorised Dealers shall not permit users to rebook any foreign exchange derivative contract involving INR, whether deliverable or non-deliverable, which has been cancelled with any Authorised Dealer after the issuance of the Directions.

Outlook for the coming week

Indian equity markets ended the week with notable gains as traders opted to buy stocks from IT and Teck counters following their optimistic Q2 numbers. 

In the upcoming holiday shortened week, investors will be eyeing Infrastructure Output (core industries output) data to be out on October 21. Traders will be also watching for the HSBC Manufacturing, Services and Composite PMI Flash data on October 23. On the same day, Foreign Exchange Reserves data is going to be out. Meanwhile, US Secretary of State Marco Rubio is likely to visit India in the coming week.

Besides, stock-specific activity may dominate trade as earnings flows in. Bajaj Finance, UltraTech Cement, Hindustan Zinc, Eternal, Adani Green Energy, Indian Hotels Company, HPCL, Infosys, JSW Steel, Tata Motors, Kotak Mahindra Bank etc. would report their earnings in the coming week.

On the global front, investors would be eyeing economic data from United States (US) starting with NAHB Housing Market Index on October 19, followed by Redbook, Housing Starts on October 20, API Crude Oil Stock, EIA Crude Oil Stocks on October 21, Initial Jobless Claims on October 22, Fed Balance Sheet, S&P Global Composite PMI Flash and Baker Hughes Oil Rig Count on October 23.

Top Gainers 

  • Tech Mahindra up by 19.64% was the top gainer on Nifty for the week - Tech Mahindra’s better-than-expected Q2 numbers put investors in buying mood. The company has reported 32.74% rise in its consolidated net profit at Rs 1,585.60 crore for the quarter ended September 30, 2026 as compared to Rs 1,194.50 crore for the same quarter in the previous year. 
  • Tata Consultancy Services (TCS) up by 18.74% was another top gainer on Nifty for the week - TCS traded higher post its Q2 numbers. The company has reported 14.98% rise in its consolidated net profit at Rs 13,884 crore for the quarter ended September 30, 2026 as compared to Rs 12,075 crore for the same quarter in the previous year.

Top Losers 

  • Nestle India down by 4.06% was the top loser of the week on Nifty - Nestle India traded under pressure after it flagged concerns pertaining to rising food inflation and higher commodity prices, despite reporting stronger Q2 numbers. Investors fear that rising inflation may affect the company’s volumes and margins in the coming quarters.
  • Max Healthcare Institute down by 3.14% was another top loser of the week on Nifty - Max Healthcare Institute faced selling pressure, along with other healthcare stocks, amid concerns over rising scrutiny by the Supreme Court of India and tighter pricing regulations for the healthcare sector. Earlier, government approved a 30% cap on margins charged on the supply and sale of non-scheduled anti-cancer medicines.

Technical viewpoints

During the week, CNX Nifty touched the highest level of 23,149.85 on October 16 and lowest level of 22,288.45 on October 13. On the last trading day, the Nifty closed at 23,146.15 with weekly gain of 625.70 points or 2.78 percent. For the coming week, 22,573.12 followed by 22,000.08 are likely to be good support levels for the Nifty, while the index may face resistance at 23,434.52 and further at 23,722.88 levels.

US Market

The U.S. markets traded mostly in red during the week after the Labor Department said that consumer prices in U.S. climbed by 0.6 percent in September 2026 after rising by 0.4 percent in August.

Some of the major developments during the week are:  

U.S. business inventories increase in line with estimates in August: The Commerce Department said business inventories rose by 0.4 percent in August. Street had expected business inventories to rise by 0.4 percent.

Retail sales in U.S. climb more than expected in September: Retail sales climbed by 0.8 percent in September after surging by an upwardly revised 1.3 percent in August. Street had expected retail sales to rise by 0.3 percent.

U.S. producer prices jump in September: The Labor Department said its producer price index for final demand jumped by 1.3 in September after rising by an upwardly revised 0.5 percent in August.

Weekly jobless claims in U.S. inch up in week ended October 10: Initial jobless claims ticked up to 199,000, an increase of 1,000 from the previous week's revised level of 198,000.

Existing home sales in U.S. rebound in September: Existing home sales jumped by 1.5 percent to an annual rate of 3.99 million in September after plunging by 3.2 percent to a downwardly revised rate of 3.93 million in August.

European Market

European markets gave strong performance during the passing week, on the back of solid earnings and softening global bond yields.

Some of the major developments during the week are:

Eurozone industrial output drops for third month: Industrial output dropped 0.5 percent on a monthly basis in August, which was bigger than the 0.3 percent fall posted in July.

France inflation rises more than estimated: Consumer price inflation rose to 3.1 percent in September from 2.4 percent in August. The rate was also slightly above the initial estimate of 3.0 percent.

Germany wholesale price inflation highest since 2023: Wholesale price inflation rose to 8.7 percent in September from 6.8 percent in the prior month. 

Spain inflation confirmed at 4.9%: Consumer price inflation climbed to 4.9 percent in September, matching flash estimate, from 4.3 percent in August.

UK manufacturing output unexpectedly rises in August: Manufacturing production in the UK grew by 1.2 percent M-o-M in August 2026, beating market expectations for a 0.1 percent decline and rebounding from a revised 1.0 percent increase in July.

Asian Market

Asian markets traded mostly in red during week as hotter-than-expected US CPI data increased the risks of further interest rate hikes by the US Federal Reserve.

Some of the major developments during the week are:

Japan producer prices sink 0.3% in September: Producer prices in Japan were down a seasonally adjusted 0.3% on month in September. That was well shy of expectations for increase of 0.5%.

Japan’s industrial production drops in August: Japan’s industrial production dropped 2.4% month-over-month in August 2026, steeper than flash data of a 1.7% decline and July's 0.2% fall.

South Korea export price growth eases in September: South Korea’s export prices surged 40.9% year-over-year in September 2026, easing from a 42.4% increase in August.

Japan core machinery orders rise in August: Japan’s core machine orders rose by 5.2% month-on-month to JPY 1,069.8 billion in August 2026, reversing a 3.7% decline in the previous month and exceeding market forecasts for a 3% gain.

China’s inflation rises marginally in September: China’s annual inflation rate edged up to 0.9% in September 2026 from 0.8% in August, slightly below market expectations of 1%.
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