Stock Market Today: Nifty, Sensex rebound over 1%

India’s equity benchmarks snapped back on Friday, with Nifty 50 and Sensex climbing over 1% in a relief rally after the previous session’s sharp selloff pushed indices to fresh multi-month and 52-week lows in parts of the day. The recovery was led by IT, where upbeat reactions to TCS’ Q2 results helped lift sentiment, and supported by buying in select banks and defensives.

The move did not erase the bigger overhangs that triggered Thursday’s drawdown - higher-for-longer rates, elevated crude, and persistent foreign selling pressure - but it did show investors were willing to add risk when the most beaten-down pockets offered attractive entry points.

A rebound after a hard reset

Thursday’s trade was about macro stress. Equity risk premium compressed as bond yields surged, crude jumped, and investors repriced India for tighter financial conditions after the RBI’s recent hawkish shift. Friday was about positioning. With volatility spiking a day earlier and several stocks entering oversold territory, traders leaned into a technical rebound.

Early gains built through the session as heavyweight IT names outperformed, helping the benchmarks stabilise even as broader participation stayed mixed. Midcaps and smallcaps, which had fallen more sharply during the selloff, recovered partially but did not show the same uniform strength seen in frontline stocks.

The day’s key driver: IT takes charge

The clearest leadership came from IT, with Nifty IT outperforming after TCS’ quarterly print set a firmer tone for the earnings season. Investors also tracked US developments that could affect hiring and compliance for large outsourcing firms, including reports around the US PERM programme.

Even so, price action suggested the market chose to focus on near-term earnings visibility rather than extrapolate worst-case regulatory scenarios. For index watchers, this mattered because IT’s weight is large enough to turn the tape quickly, especially after a stretched selloff.

Global cues: oil stays hot, tech stays fragile

Global risk appetite remained uneven. Asian equities were softer in parts, tracking a tech-led pullback on Wall Street after US indices slipped from record highs. The Nasdaq’s sharp one-day drop reinforced the idea that global equities remain sensitive to valuation and rate assumptions.

The bigger global macro input for India, however, continued to be crude oil. Brent hovered above $103-104 per barrel amid renewed Middle East supply-risk concerns, keeping the inflation narrative alive. Elevated energy prices complicate central bank messaging, particularly when growth is still holding up and policymakers fear second-round inflation effects.

Bonds and the dollar: easing yields offer brief relief

US Treasury yields, which have been flirting with multi-decade highs, eased modestly after strong auction demand, giving equities some breathing room. But the broader point remains: high global yields raise the hurdle rate for risk assets, tighten financial conditions, and can accelerate capital rotation back into bonds.

For Indian equities, that channel matters because it interacts with FII flows. When US yields move up and the dollar stays firm, EM risk appetite tends to weaken and India’s valuation premium becomes harder to defend, particularly in rate-sensitive sectors.

What moved in India: banks steady, defensives help

Alongside IT, buying emerged in parts of banking, financial services and FMCG, helping the rebound look more balanced than a single-sector spike. That said, leadership still appeared selective rather than broad-based.

On the lagging side, metal and pharma were under pressure in parts of the day, reflecting the combination of global growth worries and currency sensitivities. After Thursday’s rout, investors also stayed cautious in high-beta segments that are most exposed to funding costs and risk appetite.

Must-know corporate developments

While index moves were driven by macro and heavyweight earnings setup, a few company disclosures stood out for their direct balance-sheet and order-flow implications.

MTNL default disclosure: Mahanagar Telephone Nigam Ltd disclosed defaults in payment of principal and interest to multiple banks as of 30 September 2026, under SEBI LODR compliance. For investors, this keeps MTNL firmly in the high-risk zone where outcomes are driven by restructuring timelines and government support expectations rather than operating performance.

SEPC’s large industrial order: SEPC Ltd announced it has signed a ₹854.57 crore contract with SAIL-IISCO for the Pellet Plant BOP at Burnpur, with an effective date of 3 September 2026 and a 32-month execution timeline. The company also said its consolidated order book has crossed ₹10,000 crore, a datapoint investors will track for revenue conversion and working capital discipline.

PC Jeweller’s NOCs from lenders: PC Jeweller informed exchanges that consortium banks have released all mortgaged assets, charges, securities and guarantees after issuing NOC letters, and that outstanding debt clearance formalities have been closed. For the market, this reduces encumbrance risk and improves financial flexibility, though sustained operating performance remains key.

What this means for investors

Friday’s rally helps sentiment, but it does not automatically signal a trend reversal. The market is still negotiating three powerful variables:

First, crude oil. With Brent above $100, India’s macro comfort zone narrows quickly, affecting inflation, the current account, and policy expectations.

Second, rates and yields. The RBI’s calibrated tightening posture and the global bond selloff mean equity valuations may continue to face scrutiny.

Third, foreign flows. If FIIs keep selling into rallies, rebounds can turn into short-lived relief moves rather than durable uptrends.

For portfolio strategy, investors are likely to keep a barbell approach: quality defensives and cash-flow names on one side, and selective cyclicals only where balance sheets can absorb higher funding costs.

Triggers to watch next week

Global markets head into a catalyst-heavy window. Investors will track:

• US inflation data and the market-implied path for Fed policy
• Bond market stability after recent spikes in long-end yields
• Crude headlines tied to Middle East tensions and shipping risks
• Early reads from India’s earnings season, with IT commentary on demand and pricing especially important

In India, the focus stays on whether the rebound can broaden beyond IT and whether domestic institutions can offset any renewed foreign selling.

The near-term market setup

After reclaiming some lost ground, Nifty today is back in a zone where follow-through matters more than the bounce itself. If crude remains elevated and global yields resume their climb, the market may struggle to build on Friday’s gains. If oil cools and yields stabilise, investors could see a more durable base-building phase, led by earnings clarity and selective bottom-up opportunities.