Dalal Street staged a decisive counter-offensive on Friday, recouping a substantial portion of Thursday’s brutal losses as strong quarterly numbers from IT bellwether Tata Consultancy Services (TCS) and a momentary de-escalation in Middle East strike fears revived risk appetite across sectors.
The 30-share BSE Sensex settled 879.09 points or 1.23% higher at 72,472.33 at 3:32 PM IST. After opening at 71,776.67 and touching a session low of 71,739.49, aggressive buying pushed the index to an intraday high of 72,669.20—up over 1,028 points at its zenith—rebounding firmly from Thursday’s 32-month low of 71,593.24.
The NSE Nifty 50 advanced 288.65 points or 1.30% to close at 22,520.45. The index opened at 22,314.95, touched an early low of 22,294.75, and rallied to an intraday high of 22,580.75, bouncing off Thursday’s 18-month low and fresh 52-week trough of 22,179.90.
Market breadth flipped into strongly bullish territory with an advance-to-decline ratio of 47:3 on the benchmark. Over ₹3 lakh crore was restored to investor wealth within the opening 90 minutes of trade, while the volatility index, India VIX, cooled 5% to settle around 14.3.
TCS Q2 Beat Powers Sectoral Surge Across Tech Pack
Information Technology spearheaded the broad-based recovery, with the Nifty IT index surging over 3% and BSE IT advancing 2.81%.
The momentum followed strong Q2 FY27 operational results from Tata Consultancy Services, which beat Street estimates on both top-line and bottom-line metrics:
- Profitability & Top-line: Consolidated net profit rose 4% QoQ and 15% YoY to ₹13,884 crore (vs. consensus of ₹13,788 crore). Revenue grew 1.3% QoQ to ₹73,188 crore (vs. ₹73,026 crore projected), marking an 11% YoY expansion, with constant currency growth at 0.5%.
- Operating Margins & Deal Wins: Operating EBIT stood at ₹17,553 crore with margins expanding to 24% (from 23.95% in Q1). Total Contract Value (TCV) held firm at $9.6 billion.
- AI Revenue Scaling: Annualized AI-led revenue crossed $3.1 billion, now constituting 10% of total company sales.
- Shareholder Return: The board approved an interim dividend of ₹12 per share, setting the record date for October 14.
Shares of TCS jumped as much as 5.4% intraday, lifting sector peers Infosys, HCL Tech, Tech Mahindra, and Wipro by 2% to 4%.
While global brokerages remained divided—Nomura (Buy, TP ₹2,630) and Goldman Sachs (Buy, TP ₹2,210) praised AI conversion against Citi (Sell, TP ₹1,840) and Jefferies (Underperform, TP ₹1,800) citing medium-term margin ceilings—investors brushed aside regulatory noise regarding the US Department of Labor temporarily suspending major Indian IT firms from the PERM labor certification pipeline, noting that domestic IT majors have already localized over 60% of their onshore workforce.
Gains extended into frontline heavyweights including ITC, Adani Ports, HDFC Bank, Power Grid, Bajaj Finserv, Tata Steel, Trent, SBI, Maruti Suzuki, and Kotak Mahindra Bank, each gaining between 1% and 3%.
DII vs FPI Tug-of-War: Domestic Funds Absorb Record Outflows
Despite Friday’s sharp relief rally, foreign portfolio institutional liquidation continues to hover over secondary markets:
- FPI Exodus: Foreign portfolio investors dumped a net ₹12,944 crore in cash equities on Thursday—the steepest single-day foreign outflow since May 29, marking their 10th consecutive session of net selling. Cumulative year-to-date FPI outflows have surpassed $30 billion, keeping the Indian rupee under pressure near 96.96 against the US dollar.
- Domestic Absorption: Domestic Institutional Investors (DIIs) stepped in aggressively, absorbing the shock with net purchases of ₹10,703 crore on Thursday.
- F&O Ban List: In the derivatives segment, Ambuja Cements, Bandhan Bank, LIC Housing Finance, and SAIL remained under the NSE F&O ban after crossing 95% of market-wide position limits.
Crude Pulls Back to $103 on Geopolitical Pause; Supply Risks Linger
International oil benchmarks eased from multi-month peaks after US President Donald Trump stated on Truth Social that Washington would not undertake military strikes against Iranian facilities prior to the November 3 midterm elections, citing ongoing indirect communications with Tehran.
- Price Action: Brent crude slipped 0.7% to $103.53 per barrel after touching $105.88 on Thursday, while WTI traded down 0.6% at $90.97.
- Chokepoint & Weather Disruptions: Despite the dip, regional energy transit remains on edge. The UKMTO recorded nine tanker attacks in the Strait of Hormuz during the first week of October, while Yemen’s Houthis launched missile strikes toward Riyadh and warned energy installations across the Kingdom. In the Gulf of Mexico, Hurricane Isaias forced the shutdown of 62.9% of offshore crude output (~1.3 million barrels per day).
- Sector Impact: Nifty Oil & Gas was the sole sectoral index to close in the red, with state-run refiners HPCL and BPCL registering muted gains of 0.5% after Thursday’s 5% drop.
Corporate Radar & Operational Updates
- JSW Steel: Reported total crude steel production growth of 5% YoY at 7.27 million tonnes (MT) for the quarter, with domestic Indian output rising 5% to 7.07 MT.
- IRB Infrastructure: Gross toll revenue collections climbed 24% YoY to ₹773 crore, highlighting resilient freight and highway commercial transit.
- P N Gadgil Jewellers: Logged Q2 revenue growth of 22.4% YoY, propelled by a 31.1% jump in retail sales and a 34.7% surge in franchise channels ahead of the festive season.
Technical Outlook: Testing the 22,600 Resistance Band
Technical desks noted that while Friday’s sharp advance halts immediate downside acceleration, the bounce remains a counter-trend relief rally within a broader corrective structure.
- Nifty 50 Levels: Immediate overhead resistance is clustered between 22,550 and the crucial 22,600–22,660 supply zone. On the downside, 22,400 serves as first-line support; a failure to hold this could retest the 22,200–22,180 floor.
- BSE Sensex Levels: Resistance is placed at 72,800–73,000, with support moving up to 72,000 and 71,700.
While the combination of TCS’s resilient earnings and the 57th GST Council’s structural compliance rollbacks provided timely domestic ballast, market participants caution that sustaining the bounce into next week will depend on Brent crude staying below $104 and foreign institutional dumping beginning to subside.
