The Indian stock market made a strong comeback after the Diwali break, posting blockbuster gains in early trade today, October 23. The Sensex is trading up nearly 800 points or up 0.89%, while the Nifty climbed over 200 points or 0.8%, trading above 26,000 .
The Nifty Bank index also joined the rally, trading 0.76% higher in early hours.
Let’s take a look at the key reasons behind today’s market surge in today’s trading session-
Optimism over India-US trade talks
Markets are showing early signs of optimism following reports that India and the US may soon finalise a trade agreement. The talks reportedly involve concessions from both sides, with the US potentially reducing tariffs on Indian exports from 50% to around 15–16%.
Strong festival sales and FII buying
Corporate earnings expectations are getting a boost from record sales during the recent festive period.
As per Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, “Unprecedented record sales during the last few days has the potential to improve corporate earnings. FIIs turning buyers recently and short covering are factors that can fuel the rally. Clearly, it is advantage bulls! Short-covering has the potential to spike up large caps where there are big short positions. Textile stocks, which bore the brunt of the penal tariffs, are likely to witness big buying.”
FIIs have seen some buying in October and for the first time in 3 months, FIIs are net buyers in equity for Octoer so far.
IT stocks leading the charge
At this hour, IT stocks are at the forefront of today’s rally. Infosys is up over 3% after announcing its largest-ever Rs 18,000 crore share buyback, with promoters including N.R. Narayana Murthy, Nandan Nilekani, and Sudha Murty opting not to participate.
Other major IT names such as HCL Tech (up 3%) and Tech Mahindra are also performing strongly.
Banking stocks, including Axis Bank and Kotak Mahindra Bank, are contributing to the positive momentum in the market.
All sectors in green
Sectoral indices show a broad-based rally across the market. The Nifty IT index is up more than 2%, FMCG stocks are higher by 1%, while auto, metals, and media sectors are up over 0.5%.
Stabilising gold and silver prices
After sharp corrections in the previous two sessions following the huge rally, gold and silver prices have stabilised around $4,050/oz and $48 per ounce, respectively.
“The pullback reflected a shift toward risk assets amid optimism over US–India trade relations, weakening gold’s safe-haven demand. Seasonal demand in India also eased, putting pressure on physical markets,” said Rahul Kalantri, VP Commodities, Mehta Equities.