The Sensex and Nifty 50 indices jumped 3% in the week ending October 16, 2026, led by a strong rally in IT stocks. Investors focused on healthy corporate earnings and supportive measures from the Reserve Bank of India (RBI), which helped maintain positive market sentiment despite concerns over rising crude oil prices.
- Sensex and Nifty 50 gained 3% for the week.
- Nifty IT sector surged 11.7%, the biggest weekly winner.
- RBI introduced measures to support the rupee.
- Brent crude oil prices rose to $110 per barrel but did not deter gains.
- Broader markets showed mixed performance with midcaps up 0.6% and smallcaps down 0.1%.
Why did IT stocks rally strongly this week?
The IT sector led the market rally with an 11.7% gain, driven by robust earnings in the second quarter. Investors responded positively to strong revenue growth, especially from artificial intelligence (AI) operations. Infosys CEO Salil Parekh highlighted that AI services contributed over 8% of the company’s revenue in Q2 and are growing at a double-digit rate sequentially, boosting confidence in the sector.
What factors supported the overall market rise?
Besides the IT sector’s performance, the market benefited from several factors. The RBI announced three key measures to support the rupee: a dedicated window for public sector oil marketing companies to buy US dollars directly from the central bank, an open-market sale of ₹25,000 crore in government securities, and a requirement for banks to maintain 99% of the prescribed cash reserve ratio daily starting October 16, 2026. Additionally, the delay in implementing UPI Merchant Discount Rate (MDR) fees helped maintain positive investor sentiment.
How did crude oil prices affect the market?
Crude oil prices remained elevated, with Brent crude rising from $104.95 to $110 per barrel during the week. Although higher oil prices typically pose a risk to markets, this increase did not prevent the Sensex and Nifty from closing higher. Investors appeared to focus more on positive earnings and RBI support than on the crude oil price rise.
What was the performance of broader markets and other sectors?
Broader markets showed mixed results. The Nifty Midcap 100 index closed 0.6% higher, while the Nifty Smallcap 100 slipped marginally by 0.1%. Among sectors, besides IT, Nifty Media and Nifty Auto gained 6.1% and 3.7%, respectively. Nifty Realty and Nifty India Defence also posted gains of 2.7% and 2.3%. Conversely, Nifty Pharma, Nifty FMCG, and Nifty PSU Bank were the only sectors to decline, falling by 0.7%, 0.6%, and 0.4%, respectively. The India VIX index, which measures market volatility, decreased by 2.2% during the week.
How did individual companies perform?
Shares of Waaree Energies saw sharp gains after its subsidiary, Waaree Power Private Limited, began commercial production on a new solar inverter manufacturing line with an annual capacity of 1.10 GW in Valsad, Gujarat. This development attracted investor interest in the renewable energy sector.
On the other hand, RBL Bank shares declined following its July to September quarter earnings, which fell short of expectations. The bank faced elevated credit costs, a fundraising impact, and muted earnings per share growth. Specifically, RBL Bank’s credit cost rose 53% year-on-year to ₹771 crore from ₹503 crore previously, contributing to the negative market reaction.
