Nifty gains as easing oil and Fed concerns lift risk appetite

Indian equities recovered as weaker-than-expected US employment data reduced concern about an imminent Federal Reserve rate increase, while a retreat in crude offered some relief on inflation risks. The move ended a run of losses, but it came against a backdrop of persistent foreign selling and an RBI policy decision due on Wednesday.

The reported close was positive, though gains narrowed from early trade. Reports attributed support to buying in heavyweight financial, consumer and energy shares, rather than to a single broad-based catalyst.

Reliance Industries, ICICI Bank and ITC were cited among the largest contributors to the Nifty’s advance. Market reports linked the session’s support to easing oil and improved global risk appetite; they did not identify a fresh company-specific announcement as the driver for those three stocks. Bharti Airtel and Bajaj Finance were also among the reported gainers.

Financial and NBFC shares found support in quarterly business updates. Bajaj Finance reported an 11% year-on-year rise in new loans booked in the September quarter, while HDFC Bank’s provisional update showed gross advances up 16.3% and deposits up 18.8% year-on-year. Reports also cited growth updates from other lenders. These disclosures helped explain demand for lenders and non-bank financial companies, though they do not establish the cause of every share move.

The sector readings showed strength in consumer durables and telecom, but the reporting reviewed did not establish a distinct catalyst for those groups. Metals also lagged without a specific trigger identified in the available coverage. In IT, weakness in HCL Technologies and Infosys offset the positive signal traders had initially taken from Accenture’s results and outlook. Pharma and healthcare lagged; one market report attributed this to their recent relative outperformance, rather than to a new sector-wide announcement.

The RBI’s Monetary Policy Committee began its three-day meeting on October 5 and is due to announce its decision on October 7. The repo rate is 5.25%. A 25-basis-point increase is the dominant expectation in reports citing economists, with inflation pressure from energy and food among the arguments for tightening. Views are not unanimous: Bank of Baroda expects the RBI to hold rates in October and consider increases later. The decision and the accompanying guidance are the immediate domestic policy test.

The RBI also absorbed Rs 2,10,192 crore through two overnight variable-rate reverse-repo auctions on October 5, according to BusinessLine, as it withdrew surplus banking-system liquidity. That operation matters alongside the rate decision because liquidity conditions affect short-term funding and money-market rates.

SEBI chairman Tuhin Kanta Pandey warned investors against relying on finfluencers, anonymous tips and exaggerated return claims. Finance Minister Nirmala Sitharaman said US trade-deal negotiations had reached a plateau, while also saying talks were continuing. That leaves uncertainty around the scope for further agreement; the reporting did not identify a specific market impact from the remarks.

No CPI, IIP, GST, trade or PMI release for October 5 or the October 6 pre-open was identified in the reporting reviewed.

US shares advanced on Monday, with technology megacaps supporting the Nasdaq to a record close, while Asian markets were broadly firmer in Tuesday trade. Softer US jobs data lowered market expectations of an October Fed increase, but the global rate backdrop remains restrictive: the US 10-year Treasury yield was still near multi-year highs.

Oil eased on Monday as higher Middle Eastern exports and plans by G7 countries to release emergency stocks helped temper immediate supply concerns. The move offered some relief to oil-importing India, but crude remained elevated and the rupee stayed under pressure. Those conditions keep imported inflation and foreign-investor flows in focus.

Foreign institutional investors were net sellers of Indian equities on October 5, offloading Rs 4,699 crore, while domestic institutions bought more than Rs 5,181 crore, according to provisional figures reported by Moneycontrol. Domestic buying offset the net foreign supply in that session, but persistent overseas outflows remain a constraint on confidence.

HDFC Bank’s leadership transition was clarified after the RBI approved Anup Bagchi’s appointment as managing director and chief executive for a three-year term beginning October 27. The lender’s provisional September-quarter update reported year-on-year growth in deposits and gross advances. Shares initially rose, then reversed and ended lower; BusinessLine described the later move as profit-taking. The session suggests the succession news did not by itself remove near-term selling pressure. No consensus comparison for the business update was available in the reporting reviewed.

Larsen & Toubro said its Power Transmission & Distribution business had secured multiple engineering, procurement and construction orders in India and overseas. The company classified the orders as “mega”, a category valued at up to Rs 15,000 crore. No consensus expectation or more precise order value was provided in the report.

Trent’s standalone second-quarter revenue was reported at Rs 5,788 crore, up 23% year-on-year. Kotak Mahindra Bank reported second-quarter net advances up 24.7% and deposits up 23.2% year-on-year. These are business updates, not comparisons with analyst forecasts; the reporting reviewed did not provide consensus estimates for either.

The next major domestic event is the RBI’s policy decision on Wednesday, October 7. Traders will also assess whether the easing in crude and the improved global risk tone persist, and whether quarterly business updates continue to support financial-sector shares.