India markets | Week of 12 October 2026
The one-page story
Dalal Street spent the past fortnight absorbing three shocks at once: the RBI’s first rate hike since February 2023, the heaviest foreign selling in months, and crude still sitting above $100. Then, on Thursday 15 October, the Nifty jumped 1.6% to 22,997.35 and the Sensex added 1,533 points to 74,315.61. Both moves can be explained, and the gap between them is the story.
The hike. On 7 October the MPC raised the repo rate 25 bps to 5.50% and moved its stance from neutral to “calibrated tightening”. The vote on the rate was unanimous. Two members would have preferred to keep the stance neutral. The reasoning was plain: CPI inflation rose to 4.8% in August from 4.5% in July, core pressures are broadening, and the monsoon was deficient. The projection tells the rest: FY27 CPI of 5.2%, with Q3 at 6.0%. The committee said rate cuts are off the table in the near term.
The selling. In the week of 5–9 October, foreign institutions sold about ₹30,294 crore of Indian equities. The single worst session was Thursday 8 October at ₹12,944 crore. Domestic institutions bought about ₹30,313 crore, in all five sessions. Net, the two sides cancelled almost to the rupee. That is why the Nifty ended that week at 22,520, up 0.44%, despite the headlines.
The bounce. The 15 October rally came as crude fell about 2%, IT and private banks led, and the rupee steadied. It also came with a warning label: midcaps (-0.36%) and smallcaps (-1.31%) did not join in. A rally led by large private banks and IT is a narrow one.
What to watch next week.
- RBI’s MPC minutes on 21 October, for how divided the committee was on the stance.
- Q2 FY27 earnings from the large banks and IT names. The Nifty is above its 20-day average but still below its 50- and 200-day averages, so results need to carry the index through 23,000–23,200.
- Foreign flows. A bounce on domestic buying alone has a ceiling.
- The Jio IPO, now with a date set, which could pull liquidity from listed stocks.
The takeaway. Domestic investors are absorbing foreign selling almost rupee for rupee, which keeps the index afloat. But with the policy rate rising, CPI forecast near 6% by year-end and the rupee around ₹96.7, the market needs actual earnings upgrades, not just relief on crude, to break above 23,200.
Key data points
| Item | Figure |
|---|---|
| Repo rate (7 Oct) | 5.50% (+25 bps), first hike since Feb 2023 |
| Policy stance | Calibrated tightening (from neutral) |
| CPI, Aug 2026 | 4.8% (July: 4.5%) |
| FY27 CPI / GDP forecast | 5.2% / 7.1% |
| Q3 FY27 CPI forecast | 6.0% |
| FII net selling, 5–9 Oct | ≈ ₹30,294 crore |
| DII net buying, 5–9 Oct | ≈ ₹30,313 crore |
| Worst FII day | 8 Oct, ₹12,944 crore |
| Nifty, 9 Oct close | 22,520.45 |
| Nifty, 15 Oct close | 22,997.35 (+1.6%) |
| Sensex, 15 Oct close | 74,315.61 (+2.11%) |
| Midcap 100 / Smallcap 100, 15 Oct | -0.36% / -1.31% |
| India VIX (9 Oct) | 14.375 |
| Rupee (9 Oct) | ≈ ₹96.73 per USD |
| Brent (9 Oct) | ≈ $105.63 |
| TCS Q2 FY27 | Net profit +15% YoY to ₹13,884 crore, revenue +11.2% |
| Nifty levels to watch | Support 22,800; resistance 23,200 |
| Next MPC | 2–4 December 2026 |
Sources: SCC Online, Liquide weekly review, Business Standard, Deccan Chronicle. Figures as reported; flow numbers are provisional. Not investment advice.
Educational purposes only, not investment advice.
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