Market Wrap

Indian Shares Extend Gains as Banks Lead Rally Ahead of RBI Policy

An end-of-day recap of all that transpired in the Indian markets, highlighting the major price movements and the factors driving them

iStock.com

By Dehuti Jani

October 6, 2026 at 12:59 PM IST

Benchmark equity indices extended gains on Tuesday led by banks, pharma and fashion retailer Trent, as strong global cues lifted sentiment, and ahead of the Reserve Bank of India's monetary policy decision on Wednesday.

The Nifty50 rose 0.98% to 22,776.10, while the Sensex gained 0.95% to 73,067.81. Both indices have now risen for two consecutive sessions, ending an eight-week losing streak last week, the longest in 25 years.

Fourteen of the 16 major sectoral indices ended higher, while the Nifty MidCap and Nifty SmallCap indices rose 1.08% and 1.56%, respectively. The advance-decline ratio stood at around 2:1, reflecting a broad-based recovery. Nifty Pharma and Nifty Chemical were the top-performing sectors, while Nifty IT was the biggest laggard. Private banks and oil and gas stocks also supported the benchmark indices.

The Indian rupee fell 0.1% to 96.42 per US dollar, its weakest level in more than two months, weighed by outflows from local equities. Dollar sales by state-run banks, likely on behalf of the RBI, helped limit the decline.

Indian government bonds reversed their earlier losses as overseas pressures eased, although traders remained cautious ahead of the RBI’s policy decision on Wednesday. The benchmark 6.94%, 2036 bond yield ended at 7.1928%, down from Monday's close of 7.2108%, after touching an intraday high of 7.2254%.

Top Movers of the Day

Trent surged 12.40% to ₹2,900, emerging as the top Nifty 50 gainer of the day, driven by strong standalone revenue that rose to ₹57.88 billion beating estimates. The stock saw strong buying interest, with sentiment improving towards the retail sector.

Honasa Consumer jumped 7.81% to ₹476.65 after the company reported strong operating performance for the September quarter, pointing to continued growth momentum.

Kalpataru Projects International advanced 5.53% to ₹1,455, supported by strong buying interest in the infrastructure and capital goods space and upbeat technical buying near its 52-week high range.

Kotak Mahindra Bank rose 3.59% to ₹430.95, leading gains among private-sector lenders as financial stocks recovered. The stock rose as July-September quarter net advances jumped 25% year-on-year, and Goldman Sachs raised the bank’s target price to ₹540.

Jio Financial Services gained 2.45% to ₹217.20, driven by positive momentum on its recent joint venture investment with Allianz Europe in their general insurance unit.

BSE climbed 3.82% to ₹3,301, supported by continued strength in the exchange operator amid elevated market activity. The stock was primarily driven by reports that indicate SEBI may pause using the Closing Auction Session (CAS) for derivatives settlement prices for at least a year, easing market volatility concerns.

HDFC Life Insurance rose 2.13% to ₹542.30, gaining alongside other financial stocks. The stock climbed past its key 20-day Simple Moving Average, triggering momentum buying.

Dabur India gained 2.48% to ₹388.05 after the FMCG major projected double-digit growth for the July-September quarter, supporting investor sentiment.

Tech Mahindra declined 2.38% to ₹1,499.40, leading losses among IT stocks as cautious views on sector growth and valuations weighed on the counter amid rising macro volatility and geopolitical concerns.

Coal India fell 3.27% to ₹411.20, underperforming the broader market recovery and remaining under selling pressure. The shares fell on concerns over surging input costs, and margin pressure.

Max Healthcare Institute dropped 1.54% to ₹902.90 amid profit booking and stock-specific selling in the healthcare sector.

Futures & Options
The Nifty October 2026 futures closed at 22,799.10, a premium of 23 points over the Nifty 50's cash-market close of 22,776.10. The Nifty 50 rose 220.35 points, or 0.98%, during the session, while the NSE's India VIX, a gauge of expected near-term volatility, fell 8.03% to 13.59.

HDFC Bank, Reliance Industries and Trent were the most-traded individual stock futures contracts in the NSE's F&O segment. The October 2026 F&O contracts will expire on 27 October 2026.

Bonds
Indian government bond yields fell on Tuesday as easing overseas pressures prompted traders to cover some short positions, although caution ahead of the Reserve Bank of India's monetary policy decision on Wednesday limited buying interest.

The benchmark 6.94%, 2036 bond yield ended at 7.1928%, easing from an intraday high of 7.2254% and compared with Monday's close of 7.2108%. Brent crude eased to $98.48 a barrel, while the 10-year US Treasury yield fell to 5.27%, supporting a recovery in bond prices.

At the 251-billion-rupee state bond auction, insurers and pension funds showed firm demand for longer-tenure state bonds, while banks remained cautious ahead of greater clarity on interest rates. Delhi rejected all bids for the re-issues of its 7.31%, 2033 and 7.75%, 2041 bonds, while Punjab rejected all bids for the re-issue of its 7.54%, 2031 bond.

Forex
The Indian rupee fell to its weakest level in more than two months on Tuesday, weighed by outflows from local equities as traders turned their focus to the Reserve Bank of India's monetary policy decision on Wednesday, with a rate hike widely anticipated.

The rupee ended at 96.42 per US dollar, down 0.1% from the previous close. Dollar sales by state-run banks, likely on behalf of the RBI, helped limit the decline. Traders also said the central bank likely conducted dollar-rupee sell/buy swaps to absorb excess rupee liquidity. The RBI has been using FX swaps, open-market bond sales and reverse repo transactions to drain surplus liquidity ahead of Wednesday's policy decision.

Crypto
The cryptocurrency market entered a phase of downward consolidation on Tuesday as a stronger US dollar weighed on risk assets. The dollar index recently touched an 18-month high amid concerns over the eurozone's economic outlook, while $89.9 million in net outflows from US spot Bitcoin ETFs pointed to cooling capital inflows.

Bitcoin failed to break the $87,000 resistance level on multiple attempts before slipping to around $85,500. Ethereum remained range-bound near $2,690, with the lack of immediate network catalysts limiting momentum.

US Stock Futures
US stock futures rose Tuesday, extending gains from the previous session after the Nasdaq Composite reached a fresh record high. S&P 500 futures gained 0.25%, Dow Jones Industrial Average futures rose 0.48%, while Nasdaq-100 futures added 0.26%.

Investor optimism around upcoming earnings and the artificial intelligence boom continued to support equities despite the global bond sell-off and elevated diesel costs. Nvidia and other technology stocks helped drive the previous session's gains, while the S&P 500 remained less than 1% below its record high.

US Treasury Notes
US Treasury note yields held near multidecade highs on Tuesday after a relentless global bond sell-off pushed borrowing costs to their highest levels since 2002. The benchmark 10-year Treasury yield hovered around 5.277%, supported by concerns over rising global fiscal deficits, an energy shock linked to regional conflicts, and persistent inflation pressures, with ISM services input prices rising to a four-year high.

The 30-year Treasury yield held around 5.633% after briefly touching 5.70% overnight. Yields remained elevated despite markets cutting expectations of an immediate rate hike by the Federal Reserve this month to around 23%, highlighting continued pressure from broader fiscal and inflation concerns on longer-dated US government debt.

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Indian Shares Extend Gains as Banks Lead Rally Ahead of RBI Policy