Indian stocks rally as IT rebound, stronger rupee lift sentiment

Indian stocks rallied on Tuesday, 13 October, with the Nifty 50 gaining 1.6% as better-than-expected results from HCLTech triggered the strongest rally in technology shares in more than 17 months.

The Nifty 50 climbed 358.60 points to close at 22,721.95, while the Sensex jumped 1,109.10 points, or 1.54%, to 73,033.78. The gains more than reversed Monday’s decline, when concerns over rising inflation, oil prices and foreign investor selling had pulled both benchmarks about 0.7% lower.

Technology stocks drove much of Tuesday’s advance. The Nifty IT index surged 5.2%, its best session in more than 17 months, after HCLTech reported stronger profitability and record quarterly deal bookings. HCLTech rose about 8%, its biggest one-day gain in more than six years.

HCLTech reported September-quarter revenue of ₹35,620 crore, up 11.5% from a year earlier, while net income rose 21.2% to ₹5,132 crore.

Operating margin widened to 18.2% from the previous quarter, while new deal bookings reached $3.26 billion. Advanced AI revenue increased 28.4% from the previous quarter to $219 million. The company maintained its full-year revenue growth forecast of 2.5% to 4% in constant currency.

The results helped revive buying across an IT sector that has been among the market’s biggest laggards this year.

Tata Consultancy Services rose about 6.8%, Tech Mahindra gained 4.6% and Infosys added about 4%. HCLTech was the biggest gainer on the Nifty 50.

The Nifty IT index remains down more than 20% in 2026 despite Tuesday’s surge, after investors cut exposure to Indian software exporters amid uncertainty over global technology spending and the impact of artificial intelligence on traditional outsourcing work.

Buying extended beyond technology as the session progressed.

The Nifty Midcap 100 rose about 1.1%, while the Nifty Smallcap 100 gained around 0.1%. Financial services, autos and consumer stocks also advanced, leaving most sector indexes higher.

Shriram Finance climbed more than 6% after Bloomberg reported that Japan’s Mitsubishi UFJ Financial Group was studying ways to eventually take majority control of the non-bank lender.

MUFG already owns 20% of Shriram Finance after completing a $4.4 billion investment in April. A move to majority ownership could require more than $10 billion in additional investment, according to the report. MUFG and Shriram declined to comment.

Hindustan Unilever gained about 3%, Bajaj Auto rose roughly 3% and Bajaj Finance added about 2.5%.

Kotak Mahindra Bank was the biggest Nifty 50 loser, falling about 1%. Eternal, Maruti Suzuki and Max Healthcare also ended lower.

Tuesday’s rally came despite a more difficult inflation backdrop.

Government data released on Monday showed retail inflation accelerated to 5.54% in September from 4.82% in August, moving closer to the upper end of the Reserve Bank of India’s (RBI’s) 2% to 6% tolerance band.

Food inflation rose to 7.74%, adding to expectations that the RBI may have to raise interest rates again after increasing the repo rate to 5.5% earlier this month.

The rupee provided some relief as it strengthened as much as 0.7% during Tuesday’s session to 95.0725 against the dollar before closing around 95.28, extending Monday’s sharp rebound after the RBI introduced measures aimed at reducing dollar demand and curbing speculative activity in the currency market.

The RBI has directed some dollar demand from state-run oil companies away from the open market, tightened requirements for certain derivatives transactions and restricted access to non-deliverable forward contracts without an underlying exposure.

The measures have helped the rupee recover after months of pressure from high oil prices and foreign capital outflows, although they have also disrupted parts of the currency derivatives market.

Oil prices also retreated on Tuesday after their recent surge, easing one of the biggest immediate pressures on Indian assets. India imports most of the crude it consumes, leaving the economy and the rupee particularly sensitive to sustained increases in energy prices.

Foreign investor selling remains a drag.

Overseas investors sold a net ₹1,708 crore of Indian shares on Monday, while domestic institutions bought ₹3,045 crore. Foreign selling had intensified through the first part of October after heavy withdrawals in September.

Indian equity mutual funds have continued to absorb part of that selling. Equity funds received ₹38,307 crore in September, the highest monthly inflow in five months, while investments through systematic investment plans reached a record ₹32,490 crore.

The Nifty 50 remains sharply lower for the year despite Tuesday’s rebound. The index had fallen 14.4% in 2026 through the end of September as foreign investors reduced exposure to Indian shares amid high valuations, rising oil prices and tighter global financial conditions.