The first half of October 2025 brought a mix of optimism and caution to Indian markets. The Indian rupee strengthened, gold ETFs continued to attract record inflows, and equities showed resilience. However, IPO-bound stocks struggled, reflecting investor caution. Here’s a comprehensive analysis of the key market movements, macroeconomic drivers, sectoral trends, and what investors should watch.

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Market Overview

Indian equities began October on a positive note, snapping an eight-day losing streak. The Nifty50 closed at 25,323.55 on October 15, gaining 0.71% for the day, while the Sensex rose 575.45 points to 82,605.43.

The recovery was supported by:

Rupee appreciation: The Indian rupee strengthened to 87.9250 per USD on October 15, aided by RBI interventions and a weaker U.S. dollar. Easing crude oil prices: Lower global crude helped reduce import pressure and improved investor sentiment in energy-sensitive sectors. Policy expectations: Dovish statements from the RBI and anticipation of supportive liquidity measures boosted market confidence.

Despite the positive momentum, market breadth remained mixed. On October 15, of 3,189 stocks traded on the NSE: 1,979 advanced, 1,125 declined, and 85 remained unchanged. A total of 67 stocks hit 52-week highs, while 95 hit 52-week lows.

Sectoral Performance

1. Gold & Precious Metals

Gold ETFs continued to attract strong inflows, with investors seeking safety amid global uncertainties. In September, inflows reached ₹8,363 crore, a more than fourfold increase from the previous year.

2. Financials & Private Banks

Bajaj Finance hit a new 52-week high of ₹1,059.65, rising 4.03% on October 15 . IndusInd Bank fell 1.25% over the same period due to profit-taking and sector rotation.

3. IT & Technology

The IT sector faced mild headwinds, with Tech Mahindra declining 0.62% on October 15, reflecting profit booking and sectoral rotation.

4. IPO-Bound Stocks

Stocks preparing for upcoming IPOs, such as OYO and Groww, witnessed sharp declines — in some cases up to 48% in two weeks — due to valuation concerns and weak sentiment after mixed IPO performances in September.

Macro and Economic Drivers

Rupee Recovery: Strengthened to a near one-month high, providing relief to importers and reducing currency-related risks for companies with foreign debt. Trade Deficit: Widened to $32.15 billion in September due to higher gold imports ahead of the festival season and lower exports to the U.S., emphasizing external sector pressures. Inflation: Retail and wholesale inflation remained subdued in September, giving the RBI room for potential accommodative policy if required.

Key Market Movers (Top Volume Stocks)

InterGlobe Aviation (IndiGo): High trading volumes ahead of Nifty index reshuffle and sector optimism. Max Healthcare: Benefited from index inclusion flows. Private Banks: Elevated volumes driven by selective selling and repositioning.

Disclaimer: Educational purposes only, not a recommendation to buy or sell.

Global Economic Context

US Fed: Dovish rhetoric by Fed Chair Powell kept global yields subdued and impacted capital flows into emerging markets. Eurozone PMI & Inflation: Moderated growth signals influenced risk appetite for Indian exporters. China: Trade and manufacturing data suggested softer demand for commodities, impacting sectors linked to exports. Geopolitical Events: Ongoing global uncertainty and energy price volatility kept safe-haven flows elevated.

Investor Takeaways

Currency Watch: Rupee strength provides relief to importers but monitor its impact on exporters. Gold Allocation: Continued inflows indicate the importance of maintaining a tactical hedge in gold. IPO Caution: Weak sentiment in pre-IPO stocks highlights the need for due diligence and valuation checks. Selective Stock Picking: Focus on fundamentally strong, high-quality companies in resilient sectors.

Conclusion

The first half of October 2025 showed a mix of recovery and caution. Markets responded positively to rupee appreciation, easing crude oil prices, and RBI policy expectations. However, sector-specific weakness, especially in IPO-bound stocks, highlighted lingering risks. Investors should remain vigilant, maintain diversification, and strategically allocate to gold and quality equities to navigate the evolving market environment.

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