Sensex 81,207, Nifty 24,894: Markets eke out gains; focus turns to earnings

Subhead: Benchmarks inched higher on Monday as financials steadied sentiment ahead of Q2 results. Traders weighed firm bank updates, oil and dollar moves, and an IMD yellow alert for NCR that could briefly dent footfalls.

Dateline: MUMBAI | Monday, October 6, 2025

Indian equities ended a seesaw session marginally in the green on Monday, with the Sensex closing at 81,207.17 (+223.86) and the Nifty 50 at 24,894.25 (+57.95). Gains were modest but broad enough to keep bulls in the game as earnings season begins, helped by strength in banking and financials after upbeat quarterly business updates from key lenders. Through the day, traders toggled between a sturdier dollar, crude price jitters, and incoming Q2 previews, before value pickers nudged indices higher into the close.

Financials did much of the heavy lifting. Pre-open and intraday flows favoured private banks after Kotak Mahindra Bank and HDFC Bank indicated healthy growth in their Q2 updates, while Bajaj Finance tracked gains on stronger assets under management—signals investors read as supportive as the results calendar gets underway. The tone was watchful, however: traders avoided chasing breakouts with larger policy and results risks on deck.

The session at a glance

Benchmarks: The Sensex and Nifty added 0.28% and 0.23% respectively, with a push in the last hour of trade. Midcaps and smallcaps outperformed on the day, adding close to 0.8–1%, as traders rotated into select consumption, financial and specialty names that stand to benefit from festive demand and stable credit costs.

Leaders & laggards: Financials, private banks and select consumer plays drew bids after lenders’ quarterly updates pointed to steady momentum in advances and deposits; Poonawalla Fincorp also vaulted to fresh highs following its business update. Metals were mixed, while defensives stayed steady.

Macro overlay: A brisk dip in sovereign yields—on states signalling lower-than-expected borrowing—added a tailwind to rate-sensitive pockets. The 10-year yield eased to near 6.50%, reinforcing hopes that financing conditions remain benign into earnings.

Weather watch: Locally, the IMD’s yellow alert for Delhi–NCR flagged spells of light to moderate rain and gusty winds into Tuesday, a near-term variable for retail footfalls and logistics though a net positive for air quality.

Why banks steadied the tape

Investors entered the week primed for financials to set the tone, and Monday obliged. Pre-open commentary and early ticks were buoyed by robust quarterly updates:

Kotak Mahindra Bank rallied after reporting firm advances and deposit growth in Q2.
HDFC Bank stayed in focus as business updates indicated a ~15% YoY rise in average deposits.
Bajaj Finance advanced on ~24% YoY AUM growth.

The takeaway for the street: credit momentum is intact, and while margin dynamics will be parsed closely in results, balance-sheet growth should underpin sector resilience into H2. That view—amplified by a softer bond-yield backdrop—helped defend key supports on the indices.

What traders said between the lines

Desk chatter suggested three working assumptions:

Earnings—not macro—will drive the next leg. With global rate expectations broadly priced (and even a whiff of future easing in some commentaries), the results tape takes primacy. The market prefers bottom-up stock picking to index bets as long as delivery matches the upbeat Q2 business updates.
Valuation sensitivity persists. The rally into Q4CY25 left little room for disappointment in high-flyers. Strong operational prints should be rewarded; misses may be punished asymmetrically given stretched pockets in mid/small-caps, despite Monday’s bounce.
Liquidity pockets matter. Fast money continues to cycle through financials, consumer, and select autos/IT on micro catalysts, while exporters and rate-sensitives listen to the bond tape.

The global cue card—in brief

Monday’s early positivity on Dalal Street traced partly to financials-led support and an ongoing narrative of rate-cut hopes abroad that had buoyed risk assets in recent weeks. While global impulses were mild intraday, traders acknowledged that prior US rate-cut expectations have been a pillar under equities, leaving the market susceptible to any hawkish surprises.

Sector scan: where money moved

Banks & Financials: The day’s anchor. Private banks rose on Q2 business updates; NBFCs with strong AUM prints joined the move. Watch for NIM commentary, credit cost trends, and deposit mobilisation granularity in the coming days.

Consumption: Aided by festive-season optimism and resilient urban demand proxies. Any heavy rain in NCR may briefly skew footfalls, but retailers typically recover over the festival arc.

IT & Exporters: Moves were stock-specific. With US macro steady and currency ranges tight, investors focused on deal wins and pricing as margin swing factors rather than FX one-offs.

Metals/Energy: Mixed, with traders toggling between dollar firmness and China data-watch. Positioning remained light into earnings.

Autos: Festival-led sentiment stayed constructive, but inventory and discounting patterns through October will decide leader boards.

Bonds, rupee, and the “financing conditions” lens

The surprise of the morning was on the bond side: an easing state borrowing calendar slashed supply angst and pulled the 10-year G-Sec down near 6.50%, adding an incremental tailwind to banks and rate sensitives. If this persists into mid-October, it could firm up the valuation floor for domestic cyclicals as capital costs ease at the margin.

The rupee hugged familiar ranges; traders flagged a watch on oil and US yields as the week’s swing factors.

IPO & primary market watch

Sentiment was also buoyed by attention on upcoming floats—Tata Capital and LG Electronics India among those on investor radar—keeping secondary markets honest as institutions plan allocations. Primary-market depth remains a good barometer of local risk appetite; a smooth run here would help rallies broaden beyond bank-led spurts.

Technical picture: levels that matter now

Nifty 50 (24,894):

Immediate resistance: 24,950 / 25,000 round number.
Support zone: 24,750–24,700; deeper guard at 24,600.

Sensex (81,207):

Ceiling: 81,400–81,500; an expansion above that band eyes 81,900–82,100.
Floors: 80,800 and 80,450.

Traders leaned on bank-led dips as entry points Monday, but remained disciplined with tight stops into major results. Price action through the 25,000 zone on Nifty—whether a clean break or rejection—will likely set the short-term tone. (Levels derived from today’s close and recent swing zones recorded by exchange data and market wraps.)

Near-term risks & offsets

Earnings asymmetry: High expectations create wider dispersion in post-result moves.
Crude & dollar: A sharp oil spike or US-rates repricing can sap risk appetite quickly.
Weather: IMD’s yellow alert in Delhi–NCR could affect physical retail, logistics and on-ground promotions early in the week—even as rain aids air quality and sentiment later.

Offsets include easier domestic yields, resilient bank credit updates, and—so far—firm consumer intent into the festive window.

The earnings season playbook (what matters most)

Margins vs. volumes: In consumption, investors want to see whether volume growth is broad-based or skewed to premium SKUs; in lenders, the margin watch is on NIM compression vs. credit cost stability.
Capex cadence: Industrials and capital goods will be tested on order inflows and execution, not just commentary.
Export engines: IT and pharma need deal visibility and pricing discipline to justify leadership.
Cash-flow quality: Across sectors, operating cash-flow alignment with reported earnings will be a differentiator in a high-valuation tape.