Benchmark indices Sensex and Nifty extended gains for a second consecutive session on Friday, driven by sustained momentum in information technology, auto, metal, and PSU banking stocks. Continued buying helped the indices recover ground, though analysts note that broader market direction now hinges on five critical macroeconomic and corporate catalysts.
The Bottom Line
- Support and Resistance: The Nifty must sustain above the 22,750–22,800 support zone to maintain its recovery, with immediate resistance established between 23,400 and 23,450.
- Earnings Momentum: Heavyweight lenders including HDFC Bank (NSE: HDFCBANK) posted Q2 results on Saturday, setting the tone for financial sector credit demand and deposit mobilization.
- External Headwinds: Escalating geopolitical friction in the Middle East pushed crude oil to $110, introducing fresh volatility to global energy supplies and domestic currency valuations.
Banking Earnings Set the Tone for Financial Heavyweights
Major private lenders HDFC Bank, ICICI Bank (NSE: ICICIBANK), and Axis Bank (NSE: AXISBANK) declared their Q2 financial results on Saturday. Investors closely parsed the disclosures for indicators on loan growth, deposit mobilisation, margins, and overarching asset quality. India’s largest private lender HDFC Bank posted a net profit of Rs 19,510 crore for the second quarter of FY27, marking a 4.6% increase from Rs 18,641 crore recorded during the same period last year.
STOP SCROLLINGEight weeks of pain. Then a 3% rally. The Nifty just had its best week since April. IT stocks added $30 billion in market value in five days. And for the first time in months, FIIs actually turned buyers on Friday.Here is everything that moved the Indian market… pic.twitter.com/SFfqCaqCDi
Furthermore, HDFC Bank’s net interest income—defined as interest earned less interest expended—grew 9.7% to Rs 34,620 crore for the quarter ended September 30, 2026, compared to Rs 31,550 crore in the corresponding period of the previous fiscal year. Market participants continue to evaluate management commentary for broader cues on credit demand across retail and corporate segments.
| Financial Metric (Q2 FY27) | HDFC Bank |
|---|---|
| Net Profit | Rs 19,510 crore (up 4.6% YoY) |
| Net Interest Income | Rs 34,620 crore (up 9.7% YoY) |
Crude Oil Surge Tests Macroeconomic Resilience
Crude oil prices climbed sharply on Friday to clinch $110 for the first time since May as security concerns intensified in the Strait of Hormuz. Iran’s intensified attacks, missile launches targeting Saudi Arabia, and Ukrainian pledges to resume strikes on Russian refineries compounded fears of prolonged supply disruptions.
Market strategists remain divided on the conflict’s duration and ultimate economic fallout. Analysts at JPMorgan noted that the war’s trajectory remains difficult to model accurately, as several economic thresholds previously considered unlikely to be crossed have now been breached.
Information Technology Stocks Rebound Amid Relative Strength
Domestic IT equities, including TCS, Tech Mahindra, Infosys, and Wipro, experienced a strong weekly rally, climbing up to 17% and lifting the broader index by 12% over the period. Better-than-expected corporate earnings paired with a sharp plunge in artificial intelligence-linked equities catalyzed the rotation.
According to Sudeep Shah of SBI Securities, the Nifty IT index sits firmly in the leading quadrant of the Relative Rotation Graph, displaying robust relative strength. The immediate overhead resistance zone rests between 32,000 and 32,200.
Foreign Institutional Outflows Ease While Domestic Inflows Offset Pressure
Foreign institutional investors remained net sellers for the ninth consecutive week, though weekly outflows moderated significantly to Rs 8,991 crore compared to Rs 30,294 crore in the preceding week, as tracked by Bajaj broking. FIIs turned net buyers of Rs 1,166 crore on Friday.
Conversely, domestic institutional investors maintained net buyer status for the ninth straight week with inflows totaling Rs 7,813 crore, despite a net sale of Rs 3,661 crore on Friday. Month-to-date domestic buying of Rs 48,168 crore has almost entirely offset foreign net selling of Rs 48,769 crore.
Pabitro Mukherjee of Bajaj Broking observed that while moderating outflows signal stabilization in market sentiment, elevated crude prices continue to present downside risks to the ongoing recovery.
Rupee Recovers Ground Following Policy Stabilization Measures
The Indian rupee advanced 2% over the week, recording its strongest weekly gain in seven months. The currency closed at Rs 94.96 per US dollar, advancing 0.1% on the day and clawing back ground from near its record low of Rs 96.96 per dollar.
Analysts maintain that a durable recovery for the domestic currency depends heavily on easing the underlying pressures on the rupee.
