Indian Markets Rebound on Falling Oil Prices, Fed Hopes

The Cliff News | 5 October 2026

Indian equity markets experienced a robust rebound in early trade on Monday, with both the benchmark Sensex and Nifty indices posting significant gains. The recovery was attributed to a dip in global crude oil prices and receding anxieties about further interest rate hikes by the U.S. Federal Reserve following their upcoming October meeting.

The 30-share BSE Sensex witnessed a substantial jump of 413 points, reaching 72,315 in early trading. Simultaneously, the 50-share NSE Nifty climbed 131.55 points to 22,554.20. Later in the trading session, the momentum continued, with the Sensex surging to 72,594.57 (a gain of 705.70 points) and the Nifty advancing to 22,605.10 (up by 187.30 points).

Market Drivers: Oil and Fed Sentiments

A key factor bolstering market sentiment was the decline in Brent crude oil prices, which fell by 0.70% to $101.5 a barrel. This easing of oil prices typically translates to lower inflation concerns and improved economic outlook for oil-importing nations like India.

Furthermore, softer-than-expected U.S. employment data provided a degree of relief, alleviating immediate concerns about aggressive monetary tightening by the Federal Reserve at its October meeting. This development positively impacted global risk appetite.

"Softer-than-expected U.S. employment data has eased some immediate concerns over further Federal Reserve tightening at its October meeting, offering a degree of support to global risk appetite," said Ponmudi R., CEO, Enrich Money.

HDFC Bank Leadership Boosts Confidence

Adding to the positive market narrative was the appointment of Anup Bagchi as the new Managing Director and CEO of HDFC Bank. The Reserve Bank of India cleared his name on Thursday, October 1, 2026. Bagchi, who has a long association with ICICI Bank, is set to succeed Sashidhar Jagdishan and will officially take over on October 27, 2026, for a three-year term. This leadership transition at India's largest private sector lender is seen as a potential catalyst for a market turnaround.

V.K. Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd., commented on the market's potential, stating, "After eight weeks of declines, the market appears set for a rebound in the near term. The better-than-expected results of Accenture and the appointment of Anup Bagchi as MD and CEO of HDFC Bank have the potential to lead to a turnaround in the market."

Sectoral Performance and Investor Activity

Among the constituents of the Sensex, stocks such as Bajaj Finance, ITC, Bajaj Finserv, Larsen & Toubro, Axis Bank, and State Bank of India emerged as the leading gainers. Conversely, Bharat Electronics, Sun Pharma, Infosys, and Asian Paints were among the notable laggards.

Despite the day's rebound, foreign investors continued their selling spree. Foreign Institutional Investors (FIIs) offloaded equities worth ₹9,484.22 crore on Thursday, October 1, 2026, according to exchange data. This persistent foreign selling, along with elevated Treasury yields and geopolitical risks, could potentially cap further upside in the market.

Previous Market Trends

The rebound on Monday follows a period of declines. On Thursday, October 1, 2026, the Sensex had dropped 570.59 points, or 0.79%, to close at 71,909.70, while the Nifty tumbled 198.50 points, or 0.88%, ending at 22,421.95. Equity markets remained closed on Friday, October 2, 2026, for Gandhi Jayanti.

In Asian markets, Japan's Nikkei 225 index saw a significant jump of over 2%, while the Hang Seng index traded marginally lower. U.S. markets had concluded higher on Friday, October 2, 2026, indicating a mixed but generally positive global sentiment.