After the sharp fall at the end of September, driven by US tariffs and heavy selling by foreign investors, October turned out to be a remarkable comeback month for the Indian stock market. The optimism that began the month largely materialised.
On one hand, strong Q2 FY26 corporate results supported the market, while positive developments in US-China trade talks and expectations of a US Fed rate cut further boosted investor confidence. Robust festive demand and the gradual return of FIIs fuelled the rally. By the end of the month, the Sensex and Nifty climbed close to 13-month highs, completely reversing September’s negativity.
Let us understand how the market performed in October 2025 and what lies ahead in November.
October 2025: Market Performance
October 2025 turned out to be a highly positive month for the Indian stock market. The Nifty began the month around the 24,600 level and crossed the 26,000 mark on October 23 before witnessing a mild correction later. Similarly, the Sensex rose from around 80,150 to above 85,200, reflecting a recovery of nearly 5,000 points.
On October 1, Nifty opened at 24,620.55 and closed at 25,877.85 on October 30, marking a growth of 5.11%. Meanwhile, the Sensex registered a gain of 5.23%. Historically, October has been one of the best-performing months in recent years, driven by festive demand, Diwali sentiment, optimism around the US-India trade deal, and strong Q2 corporate results.
Major Triggers in October
Economic Data and US-China Trade Deal: The biggest positive development in October came from progress in US-China trade communications. Reports suggested that senior officials from both countries had prepared a framework for an initial trade deal, which was submitted for review to US President Donald Trump and Chinese President Xi Jinping. This raised hopes of easing global trade tensions and lent support to the Indian market.
India-US Trade Agreement: Significant progress was also made toward a trade deal between India and the United States. Officials indicated that both countries are ‘very close’ to finalising the agreement. The deal aims to double bilateral trade from the current $191 billion to $500 billion by 2030. However, Commerce Minister Piyush Goyal clarified that India will not rush into any agreement.
RBI’s Monetary Policy: At the beginning of the month, on October 1, the Reserve Bank of India (RBI) kept the repo rate unchanged at 5.50% and maintained its ‘neutral’ stance. The key takeaway from this meeting was the RBI’s strong confidence in the resilience of the Indian economy. The central bank also raised India’s GDP growth forecast for FY2025-26 from 6.5% to 6.8%, giving markets a positive direction.
Festive Demand: The long festive season and GST cuts boosted car sales across the country to new highs. Consumer sentiment remained upbeat, and several major car brands reported their highest-ever booking records.
Foreign Flows: In October 2025, FIIs showed a noticeable shift in sentiment. After three consecutive months of selling, FIIs made net purchases worth Rs 7,500 crore by October 29, while DIIs recorded substantial net buying of Rs 43,256 crore. This positive participation from both FIIs and DIIs contributed to the strong momentum witnessed in the market throughout the month.
October 2025: Sectoral Performance
Sectoral performance in October remained largely positive. PSU Banks, Capital Markets, and Realty stocks performed exceptionally well, while only the Media sector saw a marginal decline.
In October, there was broad-based bullishness not only in the Nifty and Sensex but also across major sectoral indices, with all ending the month in green except the Media Index.
What to Expect in November?
The India-US FTA may see notable progress as both countries aim to complete the first phase of the deal by year-end. If the agreement succeeds in reducing tariffs on Indian goods to around 15%, it will serve as a major confidence booster for investors and industry alike.
Currently, bilateral trade between the two nations stands at $191 billion, with a target to reach $500 billion by 2030. US President Donald Trump has stated that India has agreed to tariff relief in exchange for cutting Russian imports, following a 25% tariff imposed on Indian goods as a penalty for oil purchases from Russia.
Additionally, global geopolitical events and FII inflows and outflows will continue to play a key role in shaping the market’s direction in November.
*The article is for information purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
