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Re:

Indian Shares Rebounded as Fed-Hike Fears and Oil Prices Eased

The Nifty 50 and Sensex rose on October 5 after eight weekly declines, helped by softer Fed-hike expectations, easier crude concerns and financial-stock updates. The two-day bounce did not prove a lasting recovery.
From TheFinanceBase Team3 min to read
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Indian shares did rebound on October 5, 2026, after a pre-market forecast pointed to a stronger open. The Nifty 50 rose 0.60% to 22,555.75 and the Sensex gained 0.66% to 72,382.47, Reuters reported. Gains extended into October 6, but two sessions of advances did not establish that the market’s eight-week losing streak had turned into a durable recovery.

Why were Indian shares expected to rise?

Before the October 5 session, investors were reacting to two sources of relief: weaker-than-expected US jobs data and a pullback in crude prices. The jobs report reduced market expectations of an October Federal Reserve rate hike, while easing near-term oil supply concerns improved sentiment toward an oil-importing economy such as India, Reuters reported.

That was the backdrop to the pre-market signal. At 7:57 a.m. IST, GIFT Nifty futures stood at 22,639; the Nifty 50 had last closed at 22,421.95 on Thursday, as Indian markets were closed Friday for a public holiday. Futures indicated a positive start, not a guaranteed cash-market outcome. Reuters’ October 5 pre-market report also noted Brent crude was down 0.6% to $101.60 a barrel in Monday morning trading, amid higher Middle East exports and coordinated G7 stock releases.

Did Indian shares rebound on October 5?

Yes. At the October 5 close, the Nifty 50 was up 0.60% at 22,555.75 and the Sensex was up 0.66% at 72,382.47, according to Reuters. This was the realized one-day move, distinct from the earlier futures indication.

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Market breadth was positive: 13 of 16 major sectors advanced, and the small-cap and mid-cap indices also rose. Financial stocks led after companies issued quarterly business updates. Reuters reported Bajaj Finance’s new loans booked grew 11% year on year in the September quarter; it also cited advances growth at Punjab National Bank and Bank of Baroda and disbursement growth at Mahindra & Mahindra Finance. HDFC Bank drew attention after appointing Anup Bagchi as CEO-designate. These issuer-specific developments helped particular shares and should not be confused with the broader macroeconomic reasons investors welcomed.

Reuters’ closing report quoted Kruti Shah, a quant analyst at Equirus Securities, saying Indian markets stood at a crossroads, with domestic liquidity competing with a challenging global macro backdrop. Shah also said mean reversion was underway across large- and mid-cap stocks, while crude prices, global yields and liquidity remained key variables. That is an analyst’s assessment, not a forecast guarantee.

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What did the second day of gains show?

On October 6, Indian shares extended gains for a second day, RTTNews reported. It cited CME FedWatch market-implied odds of an October Fed hike at about 20%, compared with roughly 70% a week earlier. Those figures were time-sensitive market probabilities, not a Federal Reserve announcement or a promise about its decision. RTTNews’ October 6 report described the follow-through, but two sessions are a short window for judging whether the trend had changed.

What risks remained for Indian equities?

The bounce followed eight consecutive weekly declines in both the Nifty 50 and Sensex. Reuters associated that losing streak with record foreign selling, elevated crude prices and a sharp rise in global bond yields. Its October 5 pre-market report said foreign portfolio investors were net sellers for a sixth consecutive session, selling equities worth ₹94.84 billion on Thursday, based on provisional NSE data. Domestic institutional investors bought ₹100.42 billion that day, also according to the provisional figures cited by Reuters.

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Oil had eased, but Brent was still above $100 a barrel in Reuters’ Monday morning report. The news agency said a sustained recovery would require oil to ease further and foreign outflows to slow. Those are conditions to watch, not evidence that either risk had already been resolved.

  • Fed expectations and yields: Softer US employment data reduced rate-hike fears, but global yields remained among the pressures linked to the preceding decline.
  • Crude and supply: Lower prices and reduced near-term supply concerns helped sentiment; the reported Brent price remained elevated.
  • Investor flows: Domestic institutional buying offset some selling in the reported session, while foreign investors were still net sellers.
  • Breadth versus individual updates: Gains across most major sectors suggested the move was not confined to one group, while quarterly updates supported specific financial shares.
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How should investors interpret the rebound?

The October 5 advance confirmed that the pre-market optimism became a gain in the main indices, and the October 6 follow-through added a second positive session. The context remained mixed: broad sector participation and company updates supported prices, while the rally depended in part on changing expectations for US rates and a temporary easing in oil concerns.

For a personal investor, the useful distinction is between a short-term market bounce and evidence of a durable change in conditions. The reports establish the two-session move and identify oil, foreign flows, bond yields and rate expectations as relevant variables; they do not establish that the eight-week decline was definitively over.

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