Sensex Jumps Over 800 Points as IT Stocks Hit an Eight-Month High, With L&T Technology Services Surging 15%

Indian equities opened the post-Dussehra session on a strong note on Wednesday, October 21, as technology stocks extended a powerful October rally and positive global cues lifted sentiment on Dalal Street.

The BSE Sensex opened at 74,337.93 and rose as much as 830 points, or 1.12%, to an intraday high of 74,682.19. The NSE Nifty 50 climbed as much as 231 points to 23,120.90. Gains moderated as the morning progressed, with the Sensex trading about 300 points higher at around 74,150 and the Nifty near 22,940 by 10:30 a.m. Markets had been closed on Tuesday for Dussehra.

The rally was led by information technology stocks. The Nifty IT index rose 2.5% to 32,314.35, its highest level since February 20, extending its gain for October to about 16%.

L&T Technology Services leads the charge

The standout performer was L&T Technology Services (LTTS), whose shares surged 15% to ₹4,143 after the engineering services company reported strong results for the July-September quarter.

LTTS reported consolidated net profit of ₹548.2 crore, up 66.8% from a year earlier. The figure included a one-time gain of about ₹165 crore; excluding it, profit rose 16.5%. Revenue grew 12.1% to ₹3,040 crore, and the company's EBIT margin came in at 16.3%.

Deal wins were another highlight. LTTS said large deals signed in the quarter had a total contract value of $203 million, with more than half of that value linked to artificial intelligence. Management said it expects the second half of the fiscal year to be better than the first, reassuring investors about demand for engineering and research services.

IT stocks' remarkable October

The technology sector's rally this month has been one of the biggest stories in Indian markets. Shares of Tata Consultancy Services have climbed about 23% in October, according to market data, as investors rotated back into a sector that had been heavily sold earlier in the year on fears that generative AI would erode demand for traditional IT services.

Several factors have driven the turnaround. Second-quarter results from the largest IT companies have generally been better than feared, with signs of stabilising demand and growing AI-related deal flow. A weaker rupee, which traded around 94.62 per dollar, boosts the value of overseas earnings. And optimism about a trade agreement between the United States and India has improved the outlook for exporters.

Strong earnings from US companies, with 86% of S&P 500 firms reporting so far beating estimates according to LSEG data, have also improved sentiment towards technology and AI-related businesses globally.

Reliance gains as Jio IPO opens

Reliance Industries shares rose about 2% as the initial public offering of its telecom and digital unit Jio Platforms opened for subscription. The IPO, India's largest ever, is being closely watched as a test of investor appetite for large offerings and of the valuation of India's biggest telecom operator.

As one of the heaviest-weighted stocks in both the Sensex and the Nifty, Reliance's move added meaningfully to index gains.

Gainers and losers

Hindustan Zinc rose about 4%, while Bajaj Finance fell about 3% after its second-quarter results, as investors weighed asset quality and growth trends at the non-bank lender.

In the primary market, HD Fire Protect listed at a premium of about 24% to its IPO price after its offering was subscribed about 132 times, underscoring continued strong demand for new listings in India despite the volatility in global markets.

Analysts urge selectivity

Market strategists cautioned that the rally is driven by specific sectors and companies rather than broad-based buying. "Despite the external headwinds, this is a stock picker's market now," said VK Vijayakumar, chief investment strategist at Geojit Investments.

Hemang Gor, an analyst at Axis Securities, said the Nifty faces resistance around 23,150, with support at about 22,850. A decisive move above resistance could open the way for further gains, while a break below support could signal renewed weakness.

Not all observers are optimistic. Veteran investor Marc Faber, publisher of the Gloom, Boom & Doom Report, told Business Standard in an interview published this week that he believes the "great bull-market" in Indian equities "is over," pointing to high valuations and global risks.

The global backdrop

Global factors remain mixed. Asian markets rebounded strongly on Wednesday, with South Korea's market up about 4%. However, Brent crude oil traded around $110 a barrel after touching a five-month high, a significant concern for India, which imports most of its oil. The US 10-year Treasury yield, at about 5.1%, remains near multi-decade highs, putting pressure on emerging market currencies and capital flows.

Foreign portfolio investors have been net sellers of Indian equities for much of the year, although selling has eased in recent weeks. Domestic institutional investors, supported by steady inflows into mutual funds through systematic investment plans, have provided a cushion.

The rupee and foreign flows

The rupee's weakness has been a double-edged sword for markets. While it supports exporters such as IT services companies and pharmaceutical makers, it raises the cost of imported oil, electronics and other goods, adding to inflationary pressure. It also reduces returns for foreign investors measured in dollars, which has contributed to persistent selling by overseas funds this year.

Analysts say a sustained recovery in foreign inflows would likely require a combination of a stable rupee, a clearer path for US interest rates and progress on the US-India trade deal. Until then, domestic investors are expected to remain the main driver of market direction, with sector and stock selection more important than broad index exposure.

What it means for investors

The rally in IT stocks shows how quickly sentiment can shift. Shares that were shunned on AI fears earlier in the year are now being bought on evidence that the industry is adapting and winning AI-related work. For investors, the question is whether the momentum can be sustained as valuations rise.

The coming days will bring more second-quarter results, the outcome of the Jio IPO, and developments on the US-India trade deal. Combined with oil prices and US interest rate expectations ahead of the Federal Reserve's October 27-28 meeting, these will determine whether the market can build on Wednesday's gains. The figures in this report reflect intraday trading on October 21. For now, the message from Wednesday's session is that investors are willing to reward companies that deliver strong results, even as broader uncertainty persists.