Nifty 50 at 22,420.5 after early rise fades; rupee jumps on RBI steps

Rupee jumps on RBI steps

Currency markets were the clearest early mover. The rupee strengthened by nearly 1% to around 95.76 per US dollar in morning trade, after the Reserve Bank of India announced weekend measures aimed at reducing demand for dollars and limiting speculative activity. The US dollar index was at 102.13.

The RBI’s actions also fed directly into the rates and banking narrative. In the banking space, the Nifty Bank index fell 197 points, or 0.36%, to 55,059.50 in morning trade after opening higher at 55,350.15 and touching an intraday high of 55,416.45. Reports said the central bank will sell ₹25,000 crore of government bonds on Tuesday, a step that would absorb liquidity from the banking system.

Banks also face tighter operating constraints from a change to cash reserve ratio maintenance. The RBI raised the minimum daily maintenance requirement to 99% from 90%, effective October 16, limiting flexibility in managing reserve balances.

Bond-market moves have been closely watched since the central bank’s recent shift. On October 9, India’s benchmark 6.94%, 2036 government bond yield was reported at 7.3043% intraday and 7.2994% at the close, up from 7.2868% previously, after touching an intraday high of 7.3136%.

Commodities and crude offered a different set of signals. Brent crude was down 1.45% to $103.1 a barrel in early trade. In precious metals, COMEX gold was around $4,229.6 an ounce, and COMEX silver at $61.51 an ounce, with silver in India at ₹225.73 per gram. Domestic gold prices were cited at ₹1,51,440 per 10 grams for 24-carat and ₹1,13,580 per 10 grams for 18-carat.

Context: a market trying to stabilise

Monday’s choppy start comes after a volatile stretch for Indian equities. The Nifty ended October 9 at 22,520.45, up 288.65 points or 1.30%, while the Sensex rose 879.09 points or 1.23% to 72,472.33. Derivatives positioning that day put Nifty October 2026 futures at 22,625, a premium of 104.55 points to the cash close.

That rebound followed a sharp slide earlier in the month. On October 8, the Nifty closed at 22,231.80, down 1.64%, described as its lowest closing level since April 7, 2025. The index hit an intraday low of 22,179, marginally below a prior 52-week low of 22,182, and was described as 15.7% below its 52-week high at that point.

Foreign flows have been a persistent pressure point in the recent drawdown. On October 8, foreign portfolio investors were reported to have net sold ₹12,943 crore, while September and October-to-date outflows were put at ₹57,979 crore. Another estimate said foreign investors sold more than ₹45,000 crore of equities in six trading sessions in October, taking total net outflows in 2026 to ₹3.6 lakh crore.

The selling has not been uniform, and block activity has also shaped stock-specific moves. On October 8, large transactions were cited in ITC, with multiple GQG-linked entities reported as sellers in bulk and block deals; ITC shares were down 4.03% that day. Sectoral declines then were led by realty, auto and consumption, with Nifty Realty down 3.16%, Nifty Auto down 2.49% and the Nifty consumption index down 2.15%.

For the rest of Monday, the focus turns to whether the stronger rupee and lower crude can offset the near-term drag from tighter liquidity and elevated yields, particularly for rate-sensitive lenders. Investors are also watching for corporate updates, including HCL Technologies’ Q2 FY2027 results expected later on October 12, which could set the tone for IT counters after early weakness in names such as Tech Mahindra.