India’s equity market experiences resurgence amid festive consumption. stable Q2 earnings

New Delhi, Nov 19 India’s equity markets experienced a powerful resurgence in October, driven by strong festive consumption, stabilising Q2 earnings, and a clear revival in foreign investor appetite, a report said on Wednesday.

The nation's macroeconomic backdrop remained notably supportive through the month. Additionally, consumer inflation eased to 1.54 per cent, marking its lowest level since 2017, while the Reserve Bank of India retained the repo rate at 5.5 per cent and revised the FY26 GDP growth forecast to 6.8 per cent, PL Asset Management said in its report.

The rupee held steady at Rs 88.76 to the US dollar despite a firmer dollar index, underscoring currency stability in a period of global volatility.

At the same time, industrial activity showed further strength, with the manufacturing PMI jumping to 59.2 from 57.7 in September, and domestic liquidity remained robust as SIP inflows touched an all-time high of Rs 29,361 crore.

"This stability was complemented by buoyant festive-season consumption, which generated record sales of over $67 billion across automobiles, electronics, and consumer durables," said the report.

A key theme emerging through October was the stabilisation of India’s corporate earnings cycle. Earnings downgrades, which had pressured market sentiment in earlier quarters, have now largely bottomed out.

At the same time, the country’s investment cycle continues to show encouraging signs.

"Gross fixed asset additions between FY20 and FY25 represent the strongest expansion since FY10, with visible capex traction in construction materials, electricity generation, and consumer goods," the report noted.

Meanwhile, capacity-building momentum remains strong in chemicals, while metals are recovering after two muted investment cycles. These trends were supported by improving liquidity conditions and neutral valuations, strengthening the outlook for a sustained cyclical recovery.

The report noted that while global markets continued to advance on optimism around US-China trade progress and expectations of a Fed rate cut, India distinguished itself with robust domestic demand, strengthening macros, and improving liquidity conditions.

Sectors such as PSU Banks, Capital Markets, Metals, Defence and Realty led the domestic rally, signalling renewed confidence across both institutional and retail participants. The report anticipated that in the near term, markets will remain resilient yet range-bound as investors assess Q2 earnings and track global interest rate expectations. However, the medium-term outlook appears decisively constructive.

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