Why Is Market Rising Today? Key Factors Behind Diwali 2025 Rally In Sensex, Nifty On October 20

Kicking off the Samvat 2082 on a positive note, the Indian equity market is witnessing a rally in stocks on Monday, Diwali 2025, with both the Sensex and the Nifty rising by over 0.6% amid positive investor sentiments. The BSE Sensex was trading higher by nearly 603 points to 84,553, while the Nifty 50 climbed over 170 points, trading above the 25,850 mark at 25,881, as of 10:50 am.

The Nifty Bank also hit its fresh all-time high to trade at the 58,000 mark at 58,230.1.

Banks, financials, IT, pharma, oil & gas, and FMCG sectors were the top gainers. However, media, metal, realty, and consumer durables were in red in the early trade.

In the broader markets, the BSE Midcap and the BSE Smallcap were trading higher by 0.66% and 0.10% in the early trade.

Key Drivers Behind the Market’s Today

1) Global cheer lifts mood on Dalal Street

Indian equities mirrored the upbeat sentiment across global markets, with most Asian indices trading in the green. Japan’s Nikkei 225, South Korea’s Kospi, Shanghai’s SSE Composite and Hong Kong’s Hang Seng all posted gains in early trade.

The optimism followed a positive close on Wall Street on Friday, reinforcing risk appetite ahead of the festive week. Analysts noted that “global risk sentiment turned supportive”, giving domestic investors further confidence to build long positions.

2) Reliance, HDFC Bank Q2 results steer the rally

Heavyweight counters provided the strongest push to the benchmarks. Reliance Industries jumped over 3 per cent after reporting a robust 14.3 per cent year-on-year rise in consolidated net profit to Rs 22,092 crore for the September quarter. The company’s gross revenue touched Rs 2.84 lakh crore, up 10 per cent from a year ago, driven by double-digit growth in its Jio and retail arms.

HDFC Bank added 1.54 per cent after posting a 10 per cent increase in consolidated net profit to Rs 19,610.67 crore, helping lift banking shares across the board.

3) FIIs turn net buyers again

Foreign investors returned to Indian equities ahead of the festive break. Data from the exchanges showed that Foreign Institutional Investors (FIIs) bought shares worth Rs 308.98 crore on Friday, while Domestic Institutional Investors (DIIs) remained strong buyers to the tune of Rs 1,526.61 crore. The steady inflows provided an additional cushion to the market’s early gains.

4) Cooling crude boosts optimism

Brent crude slipped 0.36 per cent to $61.07 per barrel, offering comfort to investors concerned about inflation and India’s import bill. Softer energy prices are seen as a tailwind for corporate margins and consumer sentiment, both of which tend to lift equity valuations during festive periods.

5) Rupee firms up to one-month high

Adding to the positive setup, the rupee appreciated 14 paise to 87.88 against the US dollar in early deals, its strongest level in a month. The local currency gained on the back of strong foreign fund inflows, lower crude oil prices, and upbeat equity performance, reinforcing confidence in India’s macroeconomic stability.

“The momentum in the market, triggered by sustained huge DII buying, marginal FII buying, news of brisk festival season sales of automobiles and white goods, is set to continue with more positive news. The early Q2 results indicate a sharp recovery in earnings. Results of HDFC Bank and RIL are particularly impressive. The good results of HDFC Bank, particularly the improving asset quality, can sustain the momentum in Bank Nifty, which is already at record highs,” said V K Vijayakumar, chief investment strategist at Geojit Investments Limited.

Technical View

Anand James, chief market strategist at Geojit Investments Limited, said, “Friday’s firm close sets up conditions for opening gains today, with eyes on 25875-900 and a fair possibility for further extension. If such stretches fail to push and float above 26018, expect volatility to set in. Downside marker in such a scenario would be at 25630, but a collapse is less expected.”