Sensex Surges 1,100 Points, Nifty Posts Biggest Rally in Over Two Months: 5 Key Reasons

Indian equity markets staged a sharp comeback on Tuesday, October 13, 2026, with the benchmark indices recovering their previous session's losses and closing substantially higher. Strong buying in information technology (IT) stocks, led by HCLTech and TCS, helped the Nifty 50 register a gain of 1.60%, its sharpest single-day rally in over 2-months.

The Sensex ended the session at 73,033.78, rising 1,109.10 points or 1.54%, while the Nifty 50 settled at 22,721.95, advancing 358.60 points or 1.60%. The recovery came a day after both indices declined nearly 0.7% amid foreign investor selling and global uncertainties.

Tuesday's trading session, however, was not entirely smooth. The Nifty opened at 22,364.15 and slipped to an intraday low of 22,288.45 during the initial phase of trading. Buyers subsequently stepped in, lifting the index above 22,500. After moving within a relatively narrow range during the afternoon, the index gathered fresh momentum towards the close. The late buying helped the Nifty finish above 22,700, reflecting sustained demand for heavyweight stocks.

Five Key Reasons Why the Indian Stock Market Surged Today

Indian benchmark indices staged a strong recovery on Tuesday, October 13, 2026, with the Sensex jumping 1,109.10 points and the Nifty 50 gaining 358.60 points. The rally was supported by a combination of positive economic developments, strong IT earnings and short covering ahead of the weekly expiry.

1. IMF Raises India's GDP Growth Forecast to 7%

The International Monetary Fund (IMF) upgraded India's FY27 GDP growth forecast to 7% from its earlier estimate of 6.4%, citing resilient domestic demand and strong services activity. It also raised the FY28 growth projection to 7% from 6.7%. The upward revision reinforced confidence in India's economic outlook despite elevated crude oil prices and global uncertainty.

2. IT Stocks Rally Following Strong HCLTech Earnings

The Nifty IT index surged 5.22%, recording its biggest single-day gain in approximately 17 months. HCLTech jumped 8.42% after reporting a 21.2% year-on-year increase in quarterly net profit to ₹5,132 crore. TCS gained 6.79%, while Tech Mahindra and Infosys advanced 4.93% and 4.13%, respectively. Strong buying in these heavyweight stocks provided substantial support to the benchmark indices.

3. Finance Minister's Remarks on LTCG Tax

Finance Minister Nirmala Sitharaman's willingness to consider suggestions regarding the removal of Long-Term Capital Gains (LTCG) tax on equities added to market optimism. Her remarks raised expectations of potential tax relief for long-term investors. However, no formal proposal or decision to remove the tax has been announced.

4. Short Covering Ahead of Nifty Weekly Expiry

Short covering also appeared to contribute to Tuesday's recovery. The Nifty's rise alongside a decline in open interest (OI) ahead of the weekly derivatives expiry suggested that traders were closing existing bearish positions rather than initiating fresh long positions. This unwinding of short positions likely accelerated the recovery, particularly during the final trading hour.

5. India VIX Drops by Over 7%

India VIX, which measures expected near-term market volatility, recorded a sharp movement of over 7% during the session. The volatility indicator remains important as traders adjust their positions around weekly expiry.

Rupee Appreciation Provides Additional Support

The domestic currency's recovery was another factor contributing to improved sentiment.

The rupee strengthened to around ₹95.27 against the US dollar during Tuesday's trading session, extending its gains following measures introduced by the Reserve Bank of India.

The central bank's recent arrangements to facilitate dollar purchases by public sector oil marketing companies are intended to reduce pressure on the spot foreign exchange market.

Mid-Caps Advance, Small-Caps Register Modest Gains

The positive momentum extended to the broader market, although smaller companies did not match the performance of the benchmark indices.

The Nifty MidCap 100 index ended 1.06% higher, while the Nifty SmallCap 100 gained just 0.11%.

Sectoral Performance: IT, Realty and FMCG Lead Gains

Most sectoral indices finished higher, with technology stocks accounting for the largest gains.

The Nifty IT index surged 5.22%, supported by strong buying in HCLTech, TCS, Tech Mahindra and Infosys.

Real estate stocks also attracted buyers, pushing the Nifty Realty index up 2.46%. Meanwhile, Nifty FMCG and Nifty Auto advanced more than 1% each.

Pharmaceutical stocks were an exception, with the Nifty Pharma index declining marginally by 0.01%.

European Indices Advance During Afternoon Trade

European stock markets were trading higher on Tuesday, October 13, with all three major indices posting gains during the ongoing session.

Germany's DAX was up 102.69 points, or 0.41%, at 25,380.37. The UK's FTSE 100 recorded a stronger advance of 68.39 points, or 0.64%, to 10,724.67.

France's CAC 40 also remained in positive territory, rising 12.19 points, or 0.16%, to 7,845.07.

US Futures Diverge as Nasdaq 100 Faces Selling Pressure

US equity futures presented a mixed picture ahead of Tuesday's Wall Street opening, with technology-heavy Nasdaq futures lagging the broader market.

Dow Jones futures climbed 318 points, or 0.61%, to 52,428, indicating expectations of a firmer opening for the blue-chip index.
S&P 500 futures were almost unchanged, trading 3.25 points, or 0.04%, higher at 7,861.25.

In contrast, Nasdaq 100 futures declined 153 points, or 0.50%, to 30,745.25, suggesting continued caution towards technology stocks.