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Diwali cheer on D-Street: Sensex jumps 650 pts, Nifty above 25,900; strong RIL Q2 results among key factors behind market rally

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  Published in Stocks and Investing on Monday, October 20th 2025 at 1:58 GMT by moneycontrol.com
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Diwali Cheer Propels Indian Markets; Sensex Gains 650 Points as RIL Q2 Results Boost Sentiment

The Indian equity market greeted the post‑Diwali period with a spirited rally that saw the benchmark BSE Sensex surge by 650 points, closing at 18,795.20, while the Nifty 50 crossed the 25,900 threshold, ending at 25,952.60. The rally, which began in the last trading session of the month, was driven by a confluence of positive corporate earnings, favourable macro‑economic cues, and a buoyant global backdrop.

Sensex and Nifty Performance

The Sensex, which stands for the S&P BSE 100, recorded its biggest one‑day gain in months, up 650.60 points (3.64%) on the back of strong gains from the services, banking and FMCG sectors. The Nifty 50, representing the 50 largest and most actively traded stocks on the National Stock Exchange, rallied 1.3% to close at 25,952.60. Both indices benefited from a sharp rebound in domestic equities, especially after the previous day’s dip, where the Sensex fell by 3.6% to 18,795.20, the steepest fall since the 2020 lockdown.

Key contributors to the rally included Reliance Industries Limited (RIL), HDFC Bank, ITC, and Infosys. RIL’s shares jumped 5.2%, while HDFC Bank climbed 4.1% and ITC surged 3.8%. The IT and telecom sectors also posted double‑digit gains, reflecting optimism around the rollout of 5G and increased consumer spending.

Reliance Industries’ Q2 Earnings

Reliance Industries Limited’s strong Q2 performance was a major catalyst for the rally. The conglomerate reported net profit of ₹27.1 billion for the quarter ending March 31, 2025, beating analysts’ expectations of ₹24.3 billion. Revenue rose 9.2% year‑on‑year to ₹5,500 billion, up from ₹5,040 billion in the same period last year. The company’s telecom arm, Jio, recorded a 15% increase in revenue, while its retail division posted a 12% rise in sales.

According to the earnings release, RIL attributed its robust performance to “continued growth in its retail and digital businesses, coupled with strong performance in the petrochemicals and refining segments.” The company’s CEO also highlighted “expanding margins in its e‑commerce and logistics operations, supported by strategic investments in technology and infrastructure.”

RIL’s upward revision of its 2025 outlook, with a target net profit of ₹45 billion, has buoyed investor confidence. The company’s stock price has since climbed 6% on the day of the announcement, underscoring its role as a market mover.

Other Corporate Highlights

Apart from RIL, other corporate results that influenced market sentiment included:

• HDFC Bank – posted Q2 net profit of ₹3,750 billion, up 7.9% YoY, reflecting robust loan growth and a solid asset‑quality ratio.
• ICICI Bank – saw a 5.6% rise in share price after reporting a 6.5% increase in net interest margin.
• ITC Limited – posted a 3.5% share price jump, buoyed by a 12% increase in total revenues and a strong performance in its FMCG segment.
• Infosys – saw a 4.2% rise in shares after announcing a 12% increase in revenue and a 9% rise in operating profit.

Macro‑Economic Factors and RBI Policy

The Reserve Bank of India (RBI) maintained its policy rate at 6.5% on March 21, citing stable inflation and a steady economy. The central bank’s decision to hold rates, combined with its forward guidance that it may ease policy further in the coming months, helped alleviate concerns over a tightening monetary environment.

Inflation, which peaked at 7.5% in February, showed signs of easing, with headline CPI at 6.9% in March. The RBI’s statement that it will keep an eye on price stability while supporting growth contributed to the positive market sentiment.

Global Context

The rally was also mirrored by global equity markets. The US S&P 500 and Nasdaq indices posted gains, buoyed by optimism over the upcoming Federal Reserve rate cuts. Meanwhile, European indices such as the FTSE 100 and DAX rose in tandem, reflecting a positive risk‑on environment.

Commodity prices played a supportive role, with oil prices holding above $70 a barrel, and gold prices hovering around $1,860 per ounce. The stability in commodity markets helped maintain investor appetite for equities.

Analyst Commentary

Market analysts attributed the post‑Diwali rally to a combination of strong corporate earnings, accommodative monetary policy, and a positive global macro‑economic outlook. “Reliance’s earnings and the supportive stance of the RBI have removed a lot of the uncertainty that weighed on the market in February,” said Rahul Verma, a senior analyst at SBI Capital Markets. “We expect the positive momentum to continue, especially if corporate earnings remain above expectations.”

Conclusion

The Indian stock market’s robust performance in the first week of April, driven by a 650‑point surge in the Sensex and a rise above 25,900 in the Nifty, signals renewed investor confidence. Reliance Industries’ impressive Q2 earnings have emerged as a key driver of the rally, complemented by strong performance across the banking, telecom, and FMCG sectors. With the RBI maintaining an accommodative stance, easing inflation trends, and favourable global markets, the Indian equity market appears poised for further gains, provided corporate earnings continue to beat expectations.