Share Market News: Banks showed their strength, the market boomed, investors earned Rs 4 lakh crore

Share Market News: After eight consecutive days of decline, the stock market witnessed a strong rally in October 2025. The Bombay Stock Exchange (BSE) benchmark Sensex gained over 800 points to close at 81,068.43. The Sensex had started the day on a positive note, but after the Reserve Bank of India (RBI) announced no change in policy rates, the market saw a slight decline and reached a low of 80,173.24. Meanwhile, the National Stock Exchange (NSE) Nifty also rose over 250 points to reach a high of 24,867.95, although it also touched a low of 24,605.95 during the day.

Banking stocks surge

The RBI announced several long-term benefits for the banking sector and the economy, leading to a strong rally in banking stocks. Kotak Mahindra Bank shares gained nearly 3%. Axis Bank shares were trading with gains of 2.25%. Shares of ICICI Bank and HDFC Bank also closed with gains of over 1.50%. Tata Motors shares also saw a strong gain of 5.50%.

Key Reasons for the Rise

1. RBI Monetary Policy

The RBI's Monetary Policy Committee unanimously decided to keep the repo rate unchanged at 5.50%. RBI Governor Sanjay Malhotra stated that growth and inflation dynamics have changed since the August policy. The rationalization of GST and a decline in food prices have led to a more favorable inflation outlook. Consequently, the central bank lowered its average inflation forecast for FY2026 from 3.1% to 2.6%.

2. Boost to the Banking Sector

A surge in shares of major banks such as HDFC Bank, Kotak Mahindra Bank, ICICI Bank, and Axis Bank led the Nifty Bank index to gain over 1%. To improve loan flow, the RBI increased the loan limit on shares from Rs 20 lakh to Rs 1 crore and the limit for IPO financing to Rs 25 lakh. This is being seen as a major boost to the banking sector.

3. Oversold Market Conditions

After eight consecutive days of declines, the Nifty had lost 3% (approximately 800 points) and the Sensex had lost 3.8% (approximately 2,300 points). A buy-on-the-dips strategy and strong RBI comments boosted the market.

4. Rupee Improves

The Indian rupee stabilized and gained 5 paise to 88.75 against the US dollar. The dollar remained at a one-week low, supporting Indian markets amid fears of a possible US government shutdown.

5. Crude Oil Price Impact

Crude oil prices fell due to expectations of increased production by OPEC+ and the resumption of exports from Iraq's Kurdistan region. Brent crude fell 1.3% to $67.10 per barrel, and US West Texas Intermediate fell 1.5% to $62.51 per barrel.

6. Positive Signals from Foreign Markets

US stock markets closed with gains on Tuesday. The S&P 500 rose 0.41% to 6,688.46, and the Nasdaq Composite rose 0.31% to 22,660.01. The Dow Jones Industrial Average gained 0.18% to close at 46,397.89, a new record.

Investors Gained Rs 4 Lakh Crore

Investors gained approximately Rs 4 lakh crore due to this rally. The BSE market cap rose to ₹4,55,41,976.54 crore on Wednesday from ₹4,51,44,414.11 crore on Tuesday, representing an increase of ₹3,97,562.43 crore.