Are the bulls coming back? Decoding India’s October 2025 Market Rally
- Remin Francis I R
- 2 days ago
- 2 min read
If you’ve been tracking the Indian stock market recently, you’ve likely noticed a distinct shift in sentiment. After a period of volatility, the bulls made a decisive comeback in October and November.
But what exactly flips the switch? Was it domestic strength, global cues, or just market noise?
According to the latest RBI Bulletin, it wasn’t just one factor; it was a convergence of favourable global tides and strong domestic fundamentals. Let’s dive into what fueled the rally and what it means for investors.
The Macro "Sweet Spot"
The market didn’t just rise on hope; it rose on hard data and strategic optimism. The report highlights a few heavy hitters that set the stage:
The India-US Trade Optimism: Markets love certainty and growth. Positive cues regarding an India-US trade deal acted as a major adrenaline shot for investor sentiment.
Corporate Resilience: Despite global headwinds (like the US-China trade tensions), Indian companies delivered healthy corporate earnings for Q2: 2025-26.
Global Tailwinds: Two external factors played in India's favour: a moderation in global crude oil prices (always good for India’s import bill) and a policy rate cut by the US Federal Reserve, which generally encourages money to flow into emerging markets like India.
The Return of the FPIs
For three months leading up to October, Foreign Portfolio Investors (FPIs) were pressing the "sell" button, pulling money out of Indian equities.
In October, they pulled a U-turn.
FPIs became net buyers again, a trend that continued well into November. Why the sudden change of heart?
Robust Quarterly Earnings: Indian companies proved they are making money.
Improved Valuations: Stock prices reached levels that foreign investors found attractive again.
The IPO Allure: The primary market offered opportunities that were too good to pass up.
Crucially, while FPIs were volatile earlier in the year, Domestic Institutional Investors (DIIs) held the fort, continuing to buy and providing stability to the market.
The IPO Market is on Fire
If you felt like there was a new IPO launching every other day in October, you weren't imagining it. The primary market witnessed a massive surge in activity.
To put it in numbers: Fund mobilisation (through IPOs, FPOs, and Offer for Sale) jumped from ₹13,000 crore in September to a staggering ₹45,000 crore in October 2025.
This isn't just about early investors cashing out. Companies are increasingly raising this money for Capital Expenditure (Capex). This means businesses are borrowing to build, expand, and invest in the future, a strong signal of investment optimism.
The Sector Winners
A rising tide lifts many boats, but some rose higher than others. During the October rally, three sectors outperformed the broader market:
Realty: Real estate stocks surged, likely riding the wave of urbanisation and demand.
Oil & Gas: Benefiting from the stabilisation in global energy dynamics.
Telecom: Continued strength in connectivity and tariff stability.
The October 2025 rally wasn't a fluke. It was backed by the return of foreign investors, a historic boom in the IPO market, and solid corporate earnings. With the India-US trade talks providing a positive backdrop, the Indian economy is showing remarkable resilience even as parts of the global economy face trade stifling.
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