The Sensex and the Nifty 50 ended Tuesday, 27 October, almost exactly where they began, with the Sensex at 73,598.67, down 0.01 percent, and the Nifty at 22,749.75, down 0.02 percent, according to Kotak Neo's closing report. The surface calm hid a split below the headline indices. The Nifty Midcap 100 rose 1 percent and the Nifty Smallcap 100 rose 2.69 percent, while the Nifty Media index gained 3.66 percent, Nifty Pharma 1.91 percent and Nifty Auto 1.48 percent. Nifty IT fell 0.26 percent and Nifty Bank, according to other closing reports, fell about 0.72 percent. It was also the expiry day for October futures and options contracts, and traders were waiting for the US Federal Reserve's policy decision.
The argument that the market has turned rests on the recovery since the low and on the breadth of Tuesday's trading. Kotak Neo's weekly recap showed that the Nifty and the Sensex ended an eight-week losing streak, the longest in about 25 years, closing the week at 22,520.45 and 72,472.33. Tuesday's closes are 1.0 percent and 1.6 percent above those levels. A rise of 2.69 percent in smallcaps on a flat day suggests that buyers are returning to the riskier part of the market, and crude oil fell during the session on hopes that the war involving the United States, Israel and Iran could move towards a resolution. Brent for December delivery traded at $110.95 a barrel around 3.36 pm.
The argument that the recovery is fragile begins with the heavyweights. Banks and information technology, which carry the most weight in both indices, fell on Tuesday, and Brent crude at $110.95 was still near a six-month high, with fresh attacks on Saudi Arabia keeping supply fears alive. The Sensex closed about 1.5 percent below its close of 74,729.27 on 16 October, and the Nifty about 1.7 percent below its 23,146 level that day. Foreign investors have sold a record $27.8 billion of Indian equities in 2026, according to The Week, and Ventura Research said the Nifty was down about 13.9 percent for the year to 9 October. The Reserve Bank has also begun raising interest rates. Tata Consumer Products, Bharti Airtel, Bajaj Auto, BSE Ltd and Trent were among the Nifty 50's gainers on Tuesday, while Asian Paints, Coal India, Grasim Industries, State Bank of India and Tata Consultancy Services were among the losers, according to Kotak Neo. The Reserve Bank also infused funds into banks to ease a liquidity squeeze, and higher crude prices are pressuring government bond yields.
The direction of the market matters well beyond traders. Millions of households own shares through mutual funds and pension schemes, and a weak market makes it harder for companies to raise money, as the listing of Jio Platforms on 28 October shows. Oil is the link between the war and the rupee, inflation and the current account, so each move in Brent feeds into Indian valuations. If foreign selling slows and crude eases, the broad gains in midcaps and smallcaps could spread to the large companies that decide the benchmarks.
Tuesday's flat close shows a market that has stopped falling but has not yet shown that it can climb. Oil and foreign flows will decide the next move.