Indian stock markets staged a strong rally on Thursday, October 29, with the Sensex climbing more than 900 points to close at 74,151 and the Nifty rising over 1% to settle at 22,936.75. The gains came amid improved investor sentiment, with buying spreading across sectors and extending to mid-cap and small-cap stocks.

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Five key factors supported the market's recovery.

1. Stronger rupee supports sentiment

The rupee opened higher against the US dollar, offering some relief to investors. A stronger currency can help reduce the cost of imports, particularly crude oil, and influence foreign investors' returns from Indian equities.

2. Crude oil prices ease slightly

Brent crude prices edged lower but remained elevated at around $114–$115 per barrel. The modest decline offered some relief to India, a major oil importer, although supply disruption risks in West Asia continued to concern investors.

3. US Federal Reserve holds rates steady

The US Federal Reserve kept its benchmark interest rate unchanged at 3.75%–4%. The decision eased immediate concerns about further rate increases, although inflation, global bond yields and the dollar's direction remained important factors for emerging markets.

4. Corporate earnings encourage buying

Positive earnings from select companies supported buying in real estate, fast-moving consumer goods and banking stocks. Investors showed interest in businesses with resilient financial performance, helping the benchmark indices advance.

5. Mid-cap and small-cap stocks join the rally

The recovery extended beyond the Sensex and Nifty, indicating broader participation after a recent period of market consolidation. The Nifty also crossed its 20-day exponential moving average near 22,825, strengthening short-term sentiment.

Market analysts said sustained buying would be necessary to confirm a more durable recovery. The Nifty could move towards 23,100–23,300 if momentum continues, while 22,500–22,700 may provide near-term support. Elevated oil prices and global uncertainty remain key risks for investors.