Indian markets continue rally; Nifty and Sensex close 2% up as rupee strengths

Benchmark Indian indices Nifty 50 and BSE Sensex extended their rally and ended 2% higher compared to their previous close. The Sensex ended 1533 points up at 74,315 while the Nifty 50 closed at 22,997, up 374.65 points or 1.6%.

The Indian stock market continued its 3-day rally, defying other Asian markets dragged down by speculation around AI stocks and concerns about U.S. inflation and a potential interest rate hike by the U.S. Federal Reserve.

“The AI deceleration in stocks globally, positive corporate earnings especially in banking so far, and an anticipation for further hike by Fed has turned out to be a blessing in disguise for Indian markets,” V. K. Vijayakumar, chief investment strategist at Geojit Investments said. 

However, analysts added that unless the Iran-U.S. conflict remains unresolved and crude continues to trade above $100 per barrel, a sustained rally for the stock market may be unlikely. 

Weaker dollar index and fall in crude support rupee

The Indian rupee also strengthened for the fourth consecutive trading day following measures from the Reserve Bank of India, a weaker dollar index and a fall in crude oil prices. The rupee closed at 95.5 against the greenback, up 0.1%. The domestic currency has risen 2% so far this week.

The dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 102.10, down 0.4% driven by a decline in U.S. treasury yields alongside worries over a further rate hike by the U.S. Federal Reserve this month. 

Global crude prices also traded lower on Thursday (October 15, 2026). The benchmark Brent crude was trading at $103.78 per barrel, down 2% from the previous close, following expectations of higher oil supplies if the U.S. eases sanctions on certain tanker operations. 

“For the rupee, the key near-term influences remain RBI intervention, importer dollar demand, foreign portfolio flows and crude oil prices. We expect flows from the Jio IPO to hit the market from tomorrow or Monday, while the Fairfax deal will also bring in about $6-7 billion of flows, taking the rupee to the upward territory of 94-94.50,” Anil Kumar Bhansali, head of treasury, Finrex Treasury Advisors LLP, said in a note.