Stock Market Rally Today: Why Sensex Jumps 617 Pts, Nifty Climbs 175 Pts On October 29? How Fed Rates Impact?

The Indian stock market witnessed a healthy rally on October 29, 2026, with Sensex and Nifty climbing by 1% each. India's volatility index dropped 4%. With the exception of auto stocks, all other sectoral indices gained heavily with the FMCG index leading the rally. The performance comes after US Federal Reserve's keeps policy rates unchanged despite elevated inflation and heightened geopolitical uncertainty. However, despite the latest comfort from Fed policy, the danger is not over. A potential rate hike in December 2026 policy looms and that could lead to major trigger for bears.

Sensex Performance

At the time of writing, Sensex traded at 73,822.33, higher by 576.30 points or 0.79%. The 30-scrip benchmark is near its intraday high of 73,864.42. Overall, this index has logged up to 617 points gains compared to the previous session.

Top movers for Sensex include Adani Ports in the lead with over 5% gains, followed by Power Grid that surged 4% and Kotak Bank with 3% gains. ETERNAL, ITC, NTPC and Hindustan Unilever surged by 2% to 2.8% as well. Stocks like Titan, Reliance Industries, Infosys, Bajaj Finance and SBI soared by 1% to 1.6% contributing further to the uptrend.

Among top losers included TRENT and Asian Paints that plunged by 1.96% and 1.12% respectively. Tata Steel, HDFC Bank and Maruti Suzuki were also in red.

Nifty Performance

At the time of writing, Nifty climbed by 168.35 points or 0.74% to 22,867.20. The benchmark has rallied as much as 175 points to hit an intraday high of 22,874.15. Majority of indices are in green.

Nifty FMCG index soared 2% followed by Nifty PSU Bank and Nifty IT index that advanced by 1% each. It was only Nifty Auto index that saw selling pressure with nearly 1% drop. Nifty Smallcap index outperformed Nifty Midcap with nearly 1% gains. Midcaps were marginally up.

"Globally, the Fed held rates at 3.75-4.00% via a 10-2 vote (dissenters favoured a hike). This hawkish pause kept the US yield above 5%, though energy and AI infrastructure lifted Wall Street, S&P rose 0.28%, Nasdaq gained 0.27% and Dow Jones edged up 0.19%. Asia is mixed; the Nikkei added 0.30%, while the KOSPI retreated 2.40% after Wednesday's 6.6% surge," said Hemang Gor, Senior Research Analyst - Derivatives & Technical Research, Axis Direct.

The Fed decided to keep rates unchanged to 3.75% to 4% despite elevated inflation. FOMC's policy note said, "Inflation remains elevated. The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee's 2 percent goal. The Committee will deliver price stability."

However, dissent between FOMC policymakers with two of them voting against pause and another rate hike is worrisome. Market is now predicting a 25 basis points hike in December.

Additionally, Hariselvan Radhakrishnan, Founder & CEO of HST Wealth said, the US 10-year Treasury yield consequently moved to around 5.02%. This indicates that the policy pause has not materially loosened global financial conditions; unless yields stabilise below recent levels, dollar assets may continue competing with emerging markets for capital and limit the durability of foreign inflows into India.

On the other hand, Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Investments believes that the Fed's pause is mildly positive for equity market globally. However, from the Indian perspective, the headwinds continue to be strong.

"The 10-year US bond yield continues to hover around 5% and there are no signs of easing of the crude prices. Reports that the chip shortage issue will persist up to 2030 has brought interest back into the chip stocks and AI trade in South Korea and Taiwan. This means that foreign money will continue to chase AI and AI- related stocks, ignoring India," said Vijayakumar.

According to the Geojit expert, there is increasing hope now regarding LTCGs tax relief in the coming Budget. It appears that this is no longer a matter of choice. Capital flight of this magnitude ($31 billion so far in 2026) is impacting India's macros. With crude remaining elevated for long, trade and current account deficits will widen, leading to depreciation of the rupee and the consequent imported inflation.

This will further aggravate the high inflation which will continue rising in the context of the hugely deficient monsoon this year.

YTD, Sensex has crashed 11,387.37 points or 13.4% and Nifty 50 plunged 3,300.55 points or 12.62%.

Overall, for Indian equities, the implications could be significant. As per a note of Karma Capital, a further increase in US interest rates could keep US bond yields and the dollar elevated, putting pressure on emerging-market capital flows and increasing volatility in the Nifty.

Also, high-valuation stocks and segments dependent on foreign portfolio flows could remain particularly sensitive to changes in global liquidity conditions.

But Fed policy outcome is only one critical movers of Indian stock market. The tensions in domestic equities has been alarming.

However, the impact on Indian markets will also depend on domestic earnings growth, valuations and the trajectory of foreign investor flows. Investors should remain selective and focus on companies with strong earnings visibility and balance sheets, while monitoring US inflation data and the Fed's subsequent communication for clues on the future rate trajectory

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