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Below the Quote on Daily Market Commentary for October 5th 2026 by Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd

Indian equities are likely to see some relief after an eight-week losing run that cost the Nifty 8.8%, the longest such streak in since 2020. The correction has left valuations at comfortable levels, with Q2 business updates triggering stock-specific buying, banks and financials making a solid start to the reporting season, while monthly auto sales data has added to the improving tone. The external backdrop has also turned positive. US September payrolls came in at just 29,000 against expectations of 90,000, pulling back expectations of further Fed tightening at the October meeting, and crude has eased as West Asian exports recover and the G7 weighs a coordinated stock release. The RBI interest rate decision and the GST Council meeting on Wednesday are the key monitorable this week. The Monetary Policy Committee began deliberations today, and consensus has converged on a 25bp hike from 5.25%, which would be the first increase since February 2023, driven by crude above USD 100, a rupee past 96 and the weakest monsoon in a decade. Markets started the week on a positive note, with the Nifty closing up 0.6% at 22,556 after four consecutive declining sessions. The Midcap100 gained 0.7% and the Smallcap100 0.5%, a broad but unspectacular recovery. Sectorally, FMCG (+1.8%), Consumer Durables (+1.5%), Media and PSU Banks (+1%) led the gains, while Healthcare (-1%) and Pharma (-0.7%) were the only meaningful drags. Select banks rose up to 5% on Q2 business updates, and FMCG found support from data showing sector value growth at a six-quarter high of 8.6% in Q2FY27, led by a rural surge. Healthcare and Pharma, meanwhile, extended their decline on price-cap concerns after the Supreme Court questioned the gap between hospital procurement costs and the MRP charged to patients, flagging one cancer drug supplied at Rs 2,700 against an MRP of Rs 27,000, and asked the Centre to consider a uniform 16% margin across medicines. Globally, the trajectory of US Treasury yields after the soft payrolls print remains the most important variable for foreign flows, alongside crude and the US-Iran track.

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