Sensex and Nifty Rebound as Softer US Jobs Data Eases Fed Hike Fears

The Quick Take

• Sensex and Nifty closed meaningfully higher on Monday after US jobs data miss
• Softer US payrolls reduced October Fed rate hike probability, lifting risk appetite
• Defensive sectors and IT exporters benefitted from dollar softness
• Foreign institutional investors turned net buyers on reduced global rate risk
• Advance-decline ratio positive; mid-cap and small-cap indices outperformed

Synthesized from 1 source — full coverage, sentiment breakdown, and forward signals below.

Indian benchmark indices staged a broad recovery on Monday after US non-farm payroll data came in below consensus expectations. The miss materially trimmed Federal Reserve rate hike probabilities for October, easing pressure on emerging-market equities that had been under stress from a hawkish global rate narrative. The Sensex and Nifty both closed with solid gains, led by financials and IT exporters that benefit from a softer US dollar.

The macro read-through is meaningful for Indian equities: a dovish Fed pivot reduces the opportunity cost of holding rupee-denominated assets and limits capital outflow pressure. FII data showed a swing back to net buying on Monday, reversing weeks of cautious positioning. This dynamic particularly supports banking names that had been pricing in tighter global liquidity, and mid-cap industrials dependent on overseas capital markets for project financing.

Traders will watch whether the Monday bounce is sustained or merely a technical relief rally. The RBI's October 7 rate decision looms as the next key domestic catalyst. If the central bank hikes 25bp as expected but signals a conditional pause thereafter, markets may interpret the combination of a less hawkish Fed and a terminal RBI as a green light for a year-end equity re-rating.