Indian Markets Snap 3-Day Losing Streak: IT Stocks Lead Rally as Volatility Cools

Indian equity markets finally caught a break on Monday, November 10, 2025, snapping a three-day losing streak as technology stocks led a broad-based recovery and foreign institutional investors returned to the buying side after days of selling pressure.

The BSE Sensex closed at 83,535.35, gaining 319.07 points or 0.38 percent, while the NSE Nifty 50 settled at 25,574.30, up 82.00 points or 0.32 percent. The rally came despite mixed global cues and ongoing uncertainty around the US government shutdown, which appeared closer to resolution as the Senate advanced a spending bill.

More importantly for traders, the India VIX—the market’s fear gauge—dropped 2.07 percent to close at 12.30, signaling cooling volatility after weeks of nervous trading. This decline in volatility, combined with strong institutional buying, set the stage for Monday’s rebound.

IT Stocks Break Six-Day Slump, Lead Market Recovery

The Nifty IT index emerged as the star performer, surging 1.6 percent to snap a six-session losing streak. The rally was broad-based across the sector, with major players posting solid gains as investors bet on improving global demand and a potential end to the prolonged US government shutdown.

Infosys led the charge with a 3 percent jump to Rs 1,519.70, driven by news that the company had fixed November 14, 2025, as the record date for its massive Rs 18,000 crore share buyback—the largest in the company’s history. At a buyback price of Rs 1,800 per share, representing a 23 percent premium to recent trading levels, the announcement triggered strong buying interest from retail and institutional investors alike.

HCL Technologies, Wipro, LTIMindtree, and Mphasis each gained around 2 percent, while TCS, Coforge, Tech Mahindra, and Persistent Systems added over 1 percent. The sector’s recovery came after nearly three weeks of subdued performance, as concerns over weak discretionary spending and AI disruption had weighed on valuations.

Analysts attribute the IT rally to multiple factors. According to Kotak Institutional Equities, Q2FY26 results indicated that demand trends are stabilizing, with fewer program cancellations and easing headwinds across select sectors. Deal momentum remains steady, skewed towards cost optimization, while AI adoption is accelerating with vendors announcing clear strategies.

The brokerage noted that mid-tier IT players stand out for better incentive alignment to capture the AI wave. Margin performance also surprised positively in Q2, partly due to rupee depreciation of 3 percent during the quarter. Most companies beat margin estimates by 30-90 basis points, though underlying pressure points remain as efficiency levers appear largely exhausted after nearly three years of subdued demand.

The improving sentiment around a potential resolution to the US government shutdown also boosted IT stocks. The US Senate moved forward on Sunday with a bipartisan spending agreement to end the 40-day shutdown, the longest in American history. Eight Democratic senators broke ranks to vote with Republicans 60-40, advancing legislation that could reopen federal agencies by midweek. For Indian IT firms, which derive significant revenue from US government contracts and federal clients, this development reduced near-term uncertainty.

Nykaa’s Stunning 243% Profit Jump Steals the Show

While the IT sector grabbed headlines, the day’s most spectacular corporate story belonged to FSN E-Commerce Ventures, the parent company of beauty and fashion retailer Nykaa. The stock surged over 6 percent after the company reported a jaw-dropping 243 percent year-on-year jump in Q2FY26 net profit.

Nykaa’s consolidated net profit soared to Rs 34.43 crore in the September quarter, compared to just Rs 10.04 crore in the same period last year. Revenue from operations grew a robust 25 percent year-on-year to Rs 2,346 crore, driven by strong performance across both beauty and fashion categories.

The company’s EBITDA jumped 53 percent to Rs 159 crore, marking its highest EBITDA since listing. EBITDA margin expanded by 125 basis points to 6.8 percent from 5.5 percent in Q2FY25, while profit after tax (PAT) margin improved to 1.4 percent from 0.7 percent.

Perhaps most impressively, Nykaa achieved a 12-quarter high gross margin of 50 percent, reflecting successful premiumization efforts and improved inventory management. The company added 19 new stores across eight cities during the quarter, expanding its total retail footprint to over 2.7 lakh square feet.

Analysts were quick to upgrade their ratings and price targets. CLSA raised its target price to Rs 298 with an Outperform rating, highlighting 25 percent revenue growth and 125 basis point margin improvement. The brokerage noted stronger profitability across verticals, with beauty net sales value up 27 percent and fashion margins expanding 550 basis points year-on-year.

Nuvama maintained its Buy rating and raised the target price from Rs 235 to Rs 285, citing stronger long-term growth prospects. The firm praised Nykaa’s ability to drive growth while improving profitability in the competitive e-commerce sector.

The results demonstrate that Nykaa is successfully navigating the challenging retail landscape by focusing on premiumization, omnichannel expansion, and operational efficiency. The company’s acceleration in brand launches, particularly across Luxury and Korean Beauty segments, alongside physical store expansion, is strengthening its competitive moat in India’s fast-growing beauty and personal care market.

NALCO Surges 9% on Strong Q2 Earnings and Dividend Announcement

State-run National Aluminium Company (NALCO) emerged as another standout performer, with shares jumping as much as 8.7 percent to Rs 254.95 during intraday trading, settling with solid gains. The rally extended the stock’s two-day surge to over 10 percent.

NALCO reported a sharp 35-37 percent year-on-year jump in Q2FY26 net profit to Rs 1,430 crore, up from Rs 1,046 crore in the same period last year. The improvement was driven by higher realisations, improved operational efficiency, and better cost control despite lower sales realization from metal prices.

Revenue from operations rose 7.2 percent to Rs 4,292 crore from Rs 4,001 crore a year earlier. EBITDA stood at Rs 1,933 crore, marking a 24.8 percent rise from a year ago. Operating margins expanded significantly to 45 percent from 38.7 percent, underscoring stronger pricing power and cost discipline.

On the production front, NALCO achieved record output levels. Alumina Hydrate production touched 11.53 lakh metric tonnes—the highest ever for the first half of any fiscal year. Aluminium Cast Metal output reached 2.34 lakh metric tonnes, another record. Alumina sales were strong at 6.99 lakh metric tonnes, crossing the previous best of 6.56 lakh metric tonnes from FY 2013-14.

The board approved an interim dividend of Rs 4 per equity share, equivalent to 80 percent of the Rs 5 face value, for FY2026. The total payout amounts to Rs 734.65 crore, rewarding shareholders handsomely.

Looking ahead, NALCO’s management expects London Metal Exchange aluminium prices to average around $2,670 per tonne in calendar year 2026. The company’s alumina refinery expansion project is progressing as planned, with capacity set to increase by 1 million tonnes per annum to a total of 3.1 million tonnes per annum, likely to be commissioned by June 2026.

CMD Brijendra Pratap Singh stated, “We have demonstrated resilience through operational excellence, cost-saving measures, and sustained productivity, supported by higher volumes and improved efficiency, despite lower sales realization from metal prices. Going forward, we remain focused on value addition, sustainability, and expanding our production capacities to ensure long-term growth and value creation for all stakeholders.”

The stock has gained nearly 18 percent in 2025 so far and is up 60 percent over the past six months, reflecting strong investor confidence in the PSU metal producer’s growth trajectory.

Trent Takes a Hit on Large Block Deal

Not all stocks participated in Monday’s rally. Trent, the Tata Group’s retail chain operating Westside and the popular value fashion brand Zudio, plummeted 7.5 percent to emerge as the day’s biggest loser on both the Sensex and Nifty.

The sharp fall came after a significant block deal on the NSE involving 3.02 lakh shares at Rs 4,278 per share, totaling Rs 129.40 crore. Such large block trades often indicate institutional investors or promoters offloading stakes, which can trigger selling pressure and raise concerns about future performance.

The stock’s decline stood in stark contrast to other Tata Group companies. Titan, another Tata consumer play, featured among the day’s top gainers, highlighting that the selling pressure was specific to Trent rather than broader concerns about the retail sector or the Tata conglomerate.

Trent has been one of the market’s star performers over the past five years, delivering a staggering 513 percent return. However, in recent months, the stock has faced headwinds, falling 33.90 percent over the past year and declining 21.27 percent over six months. The stock is down 8.68 percent over the past month alone.

Despite the recent weakness, Trent’s fundamentals remain solid. The company reported total income from operations of Rs 4,843.27 crore and net profit after tax of Rs 450.77 crore on a standalone basis in its latest results. The block deal may simply represent portfolio rebalancing by large institutional holders rather than any fundamental concerns about the business.

FIIs Return to Buying Mode, DIIs Continue Support

A crucial positive for Monday’s rally was the return of foreign institutional investors (FIIs) to the buying side after six consecutive sessions of selling. According to the latest available data from November 7, 2025, FIIs bought equities worth Rs 4,581.34 crore on a net basis, purchasing shares worth Rs 18,485.25 crore and selling Rs 13,903.91 crore.

Domestic institutional investors (DIIs) continued their strong support for the market, extending their buying streak to 11 consecutive sessions. DIIs bought equities worth Rs 6,674.77 crore on a net basis on November 7, purchasing Rs 19,470.01 crore worth of shares and selling Rs 12,795.24 crore.

The sustained DII buying and the return of FII flows provided crucial support to the market, helping it overcome negative global cues and domestic uncertainties. For November 2025 month-to-date, FIIs have been net sellers of Rs 5,747.51 crore, but DIIs have more than offset this with net buying of Rs 22,483.20 crore.

The divergence between FII and DII flows has been a defining feature of Indian markets in 2025. While foreign investors have turned cautious due to elevated valuations and global uncertainty, domestic institutional investors—backed by strong mutual fund inflows and insurance premiums—have provided a solid floor for the market.

Broader Market Shows Mixed Performance

Beyond the headline indices, the broader market showed mixed signals. The BSE Midcap index rose 0.6 percent, outperforming the Sensex, while the BSE Smallcap index declined 0.4 percent, suggesting some profit-booking in the smaller-cap segment.

Sectoral performance was largely positive. Apart from the IT index’s 1.6 percent surge, the Nifty Pharma index gained nearly 1 percent, and the Nifty Metal index added 0.6 percent. The only sectoral loser was the Nifty Media index, which fell 1 percent.

Among individual stocks outside the headline movers, Asian Paints, L&T, Hindalco, Jio Financial Services, and Reliance Industries featured among major Nifty gainers. On the losing side, apart from Trent, Apollo Hospitals, Max Healthcare, Maruti Suzuki, and Dr. Reddy’s Labs declined.

The day also saw notable corporate action. Lenskart Solutions made its stock market debut, listing at Rs 395 on the NSE, representing a modest 1.7 percent discount to its IPO price of Rs 402. The eyewear retailer’s Rs 7,278 crore IPO had received strong investor demand, but the muted listing reflected caution around new-age companies amid volatile market conditions.

WeWork India Management reported a sharp drop in Q2FY26 net profit to Rs 6.4 crore from Rs 203.74 crore a year ago, though this was largely due to a high base effect from a deferred tax credit in the previous year. Revenue grew 17 percent to Rs 585 crore, and the company posted its first IndAS PAT-positive quarter, demonstrating operational progress in the flexible workspace segment.

Market breadth was mixed. About 1,787 shares advanced, 2,183 shares declined, and 132 shares remained unchanged on the NSE. The advance-decline ratio of 0.82 suggests that while the indices recovered, underlying market sentiment remained cautious with more stocks declining than advancing.

What to Watch Next

As markets head into the remainder of November, several key factors will drive direction:

Bihar Election Results (November 14): The second phase of Bihar assembly elections concludes on November 11, with results scheduled for November 14. The outcome could impact market sentiment, particularly if there’s a surprise result. Historically, state election outcomes in politically significant states like Bihar have triggered short-term volatility.

Q2 Earnings Season Continues: More companies are scheduled to report Q2FY26 results this week. Investors will closely watch earnings quality, management commentary on demand trends, and forward guidance. Key results from banking, FMCG, and infrastructure sectors could provide further clarity on the economic recovery.

Inflation Data (November 12-14): Consumer Price Index (CPI) data is due on November 12, followed by M3 money supply data and Wholesale Price Index (WPI) on November 14. These macro indicators will be crucial for understanding inflation trends and potential RBI policy moves in the December monetary policy meeting.

US Government Shutdown Resolution: While the Senate has advanced legislation to end the shutdown, it still needs House approval and President Trump’s signature. Any delay or complication could trigger risk-off sentiment globally, impacting emerging markets including India.

Infosys Buyback Record Date (November 14): With the record date approaching, trading activity in Infosys shares could intensify. Shareholders hoping to participate in the Rs 18,000 crore buyback need to hold shares by November 14, which could support the stock in the near term.

Technical Levels: For the Nifty, key resistance levels are placed at 25,600-25,700, with a decisive breakout above 25,800 potentially opening the path toward 26,000-26,200. On the downside, support is placed at 25,400 and 25,300. For the Sensex, resistance is at 83,600-83,850, while support lies at 83,250-83,000.

IPO Activity: The primary market remains busy with five IPOs, including PhysicsWallah and Tenneco, collectively seeking over Rs 10,000 crore this week. Heavy IPO activity can absorb liquidity from the secondary market, potentially limiting upside in the near term.

FII Flow Trends: After returning to buying on November 7, whether FIIs continue their purchases or resume selling will be crucial. Any sustained FII buying could trigger a sharper rally, while renewed selling could cap gains despite strong DII support.

Global Cues: Asian markets were mixed to positive on Monday, with Japan’s Nikkei rising 0.9 percent, South Korea’s KOSPI up 2.5 percent, and Hong Kong’s Hang Seng gaining 0.33 percent. US futures indicated a positive opening. Sustained strength in global markets, particularly in US tech stocks, would support Indian IT stocks and broader indices.

The combination of cooling volatility, FII return, strong Q2 results from select companies, and progress toward ending the US government shutdown has created a constructive setup for Indian markets. However, elevated valuations, mixed earnings quality across sectors, and global uncertainty suggest that any rally will likely be gradual rather than explosive.

For retail investors, the current environment favors selective stock picking based on strong fundamentals and reasonable valuations over broad market bets. Companies demonstrating pricing power, margin expansion, and consistent execution—like Nykaa and NALCO in Monday’s session—are likely to outperform in this environment.

The next few trading sessions will be crucial in determining whether Monday’s rebound marks the beginning of a sustained recovery or merely a technical bounce within an ongoing correction. With multiple events lined up over the coming week, volatility is likely to persist, and traders should remain nimble while keeping risk management at the forefront.

Disclaimer: This article is only for information purposes and is not investment advice. Before investing, do your own research.