Historically, October has proven to be a favorable month for the Indian stock market, often delivering positive returns despite periods of volatility. Data compiled from the Bloomberg database indicates that in seven out of the past ten instances, both the Nifty and Sensex indices concluded October with gains.
October's Historical Performance
The most recent October in 2025 saw the Nifty climb 4.51 percent, adding 1,111 points to cross the 25,000 mark, closing at 25,722. The Sensex similarly rose 4.57 percent, gaining 3,671.09 points to finish at 83,938. This strong performance was accompanied by a 9.83 percent surge in the India VIX, a measure of expected market volatility.
However, not all Octobers have been bullish. October 2024 witnessed a significant downturn, with Nifty plunging 6.22 percent (1,605 points) and Sensex declining 5.83 percent (4,910.72 points). The India VIX concurrently spiked 21.6 percent. This decline prefaced an additional four months of losses for the equity benchmarks.
October 2023 also saw a dip, with Nifty falling 2.84 percent and Sensex decreasing 2.97 percent. Despite this, the following two months each recorded 5-8 percent gains for both benchmarks. In contrast, October 2022 was a strong period, with Nifty up 5.37 percent and Sensex gaining 5.78 percent, while India VIX dropped 20.68 percent.
The biggest October rally of the past decade occurred in 2017, when Sensex surged 6.17 percent and Nifty rose 5.59 percent. The years 2020, 2019, 2017, and 2016 also saw gains, while 2018 recorded a decline.
Current Market Outlook and Expert Views
As investors look to October 2026, all eyes are on whether this historical trend will repeat, potentially offering relief after a challenging September marked by rising bond yields, elevated geopolitical tensions, a depreciating rupee, and concerns over foreign capital outflows.
Vinay Paharia, CIO of PGIM India Mutual Fund, suggests that a broad-based market re-rating is less probable than in previous years, emphasizing the importance of careful stock selection. Motilal Oswal Financial Services (MOFSL) notes that ongoing market consolidation, coupled with a recovery in earnings from FY25 lows, has led to a cooling of valuations from their 2024 peaks.
“With valuations now significantly below their peaks, earnings growth remaining healthy, and macro environment staying strong, we believe risk-reward has enhanced further for Indian equities. However, given the relatively higher earnings growth in the mid- and small-cap segments, market performance is likely to remain firmly bottom-up,” stated MOFSL.
Stocks to Watch
MOFSL has identified several top stock ideas for investors:
- Nifty Stock Ideas: Bharti Airtel, ICICI Bank, SBI, Titan, Adani Enterprises, M&M, Bharat Electronics, Eternal, Hindalco, Shriram Finance, Interglobe Aviation, and Apollo Hospitals.
- Non-Nifty-50 Ideas: TVS Motor, BSE, SBI Funds Management, GE Vernova T&D, Lenskart Solutions, Indian Hotels, Meesho, Dixon Tech, Coforge, Radico Khaitan, Kirloskar Oil Engines, RBL Bank, Physicswallah, and Inventurus Knowledge Solutions.
Disclaimer: This information is for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.