Nifty, Sensex: History favours stock market comeback in October; stocks to watch

October has historically been a volatile month, but has generally favoured the stock market. In the past 10 instances, the Nifty and Sensex ended higher in seven Octobers, data compiled from the Bloomberg database suggests.

All eyes on whether history repeat itself and offer stock investors some relief after the September selloff, in the backdrop of rising bond yields, elevated geopolitical tensions, a depreciating rupee and concerns over foreign flows.

History favours bulls

In October 2025, the NSE barometer Nifty climbed 1,111 points, or 4.51 per cent, taking the 50-share index past the 25,000 level. The index ended the month at 25,722. The Sensex rose 3,671.09 points, or 4.57 per cent, during the same period to end at 83,938. This was accompanied by a 9.83 per cent surge in India VIX, the fear gauge that represents expected market volatility over the next 30 days.

In October 2024, Nifty plunged a massive 1,605 points, or 6.22 per cent. Sensex declined 4,910.72 points, or 5.83 per cent, during the same period, while India VIX spiked 21.6 per cent to 15.5. The October 2024 selling paved the way for another four months of declines in the two equity benchmarks.

In October 2023, Nifty tanked 558.70 points, or 2.84 per cent, while Sensex declined 1,953 points, or 2.97 per cent, during the month. India VIX rose 3.25 per cent over the same period. The monthly fall was followed by 5-8 per cent gains in the two benchmarks in each of the following two months.

October 2022 saw the two indices soaring. Nifty gained 5.37 per cent while Sensex 5.78 per cent. India VIX, meanwhile, plunged 20.68 per cent for the month.

October 2021 was a comparatively dull phase with the two indices rising 0.3 per cent each. India VIX fell 5.3 per cent.

The two indices gained in 2020 and 2019, falling in 2018 while gaining in 2017 and 2016.

Data showed the biggest October rally in the past decade came in 2017, when Sensex jumped 6.17 per cent while Nifty rose 5.59 per cent.

What's ahead?

A broad-based re-rating appears less likely than in previous years, placing greater emphasis on stock selection, said Vinay Paharia, CIO, PGIM India Mutual Fund.

MOFSL said the ongoing market consolidation, alongside continued earnings recovery from FY25 lows, has led to a sustained cooldown in valuations from the highs seen in 2024.

"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," it said.

Stock ideas
MOFSL top Nifty stock ideas included Bharti Airtel, ICICI Bank, SBI, Titan, Adani Enterprises, M&M, Bharat Electronics, Eternal, Hindalco, Shriram Finance, Interglobe Aviation, and Apollo Hospitals.

Its top non-Nifty-50 ideas included 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.