India consumer discretionary stocks are drawing bullish bets as the festive season ramps up, with the MSCI India Consumer Discretionary Index up more than 3% this quarter compared to a 1.5% drop in the broader market. The rally comes as investors anticipate stronger seasonal demand ahead of Diwali, the Hindu festival of lights falling in early November, traditionally an auspicious time for big-ticket purchases. Companies are ramping up production and offering discounts to capitalize on the trend.

Meanwhile, India's interbank borrowing costs have climbed back toward the central bank's policy rate for the first time in over six weeks as surplus banking liquidity shrank to 4.9 trillion rupees from a record 11 trillion rupees earlier this month. Much of the drop reflects tax payments and the RBI's recent liquidity-draining operations, though analysts say full normalization could take about a year.

In corporate news, Tata Group firms remain in focus amid an intensifying leadership battle involving Noel Tata and Tata Sons Chairman Natarajan Chandrasekaran. Adani stocks may also see action after settling a SEBI probe linked to Hindenburg Research allegations. On the IPO front, private-sector issuers like Hyundai India paid higher banking fees at 1.77% compared to state-owned firms like Life Insurance Corp. of India at 0.58%.