Diwali bonanza: Investors get Rs 6.9 L cr richer - top reasons behind stock market rally

Stock market today: Dalal Street brought an early Diwali bonanza for investors on Thursday, with Sensex soaring over 1,600 points and Nifty50 gaining 2% in early trade. The rally added over Rs 6.9 lakh crore to investors' wealth, as easing crude oil prices, renewed foreign investor buying and improving global sentiment following the US midterm election results lifted market mood.

The 30-share BSE Sensex surged 1,609.54 points, or 2.08%, to 78,910.94, while NSE Nifty50 advanced 417.45 points, or 1.74%, to settle at 24,378.05. Dalal Street extended its winning streak to six consecutive sessions on Thursday, building on Wednesday's gains when the Sensex climbed nearly 384 points to close at 77,301, its highest level in more than two months. The Nifty also advanced 150 points to settle at 23,961. The five-session rally through Wednesday had already lifted Sensex by over 4,000 points, or 5%. Ponmudi R, CEO of Enrich Money, told ANI, "The sharp advance reflects improving global risk sentiment, supported by lower crude prices and renewed institutional buying." Here are the top reasons behind market rally:

1. Crude oil prices slide below $95

Falling crude oil prices remained one of the biggest factors supporting domestic equities on Thursday. Brent crude, the global oil benchmark, slipped below $95 per barrel, while US West Texas Intermediate (WTI) crude fell below $90. Brent crude futures declined 50 cents, or 0.53%, to $94.12 per barrel, while WTI crude fell 61 cents, or 0.69%, to $87.51. The latest decline followed a sharp sell-off on Wednesday, when both benchmarks lost more than 8% and settled at their lowest levels in over two months. Brent ended the session at $94.62 per barrel, shedding $8.98, or 8.7%, while The decline in oil prices offered relief to India, as the economy is dependent on oil imports, and supported sentiment in domestic equities.

2. US midterm election results improve global sentiment

The outcome of the November 2026 US midterm elections also contributed to the positive mood across markets. The Democratic Party won control of both the Senate and the House of Representatives, dealing a significant political setback to US President Donald Trump's administration. The election outcome raised expectations that Trump could face greater pressure to bring the US-Israeli war with Iran to an end. With Democrats taking control of both chambers of Congress, the US President could also find it harder to pursue further military action. Hopes of an end to the conflict supported the decline in crude oil prices and improved global risk sentiment. Vinod Nair, head of research, Geojit Investments Limited, told ANI, "The US midterm outcome improved global sentiment, raising expectations of a more measured approach to trade and tariff policies and potentially supporting FII flows into emerging markets,"

3. Foreign investors return to Dalal Street

Renewed buying by foreign institutional investors (FIIs) provided another boost to domestic markets. Provisional data showed that foreign investors bought Indian shares worth Rs 72.84 billion ($769.65 million) on Wednesday, marking their fourth consecutive session of buying. Foreign investors also infused around Rs 17,235 crore into Indian equities in just three trading sessions in November, indicating a return of overseas institutional buying. The renewed inflows come against the backdrop of concerns over foreign investors' sustained exit from Indian markets. India's long-term capital gains (LTCG) tax has emerged as a pressing concern for investors, with the country's taxation regime being closely linked to the ongoing flight of foreign capital. India stands out internationally for taxing capital gains in the same country where the profits are generated. Reports suggest that most major stock markets globally either do not levy such a tax or tax the gains in the investor's home country. Commenting on the return of foreign investors, Ponmudi added, "Foreign institutional investors have returned as significant buyers, the revival in overseas fund flows marks an encouraging development for domestic equities, particularly as sustained institutional participation could lend greater depth to the ongoing market recovery."

4. Rupee touches two-week high

Rupee also extended its gains against the US dollar, opening at a two-week high of 94.35 per dollar on Thursday, up 0.3% from its previous close. The currency rose 14 paise to 94.32 against the US dollar in early trade, after closing at 95.64 on Wednesday, marginally stronger than its previous close of 95.75. This marked the fifth consecutive session of gains for the currency. Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, was trading at 101.18, down 0.53%.

5. Broader markets and banking stocks join the rally

Thursday's rally was broad-based, with buying seen across market segments, sectors and heavyweight stocks. Fourteen of the 16 major sectors ended in positive territory, while the broader mid-cap and small-cap indices also gained over 1% each. The Nifty Midcap 100 advanced 1.46%, while the Nifty Smallcap 100 rose 1.49%. The Nifty 100 also climbed 1.78%, reflecting the wider market rally. Among sectoral indices, Nifty Private Bank led the gains, rising 2.55%, followed by Nifty Realty at 1.92%. Nifty IT advanced 1.72%, Nifty Auto gained 1.66%, Nifty Consumer Durables rose 1.52% and Nifty Media climbed 1.36%. Nifty FMCG also ended 1.08% higher. On the Sensex, Bajaj Finance jumped 5.33%. Maruti Suzuki followed with a 4.94% rise, while InterGlobe Aviation (IndiGo) gained 4.88%. Asian Paints advanced 4.39%, M&M rose 3.89% and Infosys climbed 3.67%. Other notable gainers included Tech Mahindra (3.35%), HCL Technologies (3.13%), UltraTech Cement (2.88%), TCS (2.87%), ICICI Bank (2.81%) and Bajaj Finserv (2.63%). The latest gains extend the momentum seen over the previous week. Earlier on Wednesday, Sensex climbed 383.55 points, or 0.50%, to close at 77,301.40, its highest closing level in more than two months. NSE Nifty50 advanced 149.75 points, or 0.63%, to settle at 23,960.60. Among Sensex constituents, Bharat Electronics, Titan, InterGlobe Aviation, Bajaj Finance, ITC and Adani Ports were the biggest gainers, while TCS, HCL Tech, Infosys and Eternal featured among the laggards. However, Ponmudi cautioned that sustaining the gains beyond the initial trading hours would be key to determining whether the rally could develop into a broader market recovery. He also noted that the sharp correction in crude oil prices offered some much-needed relief to India as an oil-import-dependent economy.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)