Indian stock markets delivered a spectacular pre-Diwali rally in the first week of November, reversing months of uncertainty and pushing benchmark indices to their strongest weekly performance in years.
The Nifty 50 surged 8.58% during November 2–6, its biggest weekly percentage gain in nearly six years, while the Sensex climbed almost 9%. The rally, which continued for seven consecutive trading sessions, added nearly ₹28 lakh crore to the market capitalisation of BSE-listed companies.
The rebound came despite weakness in global equities following the US midterm elections. Strong foreign institutional investor (FII) inflows, easing crude oil prices, improving corporate earnings and a recovery in the rupee helped Indian stocks outperform several international markets.
Nifty 50: Jumped 8.58%, gaining nearly 1,978 points during the week.
Sensex: Advanced almost 9%, closing above 81,000.
Investor wealth: BSE market capitalisation increased by nearly ₹28 lakh crore to around ₹503 lakh-crore.
Reliance Industries: Shares surged more than 13% during the week.
Shriram Finance: Gained nearly 17%, emerging as one of the biggest winners.
Foreign investment: FIIs invested around ₹31,000 crore between Monday and Thursday.
Crude oil: Brent prices declined nearly 16% to around $98 per barrel.
Winning streak: Indian benchmarks extended their gains to seven consecutive sessions.
The final trading session of the week delivered another major boost to investors. On Friday, November 6, the Sensex climbed 1,718 points, or 2.17%, to close at 81,028. The Nifty gained 493.75 points, or 2.01%, to settle at 25,030, reclaiming the psychologically important 25,000 level.
The Nifty's weekly advance of nearly 1,978 points was also its largest absolute weekly gain on record.
The combined market capitalisation of BSE-listed companies rose from approximately ₹475.34 lakh-crore to ₹503 lakh crore, reflecting the scale of the recovery.
Financial services, automobiles and heavyweight stocks were among the major beneficiaries. Shriram Finance led the gains with an increase of nearly 17%. Bajaj Finance and Mahindra & Mahindra rose more than 15% each, while HDFC Bank advanced around 14%. Reliance Industries, one of India's most influential index constituents, gained over 13%.
The US midterm election results played an important role in changing global market sentiment. Democratic gains raised expectations of tighter regulatory oversight of technology companies, particularly those involved in artificial intelligence and data centre development.
Concerns that increased scrutiny could slow AI infrastructure investment triggered selling in technology-related stocks.
US equities reportedly lost around $2.5 trillion in market value during Thursday's sell-off, while several Asian markets exposed to the semiconductor and AI supply chains also came under pressure.
Indian equities, however, moved in the opposite direction. The shift encouraged investors to reassess expensive technology-linked markets and consider alternative investment opportunities.
India's improving corporate earnings, relatively attractive domestic growth prospects and renewed foreign buying helped support this change in sentiment.
Another important driver was the sharp decline in international crude oil prices. Brent crude reportedly fell nearly 16% during the week to approximately $98 per barrel as concerns about disruptions to Middle Eastern oil supplies eased.
For India, which imports roughly 85% of its crude oil requirements, lower prices can provide significant economic relief.
Cheaper crude reduces the country's import bill, eases pressure on inflation and supports the rupee. Diplomatic efforts involving the US, Qatar and Iran also raised hopes of a possible reduction in regional tensions.
However, uncertainty surrounding sanctions, maritime restrictions and the Strait of Hormuz remains a significant risk to oil supplies.
Renewed foreign institutional investment was among the strongest signals supporting the recovery. FIIs purchased approximately ₹31,000 crore worth of Indian equities through the NSE between Monday and Thursday.
Thursday alone witnessed nearly ₹15,000 crore in foreign buying, the largest single-day purchase in more than a year, according to provisional exchange data.
It is estimated that foreign investors had purchased equities worth ₹35,781 crore over five trading sessions. The inflows marked a notable reversal after substantial foreign investor selling during September and October.
The rupee also strengthened by approximately 0.5%, supported by improving capital flows.
Domestic institutional investors, meanwhile, booked profits during the rally, indicating that local institutions were taking advantage of the sharp price recovery.
Improving September-quarter corporate earnings also helped restore investor confidence. Results for the second quarter of FY27 provided support for several large companies, particularly in financial services and consumption-related sectors.
Better earnings expectations, combined with foreign inflows, helped investors look beyond earlier concerns surrounding geopolitical tensions, currency weakness and elevated energy prices.
The market's ability to advance despite global volatility also highlighted the renewed appeal of Indian equities.
The immediate focus now shifts to whether the Nifty can sustain its gains after such a sharp advance. One analyst identified 24,500 as an important level for maintaining positive momentum. Sustained strength above this level could support a further move towards the 25,200–25,500 range.
However, after seven consecutive sessions of gains, profit-booking and short-term consolidation remain possible.
Investors will closely monitor three major developments:
Whether foreign institutional buying continues.
Whether crude oil prices remain relatively stable.
Whether corporate earnings growth justifies higher stock valuations.
Global market developments and movements in the rupee will also remain important.
Attention now turns to the special Diwali Muhurat trading session scheduled for Sunday, November 8, from 2:20 pm to 3:30 pm, marking the beginning of Samvat 2083.
While the pre-Diwali rally has significantly improved sentiment, the next phase of market performance will depend on the sustainability of foreign investment, earnings growth and global economic conditions.
