Indian stock markets recorded their biggest single-day gains in seven months on Thursday, November 5, as falling crude oil prices, renewed foreign investor interest and hopes of easing geopolitical tensions lifted investor sentiment.
The BSE Sensex surged 2,009 points, or 2.60%, to close at 79,310, while the NSE Nifty 50 jumped 576 points, or 2.40%, to settle at 24,536.
The rally marked the sixth consecutive session of gains for Indian equities, with both benchmark indices recording their strongest daily performance since April.
The rally extended beyond large-cap stocks, with the Nifty Midcap 100 advancing 2% and the Nifty Smallcap 100 gaining 0.60%.
Automobile stocks led the sectoral gains, with the Nifty Auto index rising 4%. Realty, private banking, cement, public sector banking, information technology and consumer durables also recorded gains exceeding 2%.
Strong buying across sectors reflected improving risk appetite among investors, supported by favourable global developments.
The outcome of the US midterm elections played a significant role in improving market sentiment. Democrats secured majorities in both chambers of Congress, raising expectations of greater scrutiny of President Donald Trump's trade and foreign policies.
Investors are hopeful that the political shift could encourage efforts to de-escalate the conflict involving Iran and reduce uncertainty surrounding US tariffs.
Brent crude remained near a two-month low after plunging nearly 9% in the previous session.
Lower oil prices are particularly beneficial for India, which depends heavily on imported crude. They help ease inflationary pressures, reduce the import bill and improve the country's external financial position.
Foreign portfolio investors have also shown renewed interest in Indian equities, investing more than $3 billion over ten trading sessions through Tuesday.
The reversal comes after a prolonged period of foreign outflows driven by elevated valuations and global uncertainties.
Analysts attributed the market's improved outlook to lower crude prices, easing bond yields, corporate earnings and foreign capital inflows.
However, they caution that the sustainability of the rally will depend on continued foreign buying and tangible progress towards geopolitical stability.
The Nifty has reclaimed its 20-day, 50-day, 100-day and 200-day simple moving averages, indicating improving technical momentum.
One analyst identified 24,775 as the next resistance level, with immediate support at 24,330. Another placed further resistance at 24,800 and 25,000. He identified support around 24,200, followed by 24,000.
However, the Relative Strength Index (RSI), near 75, indicates overbought conditions, suggesting possible profit-booking or short-term consolidation.
For investors, the key indicators to watch are crude oil prices, foreign institutional investment flows and the performance of banking stocks. These factors could determine whether the six-session rally develops into a sustained market uptrend.
