Indian stock markets witnessed a sharp rally on Thursday, November 5, with benchmark indices Sensex and Nifty surging amid a steep decline in global crude oil prices and positive cues from international markets.
The BSE Sensex jumped nearly 1,400 points, while the NSE Nifty 50 crossed the 24,400 mark during intraday trading, reclaiming the crucial 24,000 level for the first time since September 4.
The rally was driven by falling crude oil prices after the Democrats secured victories in both chambers of the US Congress in the midterm elections. Investors are betting that the electoral setback for US President Donald Trump could increase pressure on his administration to bring an end to the US-Israeli war on Iran, potentially easing geopolitical tensions and concerns over global oil supplies.
At the opening bell, the Sensex gained around 1,300 points, while the Nifty advanced more than 350 points. During the session, the Nifty 50 climbed as much as 2.01% to 24,442.20.
Crude oil prices fall below $95 per barrel
A sharp decline in international crude oil prices emerged as one of the biggest triggers behind Thursday’s market rally.
Brent crude futures plunged 8.7% to $94.62 per barrel, while US West Texas Intermediate (WTI) crude fell 8.3% to $88.12 per barrel. The decline followed growing optimism that the US midterm election results could improve prospects for a diplomatic resolution to the Iran conflict.
Lower crude oil prices are particularly positive for India, which depends heavily on imports to meet its energy requirements. A sustained decline in oil prices could ease inflationary pressures, reduce the country’s import bill and improve the earnings outlook for several domestic companies.
Rupee strengthens against US dollar
The Indian rupee also strengthened against the US dollar, supported by falling crude oil prices and improving investor sentiment.
The domestic currency appreciated 29 paise to 94.36 against the US dollar compared with Wednesday’s closing level of 94.65.
Shriram Finance, IndiGo and Asian Paints lead gains
Buying interest was visible across sectors, with several heavyweight stocks witnessing strong gains.
Shriram Finance, InterGlobe Aviation (IndiGo) and Asian Paints emerged as the top gainers on the Nifty 50 index.
The broader markets also participated in the rally, with the Nifty Midcap 100 rising 1.17% and the Nifty Smallcap 100 advancing 1.05%.
A decline in crude oil prices also lifted aviation, tyre, paint and oil marketing stocks, as lower input and fuel costs are expected to support their operating margins.
Foreign investor buying supports market sentiment
Sustained buying by foreign institutional investors (FIIs) provided another boost to domestic equities.
Foreign investors purchased Indian equities worth Rs 7,284 crore on Wednesday, marking their fourth consecutive session of net buying. The renewed inflows indicate improving foreign investor confidence after significant selling pressure earlier this year.
Global market cues were also positive, with US equities rallying sharply following the Democratic victory in the midterm elections. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all ended Wednesday’s session higher.
However, market participants will continue to monitor developments surrounding the US-Iran conflict, crude oil prices, foreign fund flows and corporate earnings to assess whether the ongoing rally can sustain its momentum.