Following a short break for Diwali, Indian investors have returned with great enthusiasm, and the stock market opened with a strong rally today. In Wednesday’s trading session, both major indices saw gains of over 1%.
According to the latest data, the Nifty 50 was trading at 25,334.95, up by approximately 300 points (1.16%). Similarly, the Sensex 30 surged by over 1,100 points (1.38%) to reach 82,235.53. The broader markets also supported this upward trend, with the Nifty Smallcap 100 rising by more than 1% and the Nifty Midcap 100 index gaining nearly 1%.
This rally comes at a time when Wall Street experienced a sharp decline in the shares of several major chipmakers and semiconductor companies on Tuesday. The sell-off followed a controversy involving Nvidia CEO Jensen Huang. As a result of this heavy selling, major US stock market indices closed in the red.
There are three main reasons behind the current rally in the Indian stock market:
- Stability in crude oil prices
Crude oil prices have remained largely stable. On Wednesday, Brent Crude was trading at around $92 per barrel. In the previous session, it had fallen to a two-month low, dropping below $90 per barrel. On Tuesday, Brent crude fell below $90 per barrel for the first time since August, following remarks by US President Donald Trump that the ongoing standoff with Iran could soon come to an end. The international benchmark touched a low of $89.16 before closing at $91.49 per barrel, down 1.17%. Although Brent prices saw a slight uptick on Wednesday, they remained largely stable overall.
- FII Inflow: A Shift in Stance by Foreign Investors
In the first nine days of November, Foreign Portfolio Investors (FPIs) have turned net buyers of Indian equities. After two consecutive months of outflows, they have invested ₹53,739 crore. Key drivers for this shift include AI-related sell-offs in global markets, strong corporate earnings, and attractive valuations of large-cap stocks.
According to NSDL data, this inflow follows net outflows of ₹34,843 crore in October and ₹35,861 crore in September.
- Technical Strength
According to Dipesh Sarawgi, a technical research analyst at Choice Broking, the broader market setup remains in favor of the bulls. Strong momentum, coupled with recent buying by FIIs, is providing solid support to the market.
Sarawgi noted, “Put writing at the 25,000 level is providing support, while call writing at the 25,100–25,200 range could cap further gains. Immediate support lies in the 25,000–25,150 zone, while resistance is seen at the 25,450–25,500 level.” Furthermore, major Asian indices such as the Nikkei 225 and South Korea’s Kospi saw gains of over 1% and 2%, respectively, even though the day had begun with significant volatility.