Early Diwali for investors as Sensex surges 1,600 points, Nifty gains 400

Indian shares rallied sharply on November 5 as falling crude prices, foreign institutional buying and the US midterm election outcome lifted sentiment.

Indian stock markets rallied sharply on Thursday, with the Sensex gaining more than 1,400 points in early trading and the Nifty 50 crossing 24,350, as falling crude oil prices and renewed foreign institutional buying lifted investor sentiment.

At 9.19 am, the Sensex was up 1,435.46 points, or 1.86 per cent, at 78,736.86, while the Nifty 50 advanced 395.20 points, or 1.65 per cent, to 24,355.80.

The gains followed the Democratic Party's victory in both chambers of the US Congress in the November 3 midterm elections, which raised market expectations of a potential easing of the conflict in West Asia.

Brent crude fell below $95 a barrel, offering relief to Indian equities as investors assessed the potential impact of lower energy costs on inflation, corporate profitability and the country's import bill.

Why falling crude prices matter for India

Brent crude traded near $94 a barrel on Thursday morning after a sharp decline in the previous session, amid expectations that the US election outcome could increase pressure for a resolution of the West Asia conflict.

India imports most of the crude oil it consumes, making sustained changes in international oil prices important for its energy costs and external balances.

Lower crude prices can reduce input costs for companies in sectors such as aviation, paints and chemicals, while potentially easing inflationary pressures.

Oil-sensitive shares participated in Thursday's rally. InterGlobe Aviation, which operates IndiGo, and Asian Paints were among the prominent gainers.

However, the benefit to companies will depend on whether crude prices remain lower and how quickly the reduction translates into operating costs.

Foreign investors return to Indian equities

Foreign institutional investors (FIIs) have also resumed buying Indian shares after months of substantial withdrawals.

Provisional exchange data showed net foreign purchases of approximately Rs 17,235 crore during the first three trading sessions of November.

On November 4 alone, foreign institutions bought shares worth Rs 7,284 crore on a net basis, while domestic institutional investors sold approximately Rs 3,712 crore.

Ponmudi R, CEO of Enrich Money, attributed the market advance to lower crude prices and renewed institutional participation.

He said sustained foreign inflows could strengthen the recovery, although the ability of benchmark indices to retain their early gains would be an important test of market momentum.

The latest purchases follow heavy foreign selling in previous months, making the durability of overseas fund flows a significant factor for the market.

US election results lift global sentiment

The Democratic Party secured control of both the Senate and the House of Representatives in the November 3 US midterm elections, dealing a setback to President Donald Trump's Republican Party.

The result has raised expectations that Democratic control of Congress could place greater scrutiny on the administration's foreign policy, including its handling of the conflict involving Iran.

Investors responded to the possibility of reduced geopolitical tensions and lower energy prices, although the election result does not itself guarantee a diplomatic settlement.

Global markets showed a mixed response on Thursday. Hong Kong's Hang Seng advanced, while South Korea's KOSPI recorded steep losses.

Banking and oil-sensitive stocks support rally

Buying extended beyond the benchmark indices, with mid-cap and small-cap shares also advancing during early trading.

Private banks were among the strongest performers. The Nifty Private Bank index rose 2.55 per cent in the figures reported by ANI, while real estate, information technology and automobile shares also recorded gains.

The advance reflected participation across several sectors rather than a rally concentrated in a handful of heavyweight stocks.

By 10.28 am, the Nifty 50 was trading at 24,387.85, up 1.78 per cent, while the Sensex stood at 78,798.25, a gain of 1.94 per cent.

Both benchmarks had gained nearly 8 per cent over six sessions, bringing them close to three-month highs. Despite the recovery, they remained below their levels at the beginning of 2026.

What could determine the next market move?

The outlook now depends partly on whether crude oil prices stabilise at lower levels and foreign investors maintain their buying.

Further developments in the West Asia conflict could influence energy markets, while corporate earnings and domestic economic indicators will shape expectations for Indian equities.

The scale of Thursday's opening advance also makes the closing performance important in assessing whether buyers can sustain the recovery.

A continued decline in oil prices would offer support to India's import-dependent economy, but renewed geopolitical tensions could reverse part of that benefit.