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Stock Markets This Week: The Diwali festival arrived early on Dalal Street as Indian equities extended their winning streak to seven consecutive sessions, supported by US midterm election results, strong foreign institutional investor (FII) inflows, easing crude oil prices and robust Q2FY27 corporate earnings.
The rally helped the BSE Sensex and NSE Nifty50 clock one of their sharpest weekly gains in recent years. A global sell-off in AI-linked stocks and softening US bond yields further lifted investor sentiment ahead of Diwali 2026.
The Nifty50 surged 8.58% during the week, gaining nearly 1,978 points to reclaim the 25,000 mark. This was its biggest weekly percentage gain in about six years, since January 2021, and its largest-ever weekly advance in absolute terms. The Sensex rallied nearly 9% to close above 81,000.
The rally added nearly ₹28 lakh crore to investors' wealth, with the combined market capitalisation of BSE-listed companies rising from ₹475.34 lakh crore to around ₹503 lakh crore.
Among the top gainers, Shriram Finance led with a nearly 17% rise, followed by Bajaj Finance and M&M, which gained over 15% each. HDFC Bank jumped around 14%, while Reliance Industries (RIL) added over 13%.
Meanwhile, on Friday, the Sensex surged 1,718 points, or 2.17%, to 81,028, while the Nifty gained 493.75 points, or 2.01%, to settle at 25,030. The rally came despite a sharp sell-off across global markets.
All eyes will now be on Diwali Muhurat trading on Sunday, November 8, 2026, marking the beginning of Samvat 2083. The special session will be held from 2:20 pm to 3:30 pm, with investors looking to make auspicious investments on Diwali.
The sharp recovery came after months of selling pressure through much of August, September and October, amid escalating tensions in West Asia and concerns over their impact on global energy prices.
"Indian equities defied a global rout, extending their winning run as investors treated the home market as a relative safe harbour amid turmoil abroad,” said Vinod Nair, Head of Research at Geojit Investments. He added, “A sharp weekly slide in crude, easing U.S. Treasury yields and a firmer rupee further burnished India’s relative appeal. With Fed officials still hinting at further hikes, the U.S. jobs report due later today will be closely watched.”
One key factor supporting Indian equities was the sharp reversal in global technology stocks. The Democrats' victory in the US midterm elections fuelled concerns that tighter regulatory scrutiny could slow data centre expansion and curb AI infrastructure investments.
This triggered an anti-AI trade, wiping around $2.5 trillion off US stock market value on Thursday as technology stocks erased Wall Street's post-election rally. Asian markets, particularly those exposed to the AI supply chain, also came under pressure amid fears of regulatory intervention and slower infrastructure spending.
For India, this shift could be beneficial as investors reassess expensive AI-linked markets and consider Indian equities as an alternative, supported by recent outperformance and improving earnings.
Crude oil provided further relief. Brent crude fell nearly 16% during the week to around US$98 per barrel as concerns over the West Asia conflict eased. This is significant for India, which imports roughly 85% of its crude requirements.
Hopes of a diplomatic breakthrough raised expectations of fewer supply disruptions. US President Donald Trump discussed de-escalation with Qatar's Emir Sheikh Tamim bin Hamad Al-Thani, while Iran was reportedly reviewing proposals from mediators on its nuclear programme. However, uncertainty persisted, with Iran demanding the lifting of the US naval blockade, sanctions relief and release of frozen assets before fully reopening the Strait of Hormuz.
Furthermore, the rupee recovered around 0.50%, moving above the 94.00 mark, supported by FII buying and improving foreign fund flows.
FIIs infused around ₹31,000 crore into Indian equities through the NSE between Monday and Thursday, reversing record outflows in September and October. On Thursday, they bought nearly ₹15,000 crore worth of equities, their biggest single-day purchase in over a year, according to provisional exchange data. This followed months of selling that had pushed foreign ownership of Indian equities to historic lows.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said FIIs had purchased equities worth ₹35,781 crore over the past five trading sessions.
Domestic institutional investors (DIIs), meanwhile, continued selling and booking profits. However, Vijayakumar believes markets can remain resilient as long as foreign buying continues amid the changed global market construct.
Ajit Mishra, SVP – research, Religare Broking noted that following the sharp seven-session rally, some consolidation and sectoral rotation would be healthy.
"The Nifty’s ability to sustain above 24,500 will be important to preserve the positive momentum and pave the way towards the 25,200–25,500 zone. We recommend maintaining a selective positive bias, focusing on fundamentally strong stocks demonstrating relative strength, while keeping position sizes in check amid potential volatility arising from global developments," he added.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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