The festival of Diwali arrived early on Dalal Street as Indian equities extended their winning streak to seven consecutive sessions, buoyed by robust foreign institutional investor (FII) inflows, easing crude oil prices and strong Q2FY27 corporate earnings. The rally helped benchmark indices - the BSE Sensex and NSE Nifty50, to clock one of their sharpest weekly gains in recent years.
A sell-off in AI-linked stocks globally 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 for the first time since March 2, 2026. This was its biggest weekly percentage gain in about six years and the largest-ever weekly advance in absolute terms. The Sensex, meanwhile, rallied nearly 9% over the week to close above the 81,000 mark.
The sharp rally added nearly Rs 28 lakh crore to investors’ wealth during the week as the combined market capitalisation of BSE-listed companies rose from Rs 475.34 lakh crore to around Rs 503 lakh crore.
On Friday, the Sensex surged 1,718 points (2.17%) to 81,028, while the Nifty gained 493.75 points (2.01%) to settle at 25,030. Friday’s rally came despite the sharp sell-off across global markets.
Wall Street witnessed a sharp tech sell-off on Thursday as investors weighed the prospect of tougher regulation under Democrats after the mid-term election outcome.
In the past seven sessions, the BSE Sensex has advanced about 7,782 points while the NSE Nifty has gained 2,331 points. The sharp recovery comes after the market witnessed brutal selling pressure during most of August, September and October amid worsening tensions in West Asia and its 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, 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.”
Brent crude has declined nearly 16% this week to around US$98/bbl on easing concerns around the West Asia conflict. Crude oil prices have a direct influence on Indian financial markets because India imports roughly 85% of its crude oil needs.
The rupee witnessed a strong recovery, gaining around 0.50% and moving above the 94.00 mark, supported by significant FII buying in the secondary markets and improving foreign fund flows. FIIs have infused around Rs 31,000 crore into Indian equities through NSE between Monday and Thursday, marking a sharp reversal from the record outflows recorded in September and October.
Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said that global market sentiment has also seen some moderation in AI and semiconductor-related investments following the US election outcome, influencing broader capital movements. He added that going ahead, the key risk for the domestic currency remains a sharp rise in crude oil prices above $105, particularly if US-Iran tensions escalate into a wider conflict.