Bringing the much-needed festive cheer to Dalal Street, Indian equities rallied for the fourth consecutive session on Tuesday with benchmarks - BSE Sensex and NSE Nifty - advancing about 1.6% each. Sentiments remained bullish as large caps continued to witness strong buying interest following robust Q2FY27 earnings, easing Brent crude oil prices to around the $105 mark, along with a moderation in sovereign bond yields.
The Nifty 50 gained 1.58% to close at 23,810, while the Sensex advanced 1.62% to 76,917. In the past four trading sessions, the two indices have gained around 4-5% each, limiting the extent of decline that persisted for most of August, September and October. The broader market is also participating in the rally, with the Nifty Midcap 100 rising 1.06% and the Nifty Smallcap 100 gaining 0.31% on Tuesday.
Brent crude prices fell around 8% to US$104.77/bbl on Monday and were trading at around US$105/bbl on Tuesday amid hopes of de-escalation in West Asia following progress in Iran-Qatar discussions towards ending the conflict. US bond yield benchmark - 10-year Treasury - stood at 4.91% to 4.92% on Tuesday. Last month, it rose to 5.36%, its highest level since 2002.
Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services said that the rally is supported by easing crude prices, continued foreign fund inflows and optimism around a potential review of LTCG taxation for foreign investors. According to reports, India’s capital market regulator - Securities and Exchange Board of India (Sebi) - has recommended scrapping the long-term capital gains (LTCG) tax on foreign portfolio investors (FPIs).
This speculation, along with weakening AI trade in the global market, has turned FPIs into net buyers in local equities. FPIs purchased shares (net) worth Rs 3,118 crore on Monday.
Vinod Nair, Head of Research, Geojit Investments said that Resilient Q2 earnings further strengthened confidence in the domestic growth outlook, while the return of foreign investors after prolonged selling provided a liquidity boost, driving broader participation led by financials and consumption-oriented sectors. He added that going forward, the durability of the recovery will hinge on broader earnings delivery, sustained FII inflows and continued moderation in oil prices and global yields, with geopolitical developments and the Fed’s policy trajectory remaining the key external triggers.
Despite the short-term recovery, Nifty50 is down about 9% year to date in 2026. Experts have cited that a recovery will require continued institutional inflows, softer crude prices and broader earnings support.
