Indian equities are staging a strong recovery with the benchmark BSE Sensex advancing more than 6,000 points over the past six sessions falling crude oil prices, robust FII inflows and strong corporate Q2 earnings have lifted sentiment. Further, the United States midterm election outcome and softening US bond yields are supporting the rally in the run-up to Diwali 2026.
In the past six sessions, the BSE Sensex has advanced about 6,064 points while the NSE Nifty has gained 1,837 points. The two indices have advanced over 8% each in six sessions. 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.
On Thursday, the benchmarks recorded one of their strongest winning sessions with Nifty50 surging 2.40% or 576 points to close at 24,536, while the Sensex advanced 2.60% or 2,009 points to settle at 79,310. The broader market also witnessed strong buying interest, with the Nifty Midcap 100 rising 1.87% and the Nifty Smallcap 100 gaining 0.56%.
“Indian equities are expected to maintain a positive trajectory as the festive season starts 2 days ahead due to a sharp correction in crude oil prices, resumption of FII buying and firm global cues,” said Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services. Brent crude has declined nearly 16% this week to around US$94/bbl on easing concerns around the West Asia conflict.
Khemka added that the US midterm election outcome has further lifted global sentiment, with expectations of a more measured approach to trade and tariffs, alongside a weaker US dollar and the 10-year US Treasury yield easing to around 4.85%. Indian equities have also outperformed their Asian peers so far in Q3FY27, with the Nifty gaining 8.5% while the MSCI Asia Pacific index declined 7.6%.
The Q2FY27 earnings are running ahead of estimates, while improving earnings visibility and healthy domestic demand are expected to sustain the positive near-term bias. FIIs have infused around Rs 31,000 crore into Indian equities over the past four sessions, marking a sharp reversal from the record outflows recorded in September and October. On Thursday, FII net purchase stood at Rs 13,802 crore.
Meanwhile, the Indian rupee strengthened for a fifth consecutive session, appreciating 17 paise to 94.47 per dollar, its highest level since June 30, 2026. A softer US dollar, lower Treasury yields, FII inflows and easing crude prices supported the currency. The favourable cues also lifted gold which was trading above $4,100 an ounce on Thursday after rising 5% in two days.
