The benchmark Nifty 50 and the BSE Sensex gained 0.1% each by 10:28 a.m. IST. The Nifty 50 stood at 23,830.6, while the Sensex reached 77,020.48. Both indices have gained approximately 5% over the past four trading sessions.
Market participants, however, remain cautious about whether the recent rally can continue, particularly amid fluctuations in global crude oil prices. Anita Gandhi, head of institutional business at Arihant Capital Markets, said, "We have seen strong gains in a short span of time and sustenance of these gains will depend heavily on crude oil prices."
She added that positive corporate earnings and indications of foreign investors returning to the Indian market were providing support to market sentiment. "The comforting factor for the market is that earnings season has been positive and foreign investors are showing signs of returning to India," Gandhi said.
Investor sentiment has also received a boost from market speculation about possible changes to capital gains tax in the upcoming federal Budget next year. The discussion comes amid aggressive foreign investment outflows from Indian equities.
Sectoral performance remained broadly positive, with 12 of the 16 major sectors trading higher. The broader market also witnessed gains, as the small-cap index rose 0.5% and the mid-cap index advanced 0.6%.
Meanwhile, Brent crude futures declined 0.6% to $103 per barrel, providing some relief to markets concerned about energy costs.
However, broader Asian markets faced pressure following the US election results. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5%, while Japan's Nikkei slumped 3.6%. Concerns that Democratic gains could result in tighter regulations for data-centre projects and slower spending on AI infrastructure weighed on Japanese equities.
Investors also assessed the wider implications of the US midterm elections for the Middle East conflict, energy prices and global trade. US equity futures declined, while the dollar fell sharply against major currencies.
These developments remain particularly important for Indian investors, as higher energy prices and the domestic market's limited exposure to artificial intelligence have weighed heavily on Indian equities this year.
Analysts have said that an unwinding of the global AI trade could bring markets such as India back into focus for international investors following their sharp underperformance.
Foreign investors have purchased Indian shares worth $821 million in November, reducing their net outflows for the year to $30.59 billion.
The latest market movement reflects improving investor confidence, supported by positive earnings, easing crude prices and renewed foreign buying. However, the sustainability of the recent gains will remain closely linked to global energy prices, international market developments and the pace of foreign investment returning to Indian equities.
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