Indian investors have returned from a brief Diwali holiday in a jolly mood, as the equity benchmarks began their day on a prominently bullish note. Both indices rallied over 1% in trade on Wednesday.
Last checked, the Nifty 50 traded 1.16% higher at around 25,334.95 levels, up nearly 300 points; Similarly, the Sensex 30 soared over 1,100 points or 1.38% to 82,235.53 levels. Broader markets supported the rally, with the Nifty Smallcap 100 gaining over 1% and the Nifty Midcap 100 indices rising nearly 1%.
The rally comes despite a steep decline in some of the major chip manufacturers and semiconductor companies on the Wall Street in Tuesday's session, following Nvidia CEO Jensen Huang's alleged affair controversy. The rout dragged major US equity indices to end in losses.
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Here are three key factors behind the rally in the Indian stock market today:
1. Steady Crude Oil Prices
Crude oil prices remained largely steady with Brent Crude holding around $92 per barrel on Wednesday, after falling to a two-month low in the previous session to trade below $90 per barrel level.
Brent had fallen below $90 a barrel on Tuesday for the first time since August, after US President Donald Trump said the conflict with Iran could end soon. The international benchmark settled 1.17% lower at $91.49 a barrel, after touching an intraday low of $89.16. Even as there was a slight uptick in Brent levels on Wednesday, they remained broadly stable.
2. FII Inflows: Overseas Investors Flip The Script
Foreign Portfolio investors turned net buyers of Indian equities in the first nine days of November, investing Rs 53,739 crore after two consecutive months of outflows, led by the AI-linked sell-off in global markets, strong corporate earnings and attractive large-cap valuations.
The latest infusion comes after net outflows of Rs 34,843 crore in October and Rs 35,861 crore in September, according to NSDL data.
3. Technical Strength
The broader market setup continues to favour the bulls, with strong momentum and recent FII buying providing underlying support, according to Deepesh Sarawagi, Technical Research Analyst at Choice Broking.
"Put writing around 25,000 provides support, while Call writing at 25,100–25,200 may cap immediate gains. Immediate support is placed at 25,000–25,150, while resistance is seen at 25,450–25,500," Sarawagi said.
A sustained move above the current levels could extend the upward trajectory towards the next crucial resistance zone around 25,500, as per Ponmudi R, CEO of Enrich Money. "The ability to sustain above the newly reclaimed levels will remain important for further upside," the analyst outlined.
Separately, some of the major Asian indices such as Nikkei 225 and the South Korean index Kospi surged over 1% and 2% respectively, despite a rocky start earlier in the day.
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