Indian stocks started Monday on a strong footing, with the Sensex and Nifty each gaining more than 1%. Cooler crude oil prices, solid results from heavyweights such as Reliance Industries and a return of foreign buying lifted sentiment.
The Sensex climbed by more than 950 points in early trade, while the Nifty 50 moved above 23,300. In less than five minutes after the open, the combined market value of BSE-listed companies rose by nearly Rs 4 lakh crore to Rs 478 lakh crore.
Reliance Industries led the Sensex, jumping more than 5%. Tata Steel rose 4%. NTPC, Maruti Suzuki, BEL, Power Grid, SBI, Asian Paints, TCS, M&M, UltraTech Cement, HUL, L&T, Bharti Airtel and Adani Ports gained between 1% and 3%. Sun Pharma was a notable laggard, down 2%.
Among sectoral indices, Nifty Oil & Gas rose nearly 3%. Nifty Metal, Nifty PSU Bank and Nifty Consumer Durables each added more than 1%. Nifty Pharma and Nifty Private Bank slipped into the red.
Broader markets gained but lagged the benchmarks. The Nifty Smallcap 250 rose nearly 0.6% and the Nifty Midcap 100 gained more than 0.6%. On the NSE, 2,053 stocks advanced, 921 declined and 98 were unchanged.
Here are the main reasons behind the rally.
Crude oil retreats
Oil prices fell more than 3% as Iranian and Qatari officials held talks for a third straight day to try to end the US-Israeli war on Iran. The conflict began in February and has unsettled energy markets since. Brent crude futures fell to 110 a barrel and US West Texas Intermediate futures to 101.
Prices had risen recently on more attacks on ships trying to cross the Strait of Hormuz. The waterway handled 20% of the world’s oil shipments before the conflict escalated in late February.
Strong results from heavyweights
Reliance Industries reported a 41% year-on-year rise in consolidated net profit to Rs 25,548 crore for the July-September quarter of FY27. A year earlier it had earned Rs 18,165 crore.
Jio Platforms, which listed last week as India’s second most valuable company, rose over 3%. It posted a 14% increase in consolidated net profit to Rs 8,389 crore for the September quarter.
Foreign investors return
After heavy selling last month and in the first half of October, foreign investors have turned net buyers. They have bought shares worth nearly $1.2 billion over the past 10 trading sessions. Provisional NSE data showed they bought about Rs 3,599 crore of shares last Friday.
Hopes of capital gains tax relief
Investors are also hoping for relief on long-term capital gains tax. Finance Minister Nirmala Sitharaman said earlier this month that discussions on LTCG tax and securities transaction tax were continuing.
Jefferies said in a recent report that a cut in LTCG tax could give foreign investors a reason to return. It said banks, energy companies and other largecaps would benefit most.
Rupee edges up
The rupee gained nearly 0.07% to open at 94.8850 against the US dollar, from 94.95 at the previous close. Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities, said the fall in precious metals eased import worries before the festive season. He added that sentiment improved on speculation that the RBI and the Finance Ministry might consider tax changes or other steps to draw foreign inflows. “However, these expectations remain speculative, and actual policy announcements will be important,” he said.
Lower bond yields
The yield on the benchmark 10-year US Treasury fell below 5%. The 30-year yield eased to 5.3%, while the 2-year yield, which tracks expectations of Fed rate decisions, stayed near 4.6%. Lower yields generally make equities more attractive compared with bonds.
Worries over the AI trade
The global AI trade has weakened further. The tech-heavy Nasdaq fell over 4% on Friday and nearly 6% this month, with more than $2 trillion in market value reportedly lost. Investors are worried that heavy AI spending may not pay off fast enough after Big Tech earnings.
Dalal Street is seen as an “anti-AI” trade, so doubts about an AI bubble help Indian equities. IT stocks have been rallying recently.
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