The BSE Sensex surged 2,008.61 points or 2.6% to 79,310.01, marking the highest level since April 21 and extending the winning streak to six consecutive days - the longest run in a year. The Nifty50 climbed 576 points or 2.4% to 24,536.60, reaching a three-month high. As per The Indian Express, the rally was driven by the Democrat win in the US midterm elections, with markets reacting positively to hopes that an opposing force in the House of Representatives may make it difficult for Donald Trump's Republican government to stretch the war in West Asia. The broader market rally demonstrates how multiple supportive factors are driving investor confidence, with softer oil prices, rising expectations of a possible review of the long-term capital gains (LTCG) tax structure, and other supportive factors lifting sentiment across sectors. Latest developments show crude prices have now fallen nearly 10% over the past couple of sessions to around $94 per barrel, easing pressure on emerging markets and high net importers like India.
Paint manufacturers were among the prominent gainers, with Kansai Nerolac Paints rising 2.84% to ₹200.86, Asian Paints advancing 4.44% to ₹2,525.70*, and Berger Paints gaining 2.75% to ₹498.45*. As reported by Moneycontrol, lower crude prices are generally favourable for paint manufacturers, as it could ease input cost pressures. The sector's performance reflects the direct correlation between crude oil prices and raw material costs for paint production, with the latest market rally extending the gains from earlier sessions. According to Moneycontrol, UltraTech Cement, Hindustan Unilever (HUL), Asian Paints, Bajaj Finance, Bajaj Finserv and Infosys also rose by approximately 2% each, demonstrating broad-based strength across the paint and construction materials sector. For the paint industry, crude oil derivatives are key raw materials, and lower crude prices could ease input costs, including those of solvents and other petrochemical-based materials, supporting margins if companies are able to pass on the benefits.
Shares of InterGlobe Aviation, the parent company of IndiGo, climbed 5.04% to ₹5,400, extending gains amid the sharp correction in global oil prices. According to Moneycontrol, aviation turbine fuel (ATF) represents a significant operating expense for airlines, and lower oil prices could provide relief to the airline's profitability. The sector's performance demonstrates how fuel cost reductions can significantly impact airline margins and operational efficiency, contributing to the broader market rally. As per Moneycontrol, SpiceJet also advanced 1.83% to ₹7.78, showing sector-wide strength. For aviation companies, lower crude oil prices could translate into lower ATF costs, improving operating margins and reducing pressure on ticket prices, though the extent of the benefit will depend on domestic ATF pricing, currency movements, and the pace at which lower crude prices are passed on to airlines.
The rally extended across almost all sectoral indices, with automobiles, banking, financial services, and IT being the top gainers, as reported by The Indian Express. Broader markets were a bit reserved, gaining 1-2%, with the rupee gaining to a two-week high of 94.47 to the dollar, mirroring the stock market's exuberance. According to Vinod Nair, head of research at Geojit Investments, "The US midterm verdict gave Indian equities fresh momentum, with the rally gathering pace on hopes that a more restrained Washington could pave the way for de-escalation in the Iran conflict and tariff policies." He added that "As the threat of geopolitical escalation and energy supply shocks faded, crude prices slumped, and a retreat in US Treasury yields and the dollar took further pressure off India's inflation outlook and external accounts." The strong gains came after Indian markets had already been on the up over the week due to positive earnings for the July-September quarter, with analysts citing the Indian markets being in an "oversold" zone since the start of the year.
Foreign investors have turned positive, viewing India as an anti-AI bet as valuation concerns have led to a slump in tech-heavy indices like South Korea's Kospi and Taiwan's Taiex, both down 16-22% over the past month, according to The Indian Express. They bought Indian shares worth $769.65 million on Wednesday, as per provisional data for the exchanges, with foreign investors now buying shares worth over $2.4 billion so far this month, compared to the over $7 billion sold over the past couple of months. However, some experts attribute the gains to being "sentiment-driven", with Rajesh Singla, CEO of Alpha AMC, noting that "For India, a Democratic Congress changes little in the near term. Markets prefer clarity, and a Congress able to check the White House on spending and trade measures lowers the odds of abrupt policy shocks." The India VIX index has remained at 15-16 over the past few sessions, down nearly 79% from the peak of the West Asia crisis in March, though significantly higher than the around 9 levels seen at the start of this year, indicating underlying market nervousness around sustained geopolitical stability.
