India’s stock market witnessed a sharp rise on Thursday, November 5, giving investors an early Diwali boost. The total value of shares listed on the Bombay Stock Exchange increased by nearly ₹7 lakh crore during early trading.
The Sensex, which tracks the performance of 30 major Indian companies, jumped by more than 1,600 points. The Nifty 50, which follows 50 major companies listed on the National Stock Exchange, also rose by nearly 2% to cross 24,350.
This means that shares of several major Indian companies became more valuable, adding to the overall value of the stock market.
One of the main reasons behind Thursday’s rise was the fall in international oil prices. The price of Brent crude, a commonly used benchmark for global oil prices, dropped to around $94 per barrel after falling by nearly 9% in the previous trading session.
India imports a large amount of the oil it uses. When oil becomes cheaper, it can reduce the country's import costs and lower expenses for businesses that depend on fuel. This can also help ease pressure on prices of everyday goods and services.
The Democratic Party's strong performance in the US midterm elections was seen as a setback for President Donald Trump's administration. Investors are hoping that the changed political situation could increase pressure on the government to reduce tensions surrounding the conflict involving the US, Israel and Iran. This has raised hopes of greater stability in global oil supplies.
The rise in US markets helped improve confidence among investors in other countries. Major American stock market indices ended higher after the election results.
Foreign investors (investors and financial institutions based outside India that put money into Indian companies) also returned to Indian shares. They had bought shares worth around ₹7,284 crore on Wednesday, marking their fourth consecutive day of net buying.
While Thursday's rally brought some relief after a difficult period for Indian shares, it remains to be seen whether the gains will continue. Oil prices, global political developments and company earnings could influence how the market performs in the coming days.
Major companies saw their share prices rise as investors responded positively to the improved market. Among large-cap companies, Bajaj Finance saw the biggest spike followed by IndiGo, Maruti Suzuki, Asian Paints and Mahindra and Mahindra. In the mid-cap category, Linde India, Muthoot Finance, NLC India, Fertilisers and Chemicals Travancore (FACT), and UNO Minda were among the stocks with rising share prices, adding to the broader gains across the market.
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