Indian equities headed into Diwali with a second straight weekly gain, powered by cheaper crude amid rising hopes of an end to the Iran war following US President Donald Trump’s midterm election setback, and renewed foreign buying, even as a sell-off in technology stocks battered several overseas markets.
The Nifty and Sensex rose nearly 9% each during the week, marking their strongest weekly gains since February 2021, when optimism over a growth-oriented Union Budget had sparked a rally of nearly 10%. On Friday, the Nifty rose 2% to close at 25,030.35, while the Sensex advanced 2.2% to 81,028.
The strong market momentum helped the index break above the 24,774.3 resistance level, not tested since August 3. The current momentum could propel the market towards 25,178.65, the level at which it was trading before the West Asia war began February-end, said an analyst at Aditya Birla Money.
Consumer durables, realty and financial services led the weekly rally as investors favoured businesses tied to domestic demand.
India’s limited exposure to the global artificial intelligence (AI) trade helped it buck the sell-off elsewhere, said Kranthi Bathini, director of research at WealthMills Securities.
Corrections in AI, semiconductor and data-centre stocks weighed on overseas markets, while falling oil prices improved India’s appeal, he added.
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The rebound has raised hopes that Indian equities are regaining their footing after a difficult stretch. But analysts remain divided on whether it marks a durable recovery or reflects expectations of easing geopolitical tensions.
Brent crude’s retreat below $100 a barrel on expectations of a de-escalation in the US-Iran conflict offered relief to investors worried about India’s import bill, inflation and corporate margins.
Anil Rego, founder and chief executive officer (CEO) of Right Horizons, attributed the rally to cheaper oil, renewed foreign investor buying and expectations of easing geopolitical tensions.
Oil prices retreated after Trump’s Republican Party lost its majorities in both chambers of Congress to the Democrats in the November 3 midterm elections, raising hopes that the outcome would increase pressure on the US president to end the Iran war. Foreign portfolio investors bought a net ₹22,693 crore of Indian equities during the week, including primary-market investments. Domestic institutional investors, meanwhile, sold a net ₹18,227 crore, including a record single-day outflow of ₹10,444.5 crore on November 4.
Bathini said domestic institutions have been selling to raise cash after investing steadily over the past few quarters.
Abhishek Mishra, founding partner at SKG, offered a more cautious assessment. “This is a relief rally that has not yet become a recovery,” he said, arguing that much of the advance rested on hopes of a peace agreement rather than a lasting resolution of the risks troubling investors.
For the rally to become sustainable, Brent would need to remain below roughly $90–95 a barrel, foreign buying must continue for several weeks and earnings expectations must improve, he added.
All sectoral indices ended the week higher. BSE Consumer Durables led with a nearly 11% gain, while Realty and Financial Services rose 10% each. Auto gained 9.2%, while Oil & Gas, and Energy advanced 9% each.
Bathini favoured domestically-oriented businesses, including banks, financial services companies, consumer firms and defence stocks. He also saw opportunities in information technology and power over the longer term.
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The gains contrasted sharply with losses in several Asian markets. Taiwan’s Taiex fell 12.2%, South Korea’s Kospi lost 11.7% and Japan’s Nikkei 225 declined 9.3% during the week. The US S&P 500 fell 3%, and Brazil’s Ibovespa slipped 1%.
Other markets advanced: Hong Kong’s Hang Seng gained 5.1%, China’s CSI 300 rose 1.7% and France’s CAC 40 climbed 1.2%.
India’s outperformance, however, doesn’t insulate it from renewed external shocks. Rego said stable oil prices, a steadier rupee and improving earnings is essential to retain foreign interest. Renewed West Asia tensions, crude above $100 or higher US bond yields can weaken appetite.
“We would therefore not assume that the recent return of FPI buying automatically signals a sustained inflow cycle,” he added. Mishra warned some foreign purchases can be short-term bets. Continued domestic selling may leave equities with less support if overseas buying slowed. The rally sets an optimistic backdrop for Muhurat trading, the special Diwali session marking the new Samvat year. History, however, suggests festive gains often fade quickly.
Nasdaq rebounds as chips stocks recover from steep losses
Nov 6 (Reuters) – The tech-heavy Nasdaq rose on Friday as chip stocks bounced off heavy losses posted in the previous session on fears that a Democratic-led Congress could result in tougher AI regulation, even as the jobs report raised interest-rate hike concerns.
The Nasdaq Composite logged its steepest one-day decline in 19 months on Thursday, confirming it had entered correction territory. The index was also headed for a fourth straight weekly fall.
The selloff followed Democrats’ midterm election victory, including in some key data-center states, stoking concerns that AI data-center buildout could slow. Optimism over the sector’s rapid growth had propelled stock markets to record highs this year.
On Friday, megacap and growth stocks were mixed. Nvidia added 5.6%, after suffering its worst day since January 2025 when the emergence of low-cost Chinese AI model DeepSeek rattled Wall Street.
Chip stocks staged a recovery, with broader semiconductor index rising 4.6%, after plunging over 12% in the previous session. AMD, Intel, and Micron Technology were up between 3% and 10.5%.
Meanwhile, US nonfarm payrolls increased more than expected in October and the unemployment rate fell to 4.1%, suggesting the labor market remained resilient.
“Those are strong numbers and normally that would say that the Fed would have to be more on the hawkish side,” said Joe Saluzzi, co-head of equity trading at Themis Trading.
“The flip side of that is that what we saw yesterday and how volatility has spiked, will the Fed want to raise interest rates in the face of a market which is teetering?”
Traders added to bets that the Fed could hike rates as soon as next month, with a 78% chance of a December move compared with a 70% chance seen earlier.
At 10:21 a.m. ET, the Dow Jones Industrial Average held steady at 51,530.05 points, the S&P 500 gained 72.56 points, or 1%, to 7,426.29 and the Nasdaq Composite gained 421.2 points, or 1.73%, to 24,736.2.
Six of the 11 S&P 500 sectors were trading higher, with information technology leading gains. Consumer staples and health care were the laggards.
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Wall Street’s fear gauge, the CBOE Volatility Index, eased slightly on Friday, at 23.88, after logging its biggest one-day jump in about 19 months on Thursday.
Data-center operators IREN and Applied Digital , neoclouds CoreWeave and Nebius Group and AI-exposed utilities and equipment suppliers such as GE Vernova and Constellation Energy recovered from deep losses in the last session.
Elon Musk-led Tesla and SpaceX were also up 5.5% and 6.3%, respectively, after dropping sharply in the last two sessions.
A jump in crude oil prices on Thursday had also pressured equities over concerns of energy-fueled inflation and prospects of higher interest rates by global central banks. Brent crude futures were slightly lower on Friday.
Despite the gains, oil prices were set for sharp weekly declines, putting the S&P 500 energy index on track for a more than 11% weekly drop.
The S&P 500 was on pace for its worst week since March 2025, when concerns regarding the Trump administration’s tariff policies had roiled global markets.
Among other stock movers, software firm Atlassian dropped 14.7% after reporting first-quarter results. Airbnb climbed 9.4% after the vacation rental platform raised full-year 2026 revenue growth forecast.