Dalal Street Surges Post-Diwali to 8-Month Highs

The Cliff News | 11 November 2026

Dalal Street resumed trading on Wednesday with substantial optimism following the Diwali break, as benchmark indices, the BSE Sensex and NSE Nifty50, climbed to levels not witnessed in eight months. The rally saw the Sensex surge by over 1,300 points in early trade, while the Nifty50 crossed the 25,300 mark, with buying activity observed across various sectors.

The BSE Sensex commenced the trading day at 82,250.52, registering a gain of 1,143.87 points or 1.41%. Simultaneously, the NSE Nifty50 opened at 25,337.80, up by 293.15 points or 1.17%. Both indices achieved their highest opening levels since February 27.

Market Capitalisation Soars Amidst Broad-Based Gains

This significant market uptrend translated into a substantial wealth increase for investors, with their holdings appreciating by approximately Rs 5.25 lakh crore. The total market capitalisation of BSE-listed companies rose from Rs 5,07,26,775.40 crore in the preceding session to Rs 5,12,51,866 crore. All 16 major sectoral indices initiated trading on a positive note. The Nifty Midcap 100 and Nifty Smallcap 100 indices also participated in the rally, gaining 0.64% and 0.72%, respectively.

Key Triggers Fueling the Market Surge

Several crucial factors appear to be driving this impressive market performance. The return of foreign institutional investors (FIIs) to Indian equities, after a period of net selling, has been a primary catalyst. In the initial six trading sessions of November, FIIs made aggressive investments totaling Rs 53,170 crore, significantly bolstering the market sentiment.

“Nifty 50 has surged by 8.6% in just six trading days of this month. This surge was triggered mainly by the aggressive FII buying of Rs 53170 crores so far this month. The dramatic change in the market environment was triggered by positive global cues for India from the weakening of the AI trade.”

V K Vijayakumar, Chief Investment Strategist at Geojit Investments, highlighted the impact of this FII influx. He anticipates that foreign investors will sustain their buying momentum, providing continued support for large-cap stocks. Vijayakumar expects FIIs to maintain their buying spree, reinforcing frontline stocks in banking, financials, telecom, capital goods, select auto, and pharmaceutical sectors, with large-caps expected to lead this rally further.

Global AI Trade Scrutiny Benefits Indian Equities

Adding to the favorable environment, a probe into Nvidia's CEO, Jensen Huang, being a potential target of foreign intelligence efforts has placed the global AI trade under increased scrutiny. The subsequent 8% fall in Nvidia's shares on Monday raised new questions about the sustainability of the AI-led market boom.

This development has indirectly benefited Indian equities, which had previously underperformed amid the global fervor for AI and chip stocks. As investors reassess concentrated bets on AI, India is attracting renewed interest due to easing crude oil prices and strong domestic earnings. Last week, India emerged as one of Asia's leading beneficiaries of the so-called 'anti-AI trade'. This shift has also prompted global financial institutions to adopt a more positive stance on Indian markets, with HSBC upgrading Indian equities to 'overweight' and Citigroup raising its 12-month target for the Nifty 50.

Easing Crude Oil Prices Provide Further Support

The moderation in crude oil prices has presented another encouraging factor for investors. Brent crude futures declined to a two-month low of $89.16 per barrel on Tuesday, following reassurances from US officials regarding the limited possibility of further military actions against Iran, thereby alleviating concerns over potential supply disruptions. While prices saw a marginal recovery on Wednesday to around $92 per barrel, they remain significantly below earlier conflict-driven levels.

The softening of crude prices has underpinned sentiment in Indian equities, creating a more favorable backdrop for domestic markets. Ponmudi R, CEO of Enrich Money, commented on the outlook:

“Indian equities appear well positioned to extend their recent advance, with a sustained moderation in crude oil prices and a revival in foreign portfolio inflows providing a more supportive backdrop for domestic markets.”

Indian Rupee Gains Traction Against the Dollar

The strengthening momentum of the Indian Rupee against the US dollar has further contributed to the positive sentiment in both currency and equity markets. The rupee opened 20 paise stronger at 93.70 against the US dollar. Forex traders noted a gradual return of foreign investors to the domestic market after extended periods of cautious participation and significant outflows.

The Indian Rupee has emerged as one of Asia's best-performing currencies in FY27. Traders suggest that continued foreign fund inflows could offer a crucial cushion against external uncertainties. This currency appreciation, combined with renewed foreign buying and declining oil prices, has collectively improved investor sentiment towards Indian equities. The Sensex and Nifty have collectively gained approximately 10% so far this month.

Strong Q2 Earnings Bolster Market Fundamentals

Beyond the immediate trading enthusiasm, better-than-expected second-quarter earnings have provided fundamental strength to the ongoing rally. Companies listed on the Nifty 50 have reported nearly 24% earnings growth in the second quarter, marking their highest performance in 12 quarters. This positive earnings season has fueled optimism, with 181 companies reporting a more than doubling of their net profit year-on-year in Q2 FY27.

Factors such as robust demand, improved profit margins, and a widespread recovery across sectors including banking, metals, pharmaceuticals, energy, and manufacturing have enabled Indian Inc. to regain its earnings momentum. Notable companies that have reported strong results include Indian Oil Corporation, JSW Steel, Hindustan Zinc, Adani Power, GAIL, and Vedanta, alongside newer entities like FSN E-Commerce Ventures (parent of Nykaa), One97 Communications (parent of Paytm), and Lenskart.