The domestic benchmark indices, Nifty 50 and Sensex, jumped over 1% on Monday, 2 November, signalling a potential turnaround in Indian equities amid improving global sentiment and supportive domestic cues.
The benchmarks gained on Monday as oil prices retreated from a six-month high amid efforts to end the war in Iran. Gains in Reliance Industries, following stronger-than-expected September-quarter earnings, also lifted market sentiment.
The Nifty 50 opened 0.71% higher at 23,215.85, while the Sensex started the session with a gain of 0.88% at 75,113.01. Both benchmark indices extended their gains as the session progressed, eventually rising by more than 1% each.
Key factors lifting investor sentiment
1. Easing crude Oil prices lift sentiment
Oil prices retreated from a six-month high amid talks to end the Iran war, offering relief to investors amid concerns over elevated energy costs and their impact on India’s economy.
Brent crude prices fell to around $110 per barrel on Monday, retreating from a six-month high of $118 recorded on Friday, as hopes of a diplomatic breakthrough in the Iran conflict eased concerns over potential supply disruptions.
Oil prices declined more than 3% after Iranian and Qatari officials held talks for a third consecutive day to push for an agreement to end the US-Israeli war on Iran, Reuters reported.
Brent crude futures dropped $3.68, or 3.2%, to $109.75 a barrel by 0407 GMT, while US West Texas Intermediate (WTI) crude fell $3.43, or 3.3%, to $100.69 a barrel.
Brent ended October at its highest level in six months amid fears that the conflict between the US and Iran could escalate again following Tuesday’s US midterm elections, raising concerns over global oil supplies.
2. Reliance Industries shares rally after Q2 results
Reliance Industries shares advanced after the company reported stronger-than-expected September-quarter earnings, providing a significant boost to the benchmark indices.
Reliance Industries share price surged 6% on Monday, supported by strong performance in its oil-to-chemicals (O2C) business and steady growth in its telecom arm, Jio. The performance helped offset weakness in the retail business and lifted investor confidence in the conglomerate’s earnings outlook.
The stock was trading at ₹1,232.50 as of 9:34 AM IST and was on track to record its biggest single-day gain since January 2024, if the momentum continued. Reliance was the top gainer in the Nifty 50,up 0.97% at the time.
The company, led by billionaire Mukesh Ambani, reported a 40.6% year-on-year jump in consolidated net profit to ₹25,548 crore for the September quarter, beating analysts’ estimates of ₹21,419 crore. Stronger refining and petrochemical margins drove the earnings growth.
3. Good domestic growth momentum
Strong domestic growth momentum, reflected in robust Q2 earnings, 17.94% credit growth and a 22.9% increase in GST collections, has further supported market sentiment.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said domestic economic indicators are also lending support to the market rally. Credit growth of 17.94% and robust GST collections in October point to a resilient economy that is gaining momentum.
He added that rising expectations of a significant overhaul of the long-term capital gains (LTCG) tax regime in the upcoming Union Budget, potentially including its abolition, have emerged as another positive trigger for equities. According to Vijayakumar, markets appear to have started pricing in this possibility. “For now, it is advantage bulls,” he said.
4. Weakening of the AI trade globally
Nasdaq was down by sharp 2.8% last Friday turning out to be positive for India, which is a counter AI trade.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said the weakening of the AI trade was perhaps more significant than the positive external cues for Indian markets. The sharp sell-off in AI-linked stocks dragged the Nasdaq down 2.8% last Friday. He noted that the unwinding of the AI trade could benefit India, which is widely viewed as a counter-AI investment play.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
