Diwali Week Begins With Sharp Gains in Indian Equities

Indian benchmark indices started the week on a strong note on Monday, as the Sensex and Nifty posted gains of over one per cent in intraday trade. The rally came on the back of a steep drop in crude oil prices, which was driven by optimism over a possible success in US-Iran negotiations. The session, held in Mumbai on November 2, saw investors respond positively to a mix of domestic and global signals.

The Sensex opened at 75,178.24 against Friday's close of 74,459.53, a rise of 718.71 points or 0.96 per cent. The Nifty 50 began at 23,222.30, compared with its earlier close of 23,053.10, gaining 169.2 points or 0.73 per cent.

As the day progressed, the Sensex hit a high of 75,366.06, reflecting a jump of 906.53 points or 1.21 per cent. The Nifty touched 23,301.25, up 248.15 points or 1.07 per cent.

Midcap and smallcap stocks also saw buying. The Nifty Midcap index advanced 0.83 per cent, and the Nifty Smallcap index increased 0.63 per cent.

Sector-wise, the energy segment led the market. The Nifty Oil and Gas index rose more than 2 per cent. Auto shares gained 0.77 per cent, and IT shares added 0.51 per cent. Realty stocks dipped 0.74 per cent, while media stocks slipped 0.06 per cent.

Experts believe that the Indian market is showing clear signs of a comeback, supported by factors both at home and abroad. Brent crude's retreat from last week's peak of about $118 per barrel to roughly $110 has come as a relief. The fall in the US 10-year yield to 4.93 per cent has also helped lift investor confidence.

Analysts argue that India could benefit indirectly from weakness in AI-focused global investment themes. The Nasdaq's 2.8 per cent decline last week has prompted investors to explore other markets, and India is seen as a likely beneficiary.

Domestic data adds to the optimism. Bank credit growth of 17.94 per cent and record GST collections in October indicate that the Indian economy is moving at a robust pace. Speculation about major changes to the long-term capital gains tax structure in the upcoming Union Budget is also drawing attention, with some analysts saying the market has started to price in these expectations.

From a technical standpoint, the Nifty's RSI reached 53.50, well above its average reading of 45.97, which signals strength. The put-call ratio stood at 1.24, pointing to a positive derivatives trend. Support for the Nifty is seen between 22,900 and 23,000, while resistance lies in the 23,200 to 23,250 range. Experts say that holding above the 50-day EMA could drive the rally further.

Global cues were mixed, with Asian shares trading lower. Crude oil continued to soften, with Brent falling about 3 per cent to $109.97 a barrel and WTI declining nearly 3 per cent to $100.81 a barrel.

On Friday, Wall Street finished lower. Intel and Amazon reported weaker-than-expected results, and concerns over heavy AI investments led to the Nasdaq's largest one-day drop since June 5. Despite this, Indian markets opened the week with a firm start, driven by domestic strength.