Indian Benchmarks Surge Over 2% as Falling Oil and Earnings Boost Sentiment; Nifty Logs Best Week Since 2021

Indian equities closed sharply higher Friday, with the Sensex surging 1,718.01 points, or 2.17%, to 81,028.02 and the Nifty climbing 493.75 points, or 2.01%, to 25,030.35, according to the Economic Times. The rally capped a blockbuster week: the Sensex gained 8.8% and the Nifty 8.5%, the strongest weekly performance for the Sensex since February 2021.

The gains extended a Thursday surge that saw the Sensex rise 2,008.61 points, or 2.60%, to 79,310.01 and the Nifty advance 576 points, or 2.40%, to 24,536.60, as reported by DNA India/ANI. Both indices have now risen more than 10% from their recent lows, placing them in technical rally territory and just 5% away from record highs.

**Drivers: Falling Oil and a Shift from AI Bets**

The rally was driven by two broad forces. First, crude oil prices fell sharply, with Brent crude trading around $96.02 per barrel and crude oil near $88.56 per barrel on Thursday, according to DNA India/ANI. The Economic Times reported that crude is on course for its steepest weekly decline since April 2020, easing concerns over inflation, India’s import bill and pressure on the rupee.

Second, the US midterm elections delivered gains for Democrats, souring sentiment toward AI-linked stocks globally, as noted by both DNA India/ANI and Bloomberg. The resulting selloff in Asian markets — Japan, South Korea, mainland China, Taiwan and Singapore lost between 2% and 7% — contrasted with India’s advance, highlighting the country’s diversification appeal for foreign funds.

Foreign portfolio investors have made net purchases of more than $4 billion over the past 13 sessions, the Economic Times reported, with large-cap stocks and banking and financial services shares leading the charge. On Thursday, the Nifty Financial Services and Nifty Bank indices surged over 4% and 3% respectively.

**Earnings Backdrop**

Corporate earnings have strengthened the investment case. Companies that have reported results so far have delivered average earnings growth of 25% year-on-year, Deepak Malik, CIO and fund manager at Carnelian Mutual Fund, told the Economic Times. “I believe markets follow earnings growth. Corporate earnings growth has been extremely strong over the past two to three quarters. As long as this growth continues, markets should also remain on an upward trajectory,” Malik said.

**Analyst Views**

Sandip Bansal, Deputy CIO at ASK Investment Managers, attributed the rebound to easing crude prices, positive sentiment around a possible long-term capital gains tax rejig, and global developments. “India remains one of the attractive long-term investment opportunities globally. While markets may experience periods of volatility driven by global geo-politics, we believe the underlying drivers of India’s growth remain strong and durable,” Bansal told the Economic Times.

Ben Powell, chief investment strategist for the Middle East and APAC at BlackRock Investment Institute, said the gains were encouraging after a period in which Indian equities had been weighed down largely by global factors. “The durability of the rally will increasingly depend on earnings delivery. Valuations have become more attractive, but we remain selective and focused on fundamentals. We remain strategically overweight Indian equities for the long term, while maintaining a more neutral tactical view,” Powell said, as reported by the Economic Times.

Ajit Mishra, SVP of Research at Religare Broking, noted in DNA India/ANI that “the broad-based strength in heavyweight stocks across sectors has helped the Nifty recover its losses over the past three months, putting the index on course to retest its August high of around 24,800. The renewed momentum in banking and financial stocks is an additional positive.”

Market analyst Vipin Dixena told DNA India/ANI that “today’s rally is encouraging because it is being supported by multiple factors rather than just short covering. Lower crude prices, improving foreign investor flows and expectations of reduced geopolitical uncertainty are helping sentiment.” He added that the Nifty’s move above the 24,200 mark improved its short-term technical structure, with 24,400–24,500 as immediate resistance.

**Caution from One Analyst**

Shankar Sharma, founder of GQuant Investech, cautioned against interpreting the gains as the start of a sustained recovery without further confirmation. “What has been surprising in the Indian bear market of two-and-a-half years is the absence of violent rallies. Most bear markets have such events quite regularly. You can go back to 2008 and see plenty of such fast and furious upward moves. The broader market has not done much; only the underperforming sectors have done well. We need more confirmation on whether this is a technical rally or the start of something more interesting,” Sharma told the Economic Times.

**Looking Ahead**

Muhurat Trading 2026 will be held on Sunday, marking the beginning of Samvat 2083, the Economic Times reported. The strong weekly performance has pushed both benchmarks into positive territory for the near term, though analysts cautioned that the sharp rally may invite intermittent profit booking.