New Delhi, 07 November (H.S.): Indian equity markets witnessed an exceptional rally during the trading week ended November 6, with benchmark indices registering their strongest weekly gains in nearly six years. The Sensex and Nifty maintained a firm upward trajectory throughout the week, buoyed by positive global cues following the US midterm election results, a decisive victory for the opposition Democratic Party over President Donald Trump's Republicans, and an aggressive return of foreign portfolio investors (FPIs).
Driven by the strong buying momentum, the Nifty crossed the 25,000 mark and the Sensex moved beyond 81,000 for the first time since February 27. At the end of the five-session trading week, the BSE Sensex had surged 6,568.49 points, or 8.82 per cent, to close at 81,028.02. Similarly, the NSE Nifty 50 advanced 1,977.25 points, or 8.58 per cent, to settle at 25,030.35.
The period from November 2 to November 6 was marked by sustained gains in the benchmark indices. However, the India Volatility Index (India VIX), which measures expected short-term market volatility, also recorded a sharp increase. According to the figures cited in the report, the index rose 13.71 per cent to 17.72, indicating the possibility of heightened market fluctuations in the coming sessions.
Despite the impressive rally in heavyweight stocks, selling pressure emerged in the broader market during the final trading session, leaving the mid-cap and small-cap indices with marginal losses. Automobile and private banking stocks were among the biggest contributors to the market's weekly advance.
Major companies, including Mahindra & Mahindra, ICICI Bank, HDFC Bank and Axis Bank, featured prominently among the weekly gainers. In contrast, Power Grid Corporation was among the stocks that ended in negative territory amid profit-booking pressure.
A substantial return of foreign institutional investors (FIIs) to Indian equities during the week played a crucial role in transforming market sentiment. Concerns over elevated valuations of US technology companies and questions surrounding the returns on investments in artificial intelligence (AI) have encouraged some investors to redirect capital towards Indian markets, providing strong support to domestic equities.
The rally was further reinforced by reports that the Securities and Exchange Board of India (SEBI), the country's market regulator, had recommended that the government consider significant relief in long-term capital gains (LTCG) tax for foreign investors. The proposal, reportedly sent to the government ahead of the Union Budget, has raised expectations of improved post-tax returns and stronger foreign capital inflows. The development added to the positive momentum in the market and strengthened liquidity.
However, the profit-booking witnessed in small-cap stocks during the final session also highlighted that investors remain cautious about valuations in the broader market, despite the sharp gains in benchmark indices.
With the market having staged a powerful recovery and foreign investors returning in substantial numbers, the coming week could witness significant sectoral rotation as investors reassess valuations and reposition their portfolios following the recent rally.
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Hindusthan Samachar / Jun Sarkar
