Mumbai: The Indian stock market began Wednesday’s trading session with a spectacular surge. Driven by sustained buying from foreign investors, a softening in crude oil prices, and better-than-expected second-quarter financial results, both the Sensex and Nifty recorded strong gains.
This rally in the domestic market has bolstered investor confidence. The return of Foreign Institutional Investors (FIIs) to Indian equities, combined with the robust financial performance of companies, has provided additional strength to the market.
On Wednesday, the Nifty 50 opened at 25,337.80, up by 293.15 points or 1.17 percent. Meanwhile, the BSE Sensex opened at 82,250.52, marking a gain of 1,143.87 points or 1.41 percent.
Nifty Rises 8.6% in Six Trading Sessions
V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the Nifty 50 has climbed 8.6 percent in just six trading sessions this month. This surge is primarily attributed to aggressive buying by Foreign Institutional Investors (FIIs), who have purchased shares worth ₹53,170 crore so far this month.
He explained that a positive global sentiment toward India, coupled with a cooling off in the ‘AI trade,’ has led to a significant shift in market dynamics. Furthermore, the rally has been fundamentally supported by better-than-expected second-quarter corporate earnings.
According to Vijayakumar, Nifty 50 companies recorded an earnings growth of approximately 24 percent for the second quarter—the highest level seen in the last 12 quarters. This has also brought the Nifty’s forward price-to-earnings (PE) ratio to a reasonable level.
He further added that, given the favorable environment for the Indian market, buying by foreign investors is likely to continue. Stocks in sectors such as banking and financial services, telecom, capital goods, select automobiles, and pharmaceuticals could benefit from this. According to him, large-cap stocks will play a key role in the current market rally.
Buying in Midcap and Smallcap Stocks
The market rally was not limited to major indices alone; significant buying was also observed in midcap and smallcap stocks.
The Nifty Midcap 100 index rose by 0.64 percent, while the Nifty Smallcap 100 index gained 0.72 percent. Meanwhile, the Nifty 100 index also climbed 1.12 percent.
A positive trend was seen across almost all major sectors on the National Stock Exchange (NSE).
Among sectoral indices, Nifty Auto rose by 1.15 percent, Nifty FMCG by 0.91 percent, Nifty IT by 0.84 percent, and Nifty Metal by 0.34 percent.
Additionally, Nifty Pharma gained 1 percent, Nifty PSU Bank rose by 1.18 percent, and Nifty Private Bank climbed 1.39 percent.
Market Supported by Crude Oil Prices and Foreign Investment
Ponmudi R, CEO of Enrich Money, stated that the Indian stock market is being strengthened by the sustained softening of crude oil prices and a resurgence in foreign investment.
He noted that the return of foreign investors has supported the market’s recent recovery. This has boosted investor confidence in taking risks and strengthened the positive sentiment surrounding the domestic investment climate. Meanwhile, in the commodity market, the price of Brent crude was trading 1 percent higher at $92.41 per barrel.
Gains in Asian markets; decline in Hong Kong
Along with the Indian market, most Asian stock exchanges also witnessed a positive trend on Wednesday.
Japan’s Nikkei 225 index rose 1.32 percent to reach 61,258, while Singapore’s Straits Times Index climbed 0.38 percent.
Taiwan’s Weighted Index surged 1.90 percent to reach 43,514, and South Korea’s KOSPI index traded 1.70 percent higher at 5,327.
In contrast to the trend seen in other regional markets, however, Hong Kong’s Hang Seng Index fell 1 percent to 24,312.
Thus, driven by buying from foreign investors, strong corporate earnings, and positive cues from global markets, the Indian stock market witnessed a robust rally on Wednesday.