Sensex Surges Over 600 Points as Falling Crude Prices and FII Buying Lift Markets

Mumbai: Indian equity markets opened on a strong note on Tuesday, extending their gains for the second consecutive session this week. Easing crude oil prices, encouraging second-quarter corporate earnings and renewed buying by foreign institutional investors (FIIs) boosted investor sentiment.

The benchmark BSE Sensex surged as much as 0.87 per cent, gaining over 600 points to touch an intraday high of 76,358.79 during early trading.

The NSE Nifty 50 also advanced 0.72 per cent, rising around 170 points to trade at 23,610.70.

Buying was visible across several sectors, with financial services emerging as one of the leading gainers. The Nifty Financial Services ex-Bank index climbed 1 per cent, while Nifty Chemicals, Nifty FMCG and Nifty Media gained up to 0.77 per cent.

Indices representing private banks, cement, information technology (IT) and consumer durables also traded in positive territory. However, healthcare and energy stocks faced some profit booking.

Market analysts attributed the positive momentum to a combination of favourable domestic and global developments, suggesting that the ongoing rally could gain further strength.

They pointed to the decline in Brent crude prices to around $104 per barrel, some moderation in enthusiasm around artificial intelligence (AI)-related stocks, continued positive corporate earnings and the return of foreign investors as factors supporting the market.

Technical indicators also reflected improving market sentiment. The Nifty has moved back above its 50-day exponential moving average (EMA), positioned near 23,170, while its Relative Strength Index (RSI) improved to 61.03 from an average of 47.90, indicating strengthening buying momentum.

The put-call ratio (PCR) stood at 1.28, suggesting a favourable derivatives market setup.

According to analysts, the immediate support for the Nifty is placed in the 23,200-23,300 range, while resistance is expected around 23,600-23,700.

They also observed that aggressive value buying, accompanied by substantial short covering, had contributed to sharp gains in several stocks, including large-cap companies.

The latest rally suggests that investors who accumulated fundamentally strong stocks at lower valuations could benefit as market conditions improve, analysts said.

They added that short positions in several quality large-cap stocks, built by investors anticipating continued foreign institutional selling, were now being unwound as the market outlook changed.

Meanwhile, the recent weakness in AI-related stocks was described as a correction rather than a full-scale collapse, with earnings from several companies operating in the AI space continuing to remain encouraging.

Foreign institutional investors extended their buying streak on Monday, purchasing equities worth a net Rs 3,114 crore for the second consecutive trading session.

In contrast, domestic institutional investors (DIIs) remained net sellers for the second straight session, recording net outflows of Rs 392 crore.

Investors will also closely monitor the outcome of the US midterm elections, scheduled for Wednesday, and assess their possible implications for global geopolitical and economic developments.

Developments on the international front, particularly crude oil price movements and foreign investment flows, are likely to remain important factors influencing the direction of Indian equity markets in the coming sessions.

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