Dalal Street delivered an exceptional performance this week, with the BSE Sensex and Nifty 50 posting massive gains for seven consecutive sessions despite global market downturns. The rally was primarily fueled by an AI-linked sell-off on Wall Street that redirected investor attention toward Indian tech stocks, alongside robust foreign institutional investor inflows. Furthermore, strong second-quarter earnings from major financial institutions and top corporations significantly boosted domestic market sentiment ahead of the Diwali weekend.

Dalal Street delivered an exceptional performance this week, with the BSE Sensex and Nifty 50 posting massive gains for seven consecutive sessions despite global market downturns. The rally was primarily fueled by an AI-linked sell-off on Wall Street that redirected investor attention toward Indian tech stocks, alongside robust foreign institutional investor inflows. Furthermore, strong second-quarter earnings from major financial institutions and top corporations significantly boosted domestic market sentiment ahead of the Diwali weekend.

Dalal Street delivered an exceptional performance this week, with the BSE Sensex and Nifty 50 posting massive gains for seven consecutive sessions despite global market downturns. The rally was primarily fueled by an AI-linked sell-off on Wall Street that redirected investor attention toward Indian tech stocks, alongside robust foreign institutional investor inflows. Furthermore, strong second-quarter earnings from major financial institutions and top corporations significantly boosted domestic market sentiment ahead of the Diwali weekend.

Dalal Street exceeded expectations this week, closing on a high note before the Diwali weekend. The Indian indices extended gains for seven consecutive sessions, even as global markets crashed after the US midterm elections. The market also brushed off a rise in Brent crude prices as it climbed back into the $100 territory.

The BSE Sensex jumped 5,336 points or around 7 per cent this week to close at 81,028.02. The Nifty 50 benchmark gained 1,589 points or roughly 6 per cent to settle at 25,030.35. The indices also rose sharply in the last two sessions, with Sensex gaining over 2 per cent and Nifty up by 4 per cent.

According to Tickertape, stocks with high returns over the past week included Reliance, HDFC Bank, ICICI Bank, Bajaj Finance and Titan. Mahindra and Mahindra gained heavily during the last session on Friday, jumping over 6 per cent, buoyed by strong Q2 performance and a positive outlook from brokerages.

Three reasons behind the rally

  1. AI-linked sell-off on Wall Street: Artificial intelligence-linked stocks tumbled as investors weighed the possibility of stricter AI regulations after Democrats won control of the US Congress. Investors fear that the AI infrastructure buildout, which has lifted Wall Street this past year, may be affected by political gridlock.

    This has the opposite effect on the Indian market, as investors increasingly turn to Indian tech stocks for the ‘anti-AI’ advantage. Indian IT firms rely on traditional IT enterprise services instead of the heavy AI infrastructure hardware, as in the case of US companies. Shares of Infosys, Tech Mahindra, HCL Tech and TCS  opposed the global trend and closed on a green note this week.

  2. Foreign Institutional Investors (FIIs) inflow: After a sharp sell-off in the first half of October and overall in September, foreign investors have regained interest in Indian equities, net buying shares worth ₹31,786.57 crore this week.

  3. Strong Q2 earnings: Experts suggest that the ongoing rally is not just led by global factors but also by the strong earnings season in India, led by banks and non-banking financial companies (NBFCs).