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INDIA STOCKS-Indian shares log biggest gains in seven months on oil slide, foreign flows

By Reuters News

By Vivek Kumar M

Nov 5 (Reuters) - Indian shares posted their biggest gain in seven months on Thursday, as oil prices fell after Democrats swept the US midterms and a global shift away from AI trades raised hopes of stronger foreign inflows.

The benchmark Nifty 50 .NSEI jumped 2.4% to 24,536.6, while the Sensex .BSESN added 2.4% to 79,310.01. They have surged over 8% in six sessions, marking their longest winning run in a year.

The gains raised hopes that Indian equities could reverse this year's underperformance against global markets, after a record $29 billion in foreign outflows battered the rupee and fuelled calls for tax breaks on equity investments.

The Nifty 50 and the Sensex are still down 6.1% and 6.9%, respectively, for 2026.

https://www.reuters.com/graphics/NIFTYMSCIEM-YTD/YTD-NIFTYMSCIEM/xmvjwmyoepr/chart.png

"India's valuation premium relative to MSCI EM is at an all-time low. In our view, accelerating earnings, below-average valuations and low foreign ownership make India an attractive opportunity," said Anand Gupta, lead portfolio manager India equity at Allianz Global Investors.

Democrats seized control of both the Senate and House of Representatives after a resounding victory in the US midterm elections, raising hopes for an end to the US-Iran war.

The victory is being seen as a scathing rebuke to President Donald Trump, whose administration's global tariff policy and decision to go to war in the Middle East had contributed to the Indian market's underperformance.

The Democratic sweep is a positive for Indian equities as "checks on abrupt US policy changes improve risk sentiment", said Vinit Bolinjkar, head of research at Ventura Securities.

Foreign investors bought shares worth 72.84 billion rupees ($769.65 million) on Wednesday, in their biggest single-day buy in India since October 2025, as per provisional data from the exchanges.

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Brent crude futures rose 1% to $96 per barrel, after an 8.7% slide in the previous session to hit a two-month low. O/R

Global chip stocks and the dollar were under pressure on fears of tighter scrutiny of AI data centres. MKTS/GLOB

Indian IT stocks, which often move inversely to chip stocks, gained 2.4% on the day.

Heavyweight financials .NIFTYFIN and auto stocks .NIFTYAUTO soared 4% and 4.1%, respectively. HDFC Bank HDBK.NS and ICICI Bank ICBK.NS gained 3.2% and 5.3%, respectively.

Of the 16 major sectors, fourteen rose. The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 rose 0.6% and 1.9%, respectively.

Shares of companies whose business relies heavily on oil prices soared on prospects of easing inflationary pressures. Among them, Asian Paints ASPN.NS and IndiGo INGL.NS added 4.4% and 5.4%, respectively.

On the other hand, upstream oil companies ONGC ONGC.NS and Oil India OILI.NS fell 2.1% and 4%, respectively.

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