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INDIA STOCKS-Indian stocks hit eight-month high as foreign investors return

By Reuters News
FILE PHOTO: Men walk past a screen displaying market results outside the Bombay Stock Exchange (BSE) in Mumbai, India, April 7, 2025. REUTERS/Francis Mascarenhas/File Photo

By Vivek Kumar M

Nov 11 (Reuters) - Indian shares jumped over 1% on Wednesday, hitting an eight-month high as easing crude oil prices and caution around AI investments fuelled foreign inflows after a two-year-long exodus.

Indian markets lagged global peers for much of the last two years as investors chased AI-linked investments and higher oil prices dented the outlook for Asia's third-largest economy. But falling oil prices and AI stocks since the US midterm elections have prompted a rethink.

The Nifty 50 .NSEI rose 1.25% to 25,358 and the Sensex .BSESN gained 1.47% to 82,301.1, as of 10:07 a.m. IST (0437 GMT). They hit their highest levels since February 27.

The Nifty 50 and Sensex have soared 10% and 10.5%, respectively, so far in November, on track for their best month since November 2020 and outperforming emerging market peers.

MSCI's emerging markets index <.dMIEF00000PUS> is down 1.2% this month, on course for its third straight monthly loss.

https://www.reuters.com/graphics/NIFTY50EM-SIXNOV92026/SIXNOV92026-NIFTY50EM/zdpxelxrzvx/chart.png

Foreign portfolio investors have bought $5.68 billion of Indian shares in November, already making it their biggest monthly purchase since September 2024.

Jefferies, which joined HSBC and Citi in turning bullish on Indian equities, said in a report on Wednesday that a moderation of the AI trade, lower oil prices, resilient domestic demand and a possible cut in equity taxes could lead to durable foreign inflows.

Lower oil prices have also eased pressure on the rupee, a key concern for overseas investors.

Brent crude futures slid to a two-month low of $89.16 per barrel on Tuesday after US officials played down the need for additional military action against Iran, easing concerns over supply disruptions. Prices were up 1% at $92.40 on Wednesday. O/R

Fourteen of the 16 major sectors rose. The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 gained 1.7% and 1.1%, respectively.

Heavyweight financials .NIFTYFIN rose 1.6%, taking their monthly gains to 12.6%. HDFC Bank HDBK.NS and ICICI Bank ICBK.NS were up 2.1% and 1.4%, respectively, on the day.

"Given the new favourable environment for the Indian market, (FPIs) are likely to continue buying," said VK Vijayakumar, chief investment strategist at Geojit Investments.

IIFL Finance IIFL.NS jumped 6.8% after Blackstone BX.N agreed to buy a stake of about 16% in the non-bank lender.

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