New Delhi: Indian stock markets posted strong gains on Thursday as falling international crude oil prices and renewed foreign investment improved investor confidence. The rally followed the Democratic Party's victory in both chambers of the United States Congress in the November 3 midterm elections, raising expectations of increased political pressure on President Donald Trump over the continuing conflict involving the United States, Israel and Iran.
The benchmark Nifty 50 index rose 1.78 per cent to 24,387.85 points, while the BSE Sensex gained 1.94 per cent to 78,798.25 points. The figures were recorded at 10.28 am Indian Standard Time. Both indices moved towards their highest levels in three months.
The gains extended a recovery that had continued over six consecutive trading sessions. During this period, both major indices had risen by nearly 8 per cent, although they remained lower for the year. The Nifty was down 6.5 per cent, while the Sensex had fallen 7.4 per cent since the beginning of 2026.
The decline in crude oil prices was a major factor behind the market rally. International oil prices fell sharply on Wednesday as investors assessed the possible economic and political consequences of the US election results.
Brent crude settled at $94.62 per barrel, marking an 8.7 per cent decline. US West Texas Intermediate crude fell 8.3 per cent to settle at $88.12 per barrel. Both benchmarks recorded their lowest settlement levels since August 31.
Oil prices continued to decline during early trading on Thursday. Brent crude futures fell by around 1 per cent to approximately $93.50 per barrel after the sharp drop in the previous session.
The fall in oil prices is particularly important for India because the country depends heavily on imported crude to meet its energy requirements. India imports nearly 90 per cent of the crude oil it consumes, making its economy sensitive to changes in international energy prices.
Lower crude prices could reduce India's oil import bill, ease inflationary pressure and lower operating costs for businesses that depend heavily on fuel and products made from petroleum. Airlines, transport companies and manufacturers could also benefit from lower energy costs.
The decline in oil prices has also improved investor confidence in India's economic outlook. The Indian rupee showed signs of recovery on Wednesday, reaching a nearly two week high against the US dollar. It touched 94.51 during early trading before settling at around 94.64 per dollar.
The recovery came after the rupee had lost around 5 per cent of its value against the dollar during 2026 and touched a record low of 96.96 in May. However, demand for dollars from foreign lenders and state owned banks continued to put pressure on the currency.
The US midterm election result has further influenced global market sentiment. Democrats won control of both the House of Representatives and the Senate, ending unified Republican control of Congress and delivering a political setback to Trump.
The result reflected growing public dissatisfaction over the cost of living, inflation and the continuing war involving the United States, Israel and Iran. Trump acknowledged that the conflict had affected Republican electoral performance, while Vice President JD Vance also identified the war as one of the factors behind the party's losses.
Investors believe the Democratic victory could increase political pressure on Trump to reconsider his approach to the conflict and explore diplomatic options. Concerns about further military escalation have been an important factor behind uncertainty in international oil markets.
The conflict has affected regional security and raised concerns about the movement of energy supplies through the Strait of Hormuz, one of the world's most important oil transportation routes.
Diplomatic efforts have continued, with Qatar involved in mediation between Washington and Tehran. However, the two sides remain far from reaching an agreement. The election result has not brought an immediate change in US military policy, and Trump continues to face difficult decisions over whether to maintain military operations, pursue negotiations or consider further action.
The decline in oil prices therefore reflects market expectations rather than confirmation that the conflict is approaching an end.
Foreign investment has also provided significant support to Indian shares. According to provisional data, foreign investors purchased Indian equities worth Rs 72.84 billion on November 4, equivalent to approximately $769.65 million. This was among their largest single day purchases in the Indian market since October 2025.
Their net purchases during November had reached $1.57 billion, indicating a return of foreign investment after substantial selling earlier in the year. However, domestic institutional investors were net sellers during the same period, showing that the recent recovery has received important support from overseas investors.
Several major Indian companies and sectors benefited from Thursday's gains. Financial stocks rose 2.6 per cent, with HDFC Bank gaining 2.2 per cent and ICICI Bank advancing 2.7 per cent. Asian Paints climbed 4.2 per cent, while airline operator IndiGo gained 5.3 per cent. The small cap and mid cap indices also recorded gains.
The rally in Indian markets reflected a wider improvement in international financial markets following the US election. The S&P 500 in the United States rose 1.6 per cent on Wednesday, while European shares reached a two month high. However, technology stocks in some Asian markets faced pressure amid concerns about possible changes in US policies towards artificial intelligence infrastructure.
Despite the positive movement, questions remain about how long the recovery in Indian markets will continue. Oil prices could change quickly depending on developments in the Middle East, while foreign investment flows and currency movements will remain important factors for investors.
For India, a sustained decline in crude oil prices could provide relief to the economy and support businesses facing higher energy costs. However, the longer term direction of the stock market will depend on whether the improvement in global sentiment is supported by stable energy supplies, continued investment and stronger economic conditions.