Indian stock markets surged on Thursday, with the Nifty 50 and BSE Sensex both rising over 2%.
US Election Results Boost Market Sentiment
The gains followed US midterm election results that gave Democrats control of both chambers of Congress. This political shift raised market hopes that US President Donald Trump might seek a negotiated settlement with Iran, ending a conflict that has disrupted global energy supplies for eight months. Following market reactions to the US election results, Wall Street indices closed sharply higher overnight, further bolstering global sentiment.
The Nifty 50 index surged by over 2%, closing at 24,442.20 points, while the BSE Sensex mirrored this rise with a more than 2% gain to 79,001.19 points. This rally was fueled by a significant drop in crude oil prices, driven by growing optimism that the conflict in West Asia might soon conclude. Oil futures have plummeted by over 14% this week, as officials from the U.S. and Iran signaled willingness to pursue diplomatic solutions.
Vinit Bolinjkar, Head of Research at Ventura, suggested that Democratic control of Congress could benefit Indian equities in the short term. He stated, ‘Checks on abrupt US policy changes improve risk sentiment,’ and noted that lower U.S. yields and a weaker dollar would likely strengthen the rupee and attract foreign investment.
Crude Oil Prices Fall Sharply
Brent Crude futures fell significantly overnight. The January contract plunged nearly 9% to drop below $95 a barrel, its lowest level in two months. The price continued falling on Thursday, trading below $94 per barrel.
“Reports that the US has approved a draft understanding, passed to Iran through Qatari mediators, have pulled the war premium out of crude oil prices,” explained Ashish Rajodiya, Head of Commodities at PL Capital.
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Falling oil prices boosted shares of companies dependent on crude-based inputs. Sectors such as aviation, auto, and realty saw notable gains. Shriram Finance and InterGlobe Aviation each rose by approximately 5.5%, while Tata Motors and Maruti Suzuki climbed 4-5%. Bajaj Finance also advanced, with financial services, auto, cement, and realty stocks leading the broader market gains.
Market Outlook and Technical Signals
The Nifty 50 options market showed a strong bullish sentiment. Premiums for call options at 24400–24500 strikes soared by 200–300%, and far out-of-the-money calls at 24600–24800 also saw significant demand, rising over 200%. Conversely, out-of-the-money put premiums fell sharply, with some contracts dropping by up to 81%. A notable increase in open interest for near-the-money put options indicated active put writing.
On technical charts, the Nifty 50 is expected to test the 24450–24600 spot levels soon. Vipin Kumar, Assistant Vice President at Globe Capital Markets, identified the 23750 level as key short-term support. He maintained a “cautiously bullish stance with a buy-on-dips strategy.”
Energy prices have been volatile due to military actions involving the US, Israel, and Iran. These disruptions caused closures along the Strait of Hormuz, a maritime choke point through which 20–25% of global petroleum trade passes. Higher oil prices had increased inflation and raised concerns about current account deficits in nations like India.
Even with Thursday’s gains, the Nifty 50 remains down 6.7% since initial strikes on Iran began. However, the benchmark has recovered 8% over the past 30 days, aided by moderating crude prices and strong quarterly earnings reports from Indian corporations.
