Mumbai: Indian stock markets surged to eight-month highs on Wednesday morning, driven by strong foreign capital inflows, falling international crude oil prices, and robust corporate earnings. Following Tuesday's holiday for Diwali Balipratipada, trading reopened with high energy. By 10.45 am, the BSE Sensex rose 1,235.90 points, or 1.52 per cent, to 82,342.55, while the NSE Nifty 50 gained 327.90 points, or 1.31 per cent, reaching 25,372.55. On Monday, the Sensex had closed at 81,106.65 and the Nifty at 25,044.65. Both indices have reached their highest levels since February 27. Overall, equities have gained around 10 per cent in November, marking the strongest monthly performance since November 2020.

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Foreign funds flood back into Indian shares

Overseas investors have returned to Indian equities after nearly two years of heavy selling. Between September 2024 and October 2026, foreign portfolio investors withdrew roughly $61 billion from local markets. Sentiment has now turned. Foreign investors infused over ₹53,000 crore into Indian stocks during the first nine trading sessions of November alone, recording their largest monthly purchase since September 2024. Exchange data showed foreign institutional investors bought shares worth ₹7,212.22 crore on Monday. Total foreign inflows have reached $8.2 billion since mid-October. This turnaround stems from global capital shifting away from artificial intelligence stocks, alongside attractive valuations in Indian large-cap shares, which have been trading below their ten-year historical averages.

Rupee strengthens as crude oil prices ease

The Indian rupee also strengthened, appreciating 7 paise to 93.70 against the US dollar in early Wednesday trading. This follows a 21-paise gain on Monday, keeping the rupee among Asia's top-performing currencies this financial year. Lower crude oil prices have helped reduce India's import bill and ease inflation fears. Brent crude touched a two-month low of $89.16 per barrel on Tuesday before stabilising around $92.40 on Wednesday. Reduced geopolitical concerns further supported currency sentiment, though higher US bond yields and a firm dollar index at 102.26 offer opposing pressure. Official inflation data due on Thursday will provide the next policy signal.

Broad market gains lift domestic sentiment

Buying spread across domestic sectors on Wednesday. Fourteen of sixteen major sectoral indices advanced, led by financial stocks which gained 1.6 per cent. Banking leaders HDFC Bank and ICICI Bank rose 2.1 per cent and 1.4 per cent, respectively. Small-cap and mid-cap indices also gained over 1 per cent. Major gainers included Mahindra & Mahindra, Bharti Airtel, Power Grid, Eternal, and InterGlobe Aviation. IIFL Finance jumped 6.8 per cent after Blackstone agreed to acquire a 16 per cent stake. Strong festive auto sales, power demand, and bank credit growth continue to support broader market confidence.