Indian stock markets began Thursday's session with a sharp rally, with the Sensex climbing more than 1,600 points and the Nifty rising over 400 points. A strong performance on Wall Street, a steep fall in crude oil prices and easing global uncertainty lifted investor sentiment, triggering broad-based buying across sectors.

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The BSE Sensex opened at 78,910.94, up 1,609.54 points or 2.08%. The NSE Nifty 50 started the day at 24,378.05, gaining 417.45 points or 1.74%.

The rally comes as investors respond to the outcome of the US midterm elections and improving global market conditions. Here's what is driving the gains and the levels investors will be watching.

Why is the stock market rising today?

Several global developments have helped improve risk appetite, with the gains on Wall Street and the fall in crude oil prices providing major support.

1. Strong gains on Wall Street

US markets ended Wednesday's session sharply higher after the midterm election results eased political uncertainty. The Dow Jones Industrial Average surged more than 3%, marking its strongest post-midterm election performance in over four decades.

The S&P 500 and Nasdaq Composite also gained more than 1.4% each. The positive close on Wall Street helped set the tone for Asian markets, including India.

2. Crude oil prices fall below $100

A sharp decline in international crude prices provided another boost to Indian equities. Brent crude fell nearly 10%, settling below $100 a barrel.

Lower oil prices are generally positive for India, which depends heavily on imported crude. They can ease pressure on the country's import bill and reduce concerns about inflation and costs for businesses.

3. Lower US bond yields and a weaker dollar

US Treasury yields also moved lower, with the benchmark 10-year yield retreating to around 4.89%. A weaker US dollar further supported demand for riskier assets across global markets.

Together, these developments improved investor appetite for equities.

4. Easing geopolitical concerns

Reduced concerns surrounding Iran added to the positive global mood. The easing of geopolitical worries, alongside lower crude prices, helped investors move towards risk assets.

5. Foreign investors continue buying Indian shares

Foreign institutional investors (FIIs) extended their buying streak for a fourth consecutive session on Wednesday, purchasing equities worth ₹7,284 crore.

Domestic institutional investors (DIIs), however, remained net sellers for the fourth straight day, offloading shares worth ₹3,712 crore.

Which sectors are leading the Sensex and Nifty rally?

Banking and financial stocks were among the biggest gainers in early trade. The Nifty Private Bank index rose more than 2%, while the Nifty Realty index gained 1.86%.

All sectoral indices were trading in positive territory. Nifty Cement, Nifty Auto, Nifty IT, Nifty Oil & Gas and Nifty PSU Bank also advanced by up to 1.82%.

FMCG, consumer durables, metals, media and chemicals stocks recorded gains ranging from 1% to 1.5%.

The broad-based buying indicates that the positive sentiment was not restricted to a handful of heavyweight stocks.

Nifty outlook: Key support and resistance levels

Market experts said the Nifty continues to trade above its 200-day exponential moving average (EMA), placed near 23,904. This is seen as a sign of a supportive technical trend.

The Relative Strength Index (RSI) has climbed to 68.55, pointing to strong upward momentum. However, analysts have cautioned that some profit booking could emerge after the sharp gains.

The immediate support zone for the Nifty is placed between 24,000 and 24,200. On the upside, resistance is seen in the 24,500–24,700 range.

Investors will also be watching how global market sentiment develops after the initial reaction to the US election results. Experts have cautioned that political conflict in the US could remain a concern, particularly given President Donald Trump's approach to political disagreements.

For now, strong global cues, cheaper crude and continued foreign investor buying have given Indian markets a positive start to Thursday's session.

With IANS inputs