Indian Markets Rally for Fourth Day Amid FPI Buying and Crude Price Fluctuations

Indian stock markets extended their gains for the fourth straight session despite a moderate rise in Brent crude prices, defying expectations that higher oil costs might dampen investor sentiment. Brent crude climbed 2 percent to $105 per barrel, yet the benchmark indices maintained their upward momentum.

Between Monday evening and Tuesday morning, Brent crude prices dropped from $108 to $104 during non-trading hours in India, before rising again to $105.29 during market hours. Market participants viewed the slight increase as a temporary fluctuation, anticipating easing tensions in the Strait of Hormuz, even as unconfirmed reports circulated about a US strike on Qeshm Island in the Persian Gulf. This geopolitical development kept investors cautious but did not derail the positive trend.

The Nifty 50 index closed 1.58 percent higher at 23,810.85, while the Sensex increased 1.62 percent to finish at 76,917.85. The Nifty Capital Markets sector posted the largest single-day gain, surging by 4.5 percent. This upswing was supported by expectations of foreign institutional investors (FIIs) returning to the market and speculation that the government may decide to reduce or eliminate the long-term capital gains (LTCG) tax, which could further attract foreign investments.

On November 3, FIIs made net purchases worth ₹6,837 crore, marking their highest single-day net buying since October 2025. Domestic institutional investors (DIIs), conversely, were net sellers, offloading ₹3,679 crore in equities. The previous peak in FII net buying occurred on October 28, 2025, when they bought ₹10,340 crore, alongside DIIs who also bought ₹1,082 crore that day.

Somil Mehta, head of retail research at Mirae Asset Sharekhan, noted, "The Indian stock market witnessed a strong rally today, with the Nifty gaining 1.58 percent and the Sensex rising 1.62 percent. The positive sentiment was supported by easing crude oil prices, improved global cues, continued foreign investor buying, and optimism around corporate earnings."

The rally was broad-based, with nearly all major sectoral indices closing in the green except for Nifty Metal, Nifty PSU Bank, and the Nifty MidSmall IT & Telecom indices. The upward trend was also fueled by improving consumer demand ahead of the Diwali festival, a period traditionally associated with increased spending.

Siddhartha Khemka, head of research for wealth management at Motilal Oswal, commented, "Nifty has moved over 4 percent in the past four days. The rally was supported by Monday’s global correction, favorable earnings from companies including FMCG giants ITC and Marico, easing crude oil prices, continuing foreign fund inflows, and optimism about a potential review of LTCG taxation for foreign investors."

FMCG stocks were among the top performers, with the Nifty FMCG index rising 3.65 percent. Lower crude prices benefit FMCG companies by reducing input costs and supporting profit margins. Marico’s strong quarterly results, with a 10 percent stock gain following their Q2 earnings announcement, bolstered investor confidence. Britannia Industries also gained 6.4 percent, reflecting upbeat expectations for consumption demand.

Sector-wise, real estate, private banks, and financial services also recorded solid gains. However, public-sector banks lagged, with the Nifty PSU Bank index declining 1.27 percent and the BSE PSU Bank index falling 1.33 percent. Power, banking, and oil and gas stocks composed the majority of the day’s losers.

Among individual stocks, Bharti Airtel climbed 3.8 percent, adding ₹46,900 crore to its market capitalization. HDFC Bank gained 3.6 percent, increasing its valuation by ₹39,300 crore, and ICICI Bank rose 2.7 percent. These three companies accounted for nearly half of the ₹2.4 trillion increase in the total market value of Nifty 50 companies. Only 11 of the 50 Nifty stocks ended in negative territory.

BSE Limited led the gainers with a 5.03 percent jump, followed by Nestlé India at 4.47 percent and Tata Consumer Products at 4.29 percent. Asian Paints, which benefits from lower oil-linked raw material costs, also rose 3.99 percent. Conversely, oil producers such as ONGC and Oil India declined, as higher crude prices generally favor their revenues.

The Nifty Capital Markets index’s notable 4.53 percent growth was driven by companies positioned to benefit from higher trading volumes. Multi Commodity Exchange of India surged 7.4 percent, Angel One rose 7 percent, Central Depository Services climbed 5.4 percent, 360 One WAM gained 5.3 percent, and BSE increased 5 percent.

Market activity in options was dominated by the expiring Nifty contract, with the 23,700 call option traded 34.4 million times, commanding ₹8,360 crore in premiums. Prices for this option soared from ₹4 on Monday to as high as ₹111 during Tuesday’s session as the index breached the 23,700 mark. Looking ahead to the next weekly expiry on November 9, the largest call option open interests are at 24,000 and 24,500, while the largest put option interests are positioned at 23,000 and 22,000. Open interest in Nifty futures dropped by 7.1 percent as the index gained, suggesting traders who bet on a market decline are closing their positions.

Khemka added that while festival demand has improved compared to last year, ongoing cost pressures, weak rural demand, and the potential continuation of the El Niño weather phenomenon could constrain rural consumption, keeping the FMCG sector outlook cautious.

Looking forward, experts advise investors to remain selective, focusing on quality stocks as markets may continue to trend upward in the near term but could face intermittent profit-taking. Key factors to watch include global developments, crude oil prices, foreign fund flows, and upcoming corporate earnings reports as the Diwali season approaches.