SENSEX rallies over 1,600 pts; NIFTY50 jumps 1.8% as crude oil plummets; key factors behind today's stock market surge

At 9:15 am (IST) opening bell, the NIFTY50 index surged to open 1.74% or 417.45 points higher at 24,378.05 points on Thursday’s market, in comparison to 23,960.60 points at the previous equity market close, according to NSE data.

The BSE SENSEX index also jumped to open 2% higher at 78,910.94 points during the trading session on November 5, compared to 77,301.40 points at the previous stock market close, as per the exchange data.

After the strong open, the NIFTY50 index rallied 1.8% or 431.35 points to hit an early market high of 24,391.95 points, while the SENSEX surged 2.09% or 1,621.04 points to hit a morning high of 78,922.44 points on November 5.

On Thursday morning, the GIFT NIFTY futures were indicating a gap-up opening and a positive performance during the trading session, as investors focused on major buying momentum for domestic equities.

Key factors behind today’s market rally

Crude oil prices crash 11%

Global crude oil benchmark, Brent crude prices crashed 11% to hit a low of $93.50 per barrel (bbl) during the morning trading session on Thursday, November 5, from the intraday high levels of $104.96 per bbl on Wednesday’s market.

The massive correction in crude oil prices comes after the results of the US midterm election on Wednesday, which turned in favour of the Democratic Party, as commodity market investors now focus on a potential near-term end to the escalations in West Asia.

As of 9:52 am (IST), Brent crude oil (January futures) was trading 0.82% lower at $93.84 per bbl on Thursday’s market, in comparison to $94.62 per bbl at the previous market close, according to Investing.com data.

Energy prices have cooled down 18% in the last five market sessions, and were down 6.4% in the last one-month period. Despite the near-term pullback, global crude oil prices still remain 18% higher on a three-month basis.

US midterm election impact

Democrats taking control of the House of Representatives and the Senate was perceived as an overall positive sentiment in the United States and the global market, as the US Congress will now be more prepared to potentially vote against further escalations against Iran in West Asia for the remainder of US President Donald Trump’s tenure at the White House.

Although this result was taken as a positive for sectors like consumer, retail, and financial services, global investors remained cautious about the AI and chipmaking stocks due to the crackdown potential ahead on their spending.

The upside of this for the Indian market is that foreign investors are turning away from tech and AI stocks in developed markets, including Asia, powering a massive sell-off, while looking for other equity opportunities with a lower risk profile.

Bond yield pullback

Data showed that the benchmark 10-year bond yields contracted 143 basis points to 7.08% levels during the trading session on Thursday, which in turn added to the sentiment of equities as fixed income bets offer lower returns to investors.

On the global front, investors exiting tech and AI stocks in developed markets were driving the overall demand for safe-haven assets like bonds and gold. US 10-year Treasury yields declined to 4.84% on Wednesday evening.

FII buying support

The domestic equity market indices were witnessing major sustained support from foreign investors as they find lower-risk opportunities in Indian markets amid global equity market volatility.

Foreign institutional investors (FIIs) purchased around ₹7,284.03 crore worth of capital market assets in a single day, during the trading session on Wednesday, November 4.

In contrast, the domestic institutional investors sold ₹3,712.23 crore worth of capital market assets across the exchanges during the session, booking profits amid the overall market rally.

Top gainers & losers today

Stocks like Shriram Finance, InterGlobe Aviation (IndiGo), Bajaj Finance, Asian Paints, Tata Motors PV, and BSE were leading the pack of gainers during the early hours on the NIFTY50 index on Thursday’s market.

Shriram Finance was up 5.3%, IndiGo was up 4.6%, Bajaj Finance was up 4%, Asian Paints was up 4%, Tata Motors PV was up 4%, and BSE gained 3.9% during the morning hours, as per NSE data.

Other stocks like Apollo Hospitals, ONGC, Max Healthcare, Dr Reddy’s, and Coal India, were leading the pack of top losers as of the early hours on the stock exchange.

Apollo Hospitals lost 3.4%, ONGC lost 2.2%, Max Healthcare lost 0.7%, Dr Reddy’s lost 0.5%, and Coal India lost 0.5%.

Out of the 50 stocks listed under NIFTY50, 42 of them were trading in the positive territory, while the remaining 8 stocks were down in the red zone during the initial hours of trading on November 5.