Sensex Jumps 1,000 Points, Nifty Reclaims 23,300; Investors Gain Rs 6 Lakh Crore – What's Driving The Rally?

The domestic stock market rallied sharply in early trade on November 2, with the Sensex climbing 1,000 points and the Nifty 50 crossing the 23,300 mark. A decline in crude oil prices, strong quarterly earnings from Reliance Industries and renewed foreign investor buying lifted sentiment across the market.

At 11:21 AM, the Sensex was trading 936.70 points, or 1.26 per cent, higher at 75,396.23, while the Nifty 50 gained 265.75 points, or 1.15 per cent, to 23,318.85.

The buying extended to the broader market, with the Nifty Midcap 100 and Nifty Smallcap 100 rising more than 1 per cent each. The rally added nearly Rs 6 lakh crore to investors' wealth.

Among Nifty 50 stocks, Reliance Industries (RIL), Tata Steel, Max Healthcare, Jio Financial Services, Coal India, Maruti Suzuki India, Shriram Finance, Tata Motors Passenger Vehicles, NTPC and UltraTech Cement were among the leading gainers. Infosys, Adani Ports, Eicher Motors, Bajaj Auto, Sun Pharmaceutical Industries and HDFC Life Insurance were among the stocks that traded lower, limiting the benchmark indices' gains.

Sectorally, the Nifty Oil and Gas index surged more than 4 per cent, supported by gains in Reliance Industries and oil marketing companies (OMCs). The government scrapped the export duty on petrol and raised the levy on diesel exports by Rs 3 per litre and aviation turbine fuel (ATF) exports by 50 paise per litre.

The Nifty Consumer Durables and Nifty Metal indices gained more than 2 per cent each. Nifty PSU Bank, Nifty Auto and Nifty Chemicals also advanced over 1 per cent. Nifty Private Bank was the only sectoral index trading in the red.

Why Is Stock Market Rising Today? Key Reasons Behind The Rally

1. Crude Oil Prices Ease On Hopes Of De-escalation In West Asia

Crude oil prices fell on November 2 as Iranian and Qatari officials continued discussions for the third consecutive day, raising hopes of an agreement to end the US-Israeli war on Iran, which began in February this year.

Brent crude futures fell $3.62, or 3.20 per cent, to $109.80 a barrel, while US West Texas Intermediate (WTI) crude declined $3.36, or 3.23 per cent, to $100.80 a barrel.

Brent crude had ended October at its highest level in six months amid concerns that the US-Iran conflict could escalate following Tuesday's US midterm elections.

A fall in crude oil prices is positive for India, which imports a large part of its oil requirements. Lower prices can ease pressure on the country's import bill, inflation and the operating costs of oil-consuming companies. It can also improve sentiment towards Indian equities, particularly sectors sensitive to crude prices.

2. Reliance Industries Reports Record Quarterly Profit

Reliance Industries shares jumped more than 7.70 per cent to Rs 1,254.60 on the NSE after the company reported its highest-ever quarterly profit for the July-September quarter of FY27. Given RIL's weight of around 7.30 per cent in the Nifty 50, the sharp rise in the stock provided a significant lift to the benchmark index.

The company reported a record consolidated profit after tax (PAT) of Rs 29,550 crore in Q2 FY27, up 33.8 per cent from Rs 22,092 crore in the corresponding quarter last year.

Its oil-to-chemicals (O2C) business benefited from stronger global fuel margins, while growth in the telecom business also supported earnings. Performance in the retail business remained relatively subdued.

Net profit attributable to the company's owners rose 40 per cent to Rs 25,548 crore. Consolidated revenue increased 27.8 per cent year-on-year to Rs 3,62,268 crore, while earnings before interest, taxes, depreciation and amortisation (Ebitda) rose 23.9 per cent to a record Rs 62,409 crore.

The strong results triggered buying in RIL shares, making the stock one of the biggest contributors to Monday's market rally.

3. Weakness In US Technology Stocks Supports India's Counter-AI Trade

The recent weakness in global technology stocks has also worked in favour of Indian equities, which are often seen as a counter-AI investment destination.

The Nasdaq fell 2.9 per cent on Friday, while the Dow Jones declined 1.1 per cent as investors sold technology stocks amid concerns over heavy artificial intelligence (AI) investments and the uncertainty surrounding returns. Intel's weak earnings outlook added to the pressure.

The sell-off reflects growing concerns over the amount technology companies are spending on AI infrastructure and whether these investments will generate returns quickly enough.

India, with its relatively lower exposure to the global AI-led technology rally, could benefit when investors move away from expensive technology stocks and look for opportunities in other markets.

4. Fall In US Bond Yields Offers Some Relief

Investors are also tracking movements in domestic and US Treasury yields. The benchmark US 10-year Treasury yield fell below 5 per cent last week and stood at 4.927 per cent as of 11:20 AM on November 2.

A decline in US bond yields can make emerging-market equities, including Indian stocks, relatively more attractive to foreign investors. This is because lower yields reduce the return available on relatively safer US government securities, potentially encouraging investors to look for better returns in other markets.

A sustained decline in US yields could therefore support FPI inflows into Indian equities and improve market sentiment.

5. Expectations Of LTCG Tax Changes And Fresh FPI Buying

Expectations of a possible revision in long-term capital gains (LTCG) tax provisions in the upcoming Union Budget have also added to market optimism. Some market participants are expecting a substantial reduction or even the abolition of LTCG tax, although there is no official confirmation of such a proposal.

Foreign portfolio investors (FPIs) have also returned to buying Indian equities. They purchased shares worth Rs 13,213.41 crore in the final week of October, providing support to the market's recovery.

Sustained foreign inflows could support large-cap stocks, particularly those in the banking and financial services sectors, which tend to attract significant foreign investment.