Indian shares log biggest gains in seven months on oil slide, foreign flows

Indian shares experienced their biggest gain in seven months on Thursday, propelled by falling oil prices following Democrats' victories in the U.S. midterms and a shift away from AI trades, which boosted hopes for increased foreign inflows. The benchmark Nifty 50 climbed 2.4% to 24,536.6, while the Sensex rose 2.4% to 79,310.01.

Their six-day surge marked the longest winning streak in a year, raising optimism that Indian equities could overcome their underperformance this year, after $29 billion in foreign outflows weakened the rupee and triggered calls for tax breaks on equity investments. Despite the gains, both indices remain down 6.1% and 6.9%, respectively, for 2026.

Anand Gupta, lead portfolio manager at Allianz Global Investors, noted that India's valuation premium relative to MSCI EM is at an all-time low, making the market an attractive opportunity due to accelerating earnings, below-average valuations, and low foreign ownership. Vinit Bolinjkar, head of research at Ventura Securities, added that Democrats' control of both the Senate and House of Representatives, as well as their rebuke to President Trump's policies, will improve risk sentiment for Indian equities.

Foreign investors bought shares worth $769.65 million, marking the largest single-day buy since October 2025, as crude futures rebounded 1% to $96 per barrel, following an 8.7% drop. Indian IT stocks and financials gained 2.4% and 4% respectively, while heavyweights in the auto sector increased 4.1%. Of the 16 major sectors, fourteen rose, including Asian Paints and IndiGo, which benefited from prospects of easing inflationary pressures. Upstream oil companies, however, faced declines, with ONGC down 2.1% and Oil India declining 4%.