The Indian stock market opened Wednesday’s trading session on a cautious note, with benchmark indices beginning in the red amid selling pressure in information technology (IT) stocks and mixed global cues. The BSE Sensex opened at 76,853.11, declining 64.74 points or 0.08%, while the NSE Nifty 50 started at 23,742.25, falling 68.60 points or 0.29%.
However, the benchmarks soon recovered their opening losses, supported by buying interest in heavyweight stocks and renewed foreign institutional investor (FII) participation. Investors also kept a close watch on the US midterm election results and movements in crude oil prices for further market direction.
The Sensex was trading at 77,237.91, gaining more than 320 points or 0.42%. The Nifty also moved into positive territory, extending the market’s winning streak to five consecutive sessions.
Top gainers and losers
Among the Nifty 50 constituents, State Bank of India (SBI), ITC, Max Healthcare, IndiGo and Bharat Electronics (BEL) were among the top gainers during early trade.
On the other hand, BSE, NTPC, Hindalco, Power Grid and Tata Steel featured among the major losers, reflecting selling pressure in select stocks despite the broader market recovery.
Sectoral performance remained mixed during the opening session. The Nifty IT index declined around 1%, making it one of the biggest drags on the benchmarks. The Nifty Pharma index slipped 0.36%, while the Nifty Realty index fell 0.61%.
In contrast, the Nifty FMCG index advanced 0.46%, while the Nifty Auto gained 0.32%. The Nifty PSU Bank index rose 0.31%, and the Nifty Private Bank index edged up 0.04%, indicating selective buying interest in banking and consumption-related stocks.
FII buying supports market sentiment
A key factor supporting the domestic market has been the return of foreign institutional investors to Indian equities. After remaining net sellers for an extended period, overseas investors have started increasing their exposure to domestic stocks, providing fresh support to investor sentiment.
Provisional exchange data showed that FIIs purchased equities worth Rs 6,836.81 crore on November 3, marking their third consecutive session of net buying. In contrast, domestic institutional investors (DIIs) sold shares worth approximately Rs 3,678 crore during the session.
Foreign investors have purchased Indian equities in five of the previous six trading sessions, with cumulative buying reaching Rs 18,661 crore during this period.
V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said there had been a noticeable change in foreign investor sentiment towards India. He attributed the shift to better-than-expected corporate earnings, attractive valuations in large-cap stocks and increasing foreign fund inflows.
He also pointed out that weakening enthusiasm around artificial intelligence-related investments globally could be encouraging overseas investors to diversify towards markets such as India.
Large-cap stocks, particularly banking and financial companies, are expected to remain important contributors to the ongoing recovery, given their ability to attract significant institutional investments.
US midterm elections in focus
Investors are also closely tracking the US midterm election results, with developments in the political contest between President Donald Trump’s Republicans and the Democratic Party likely to influence global market sentiment.
The possibility of Democrats gaining control of Congress has raised questions about the future direction of US economic policies, international trade relations, government spending and regulations governing artificial intelligence investments.
Any significant shift in US political control could influence global investment flows and geopolitical developments, including tensions in the Middle East. These factors are particularly important for emerging markets such as India, which remain sensitive to changes in international capital flows and trade policies.
Crude oil prices offer relief
Meanwhile, declining crude oil prices provided some support to domestic equities. Brent crude futures slipped 0.33% to $103.22 per barrel during early trade, extending their downward movement from the beginning of the week.
Lower crude prices are generally positive for India, which depends heavily on imported oil to meet its energy requirements. A sustained decline can reduce the country’s import bill, ease inflationary pressures and improve the operating margins of oil-dependent sectors such as aviation, paints and transportation.
However, geopolitical developments and possible disruptions to global energy supplies remain important risks for crude oil prices.
Global markets presented a mixed picture, with several Asian indices trading lower amid weakness in technology stocks and uncertainty surrounding the US election outcome. Japan’s Nikkei 225 declined more than 4%, while South Korea’s Kospi and Taiwan’s benchmark index also witnessed significant losses.
Despite these international headwinds, Indian equities continued to find support from foreign fund inflows, improving corporate earnings and relatively attractive valuations.
After four consecutive sessions of strong gains, investors will closely monitor institutional investment activity, sectoral movements, crude oil prices and global political developments. The ability of the Sensex and Nifty to sustain their upward momentum will remain crucial as the market navigates international uncertainty.