Indian stock benchmarks inch higher to one-year highs in special Diwali session

India’s benchmarks inched higher in the special Diwali session on Tuesday, extending their recent rally on optimism over earnings and potential easing of U.S.-China trade tensions.

The Nifty 50 rose 0.1% to 25,868.6 and the BSE Sensex rose 0.07% to 84,426.34, their highest close since September 2024.

On the day, 12 of the 16 major sectors advanced, but the gains were marginal. The broader small-caps and mid-caps rose 0.5% and 0.1%, respectively.

“The market’s strength is underpinned by upbeat quarterly results, along with expectations of return of foreign inflows and improving global risk sentiment,” said Ajit Mishra, senior vice president of research at Religare Broking.

However, with Nifty approaching the 26,000 mark, some consolidation around current levels cannot be ruled out before a fresh breakout, said Mishra.

They have risen about 3% in five consecutive sessions and are now 1.5% below their all-time high after the special one-hour trading window or the “Muhurat”, meaning auspicious in Hindi, trading session.

Earnings power Indian stocks to fourth day of gains ahead of holidays

Indian markets, after a bout of underperformance since their September 2024 peak amid foreign outflows, U.S. tariffs on Indian goods, and earnings worries, are staging a comeback buoyed by policy support, tax cuts and optimism over an earnings revival.

European and Asian markets rose as investors cheered signs of easing U.S.-China trade tensions, after U.S. President Donald Trump said he expected to reach a fair trade deal with Chinese President Xi Jinping during their meeting next week in South Korea.

Among individual Indian stocks, DCB Bank jumped 9.4%, extending Monday’s 12.2% surge, after reporting a 19% rise in quarterly profit post-market on Friday.

Ola Electric slipped 2.8% after its founder and a senior executive were named in a police report over an employee’s suicide. The company has challenged the FIR in the Karnataka High Court.