Indian stocks post longest winning streak in nearly 5 months on FPI inflow hopes

Indian share benchmarks posted their longest winning streak in nearly five months on Wednesday, on optimism over foreign fund inflows, while the focus was also on US midterm election results that are set to change the political landscape in the world’s largest economy.

A Democratic win in US midterm elections is being seen as a scathing rebuke to President Donald Trump, whose administration’s global tariff policy and decision to go to war in the Middle East also contributed to the Indian market’s underperformance this year.

India is negotiating a trade deal with the US, while Trump has imposed restrictions on Indian talent with curbs on H-1B and student visas.

“This victory does not mean that the party (Democrats) will be able to implement its program. Indeed, the US President retains a veto, which is likely to block any legislation with which he disagrees,” said Nabil Milali, portfolio manager, multi-asset & overlay at Edmond de Rothschild AM.

The Nifty 50 rose 0.63% to 23,960.6 and the BSE Sensex added 0.5% to 77,301.4. They have risen about 5.6% in five sessions.

Foreign investors bought Indian shares worth $821 million since the beginning of November, trimming their net outflows this year to $30.59 billion.

All major sectors, barring information technology, rose. The broader small-caps and mid-caps added 2% and 1.6%, respectively.

Nifty IT index lost 1.5%, with top-two software exporters Tata Consultancy Services and Infosys dropping 2.5% and 1.7%, respectively.

Three analysts said a possible effect of the Democrats’ win could be a potential slowdown in AI spending, which could help the $315 billion sector that has been disrupted by the rapid AI development.

Wednesday’s selling in IT stocks is likely some caution due to the changing political landscape in the US, their key market, said Sunny Agrawal, head of fundamental equity research at SBICAPS Securities.

“Investors could be booking profits after strong gains last month and rotating funds into other sectors on signs of a broad-based recovery in Indian equities.”

Brent crude futures fell 1% to $102.5 per barrel as investors awaited Washington’s next move in the US-Israeli war on Iran.