Indian shares rise on foreign flow optimism; financials, autos lead

Indian share benchmarks closed higher on Wednesday, as easing crude oil prices and caution around global AI investments bolstered expectations of foreign inflows into Asia’s third-largest economy.

The Nifty 50 rose 0.84% to 25,255.05 and the Sensex gained 0.95% to 81,879.4, their highest close since February 26. They have soared nearly 10% so far in November, outperforming emerging market peers.

Foreign investors have poured in nearly $6 billion in November, their biggest monthly purchase since September 2024. The inflows mark a sharp improvement from two years of net outflows, as India offers an alternative investment destination at a time when investors are questioning heavy AI spending.

Analysts expect large-cap stocks to benefit the most from foreign buying.

Brent crude futures hovered around $93 per barrel on Wednesday, after hitting a two-month low of $89.16 in the previous session as US officials played down the need for additional military action against Iran, easing concerns over supply disruptions to India, the world’s third-largest energy importer.

“While the US midterms provided a long-missing spark to the markets, Trump’s recent statement on ‘Iran war being effectively over’ furthers the momentum,” said Venugopal Garre and Nikhil Arela of Bernstein, raising their Nifty 50 target for December to 26,100 points from 25,000.

That optimism is now being increasingly shared by other international brokerages, including HSBC and Citi.

Thirteen of the 16 major sectors rose. The broader small-caps and mid-caps gained 1.6% and 0.8%, respectively.

Heavyweight banks rose 1.8%, taking their monthly gains to 11.2%. HDFC Bank and State Bank of India rose 1.1% and 1.8%, respectively, on the day.

Auto stocks jumped 2.1% on optimism over festival season sales and easing US-Iran tensions.

IIFL Finance jumped 6.3% after Blackstone agreed to buy a stake of about 16% in the non-bank lender.