Indian shares pause after foreign money-fuelled rally

Indian shares ended steady on Thursday, after a rally driven by sustained foreign fund inflows, lower crude oil prices and a cooling global AI trade.

Overseas investors have bought $6.43 billion of Indian shares in November, their biggest monthly purchase in more than two years, restoring the market to the fifth largest in the world by market capitalisation, overtaking Taiwan.

“The market bias remains positive. If Brent crude prices stay below $100 per barrel, we could very well be looking at record highs for the benchmark indexes before the end of this year,” said Dharmesh Kant, head of equity research at Cholamandalam Securities.

India’s Nifty 50 edged 0.18% higher to 25,299.35 and the Sensex rose 0.04% to 81,911.01. The indexes have risen about 10% this month, outperforming emerging market peers after lagging behind for two years.

Global brokerages are increasingly sharing the optimism, with HSBC upgrading India to “overweight”, and Citi and Bernstein raising target levels for the Nifty.

Eleven of the 16 major sectors fell on Thursday, while the broader small-caps and mid-caps gained 1.1% and 0.9%, respectively.

Heavyweight financials, preferred by foreign investors, outperformed the benchmarks, rising 1.4%.

Auto stocks dropped 1%, snapping an eight-session winning streak in which they gained more than 12% on optimism over festival-season sales.

Non-bank lender Bajaj Finance rose 3.4% after announcing a share sale of over $1 billion to institutional investors.

Globally, Brent crude futures fell 1% to $92 per barrel, as investors assessed progress in peace talks over the Middle East and the Russia-Ukraine wars.

India’s consumer inflation data, due later on Thursday, likely accelerated in October, edging closer to the upper end of the Reserve Bank of India’s 2% to 6% target range, as a broad-based rise in food prices pushed up household costs, a Reuters poll showed.

Stocks listed on the National Stock Exchange had a market capitalisation of about $5.42 trillion, compared with Taiwan’s $4.4 trillion, LSEG data showed.