Investors have made huge profits in the stock market ahead of Diwali in the country. Sensex and Nifty have seen gains of over 10 percent in the 7 trading days before Diwali. Which is the biggest record of 35 years. For the first time since the inception of the ‘Muhurat trading’ session at the National Stock Exchange (NSE) in 1992, both the major indices (benchmark indices) have risen by more than 10 per cent in the 7 days of Diwali.
In the seven trading sessions before Diwali, the Sensex surged 10.6 percent (7,782 points) to cross the 81,000 mark. At the same time, the Nifty rose 10.3 percent (2,331 points) to cross the 25,000 mark. On Friday, both the Sensex and Nifty rose over 2 percent to close at 81,028 and 25,030 respectively. Earlier, the Nifty’s best performance in the seven days before Diwali was in 1993, when it gained 7.5 percent. After this, an increase of 6.8 percent was seen in 2020.
Why did the stock market bounce?
Analysts say that this positivity in the domestic market has come from several news. The government may reconsider the Long Term Capital Gains (LTCG) and Short Term Capital Gains (STCG) tax in the upcoming budget of February 2027. Additionally, the Democratic Party’s landslide victory in the US midterm elections has raised hopes for a resolution to the conflict that erupted in West Asia as early as 2026.
As a result, Brent crude oil prices fell by more than 10 percent to below $95 per barrel (bbl) earlier this week. Also, the US 10-year Treasury yield, which was around 5.3 percent in May 2026, has also fallen to 4.8 percent.
Founder and Research Head of Equinomics Research G. This positivity in domestic markets, especially after Donald Trump’s defeat in the US mid-term elections, has pushed the market higher along with domestic indices, Chokkalingam said in a Business Standard report. He further said that there is high potential for peace in West Asia, which could lead to a major drop in global oil prices in the future.
Donald Trump may not take any aggressive steps on the trade front, especially against India. Oil prices may fall further, thereby strengthening the rupee. As a result, FPI (Foreign Portfolio Investment) flows into the domestic equity market may resume in the short term. It looks like this positivity in the market will continue for at least the next few weeks.
Biggest increase in 7 days before Diwali
Source: Historical data from NSE, BSE; Updated on November 6, 2026.
A 35-year-old record was broken
For the Nifty, the previous best performance was a gain of 7.5 percent in 1993, followed by a gain of 6.8 percent in 2020. Therefore, this recent rally is a new milestone in the history of Indian equity markets. Both the benchmark indices posted their strongest gains in the seven days leading up to Diwali since the NSE started the tradition of ‘muhurta trading’.
According to the data, FIIs (Foreign Institutional Investors) were buyers in the market in five of the last six trading days, adding Rs. 18,661 crore worth of shares were bought. Yields have declined by 35-40 basis points (bps) since the October high. Analysts at Bernstein believe that if the Democrats retain control of the US Congress and rein in government spending, it will bode well for Indian markets and the rupee.
There are still challenges
There are some conditions attached to this positivity. Analysts believe that the global rush to invest in AI (artificial intelligence) infrastructure is the main means of attracting capital. Additionally, many emerging markets now offer better prospects for investors than they did a few years ago. Venugopal Gair, managing director of Bernstein, said in a note written on November 4 with Nikhil Arela that this significantly limits potential investment flows into India and the impact is also short-lived.
We maintain our 25,000 target for the Nifty, but we believe the market direction in the long term will be determined less by which party controls the US Congress and more by energy prices, external balance and the sustainability of India’s earnings cycle. Although the market correction may be widespread, analysts believe that the current rally will be mainly led by large-cap stocks, which have the potential to attract mostly FII (foreign institutional investor) investment.
VK Vijayakumar, chief investment strategist at Geojit Investments, said in a BS report that the rally could be strong and likely to continue, as many large-cap stocks will see ‘short covering’. There is still plenty of room for further upside in major financial stocks.
What will the market look like in the future?
According to Anand James, Chief Market Strategist, Geojit Investments Limited, from a technical point of view the Nifty is moving towards the present internal trendline at the level of 24,835. However, he has warned that if the Nifty falls in the range of 24,079-24,130, it may come back to the 23,700 level.
Ponmudi R., CEO of SEBI-registered online trading and wealth-tech firm Enrich Money. Media reports stated that Nifty 50 has crossed above its 20-day, 50-day, 100-day and 200-day EMA (Exponential Moving Average). This is a sign of a major correction in its technical framework and strengthening bullish momentum. He said immediate resistance is around 24,600.
He further said that if the Nifty holds firm above this level, the rally could go to 24,800 to 25,000 levels. “On the downside, the range of 24,400-24,300 forms an immediate support zone, followed by an important psychological support level at 24,000.A hold above these levels will be necessary to maintain the current positive momentum.
