The Indian benchmark indices saw significant gains during early trade on Monday morning on account of Diwali as the Sensex opened 498 points higher at 84,451.11, and the Nifty opened higher by more than 190 points, at 25,899.90.
In the pre-open session, at 9:03 AM, the Sensex was trading over 84,200 or nearly 282 points higher and the Nifty was trading 153.40 points higher at 25,863.25. The Gift Nifty also indicated an increase of more than 62 points at 25,980 at 8:24 AM.
Among the top gainers in the markets were stocks like Reliance, HDFC Bank, Bharti Airtel, Kotak Bank and Axis Bank and the laggards included stocks such as Tech Mahindra, Mahindra & Mahindra, Tata Steel, Trent, and Ultra Cement.
Renewed Investor Confidence Ahead Of Diwali Trading Week
After three consecutive months of net outflows, foreign portfolio investors (FPIs) have made a strong return to Indian equities, pumping in Rs 6,480 crore so far in October. The turnaround signals a clear revival in sentiment, with global investors once again favouring India’s resilient macroeconomic fundamentals and attractive valuations.
Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India, said India’s macro backdrop “remains relatively strong among emerging markets”, with stable growth, manageable inflation, and firm domestic demand helping it stand out. He noted that easing global liquidity conditions and expectations of a US rate cut or policy pause have revived risk appetite, drawing capital back into high-growth emerging markets.
Adding to the optimism, Indian equity valuations, which had come under pressure earlier, have become more appealing, prompting dip-buying from long-term investors.
Geojit Investment’s Chief Investment Strategist VK Vijayakumar said the reduced valuation gap between India and other markets has been a key driver of this reversal. “India’s underperformance over the past year has opened up prospects for improved relative performance,” he noted.
Diwali Week Outlook
Equity markets enter a holiday-shortened and event-heavy trading week marked by key earnings announcements and the symbolic Muhurat trading session on Tuesday, October 21, between 1:45 PM and 2:45 PM, to usher in Samvat 2082. Regular trading will remain closed on Tuesday, while markets will also shut on Wednesday for Diwali Balipratipada.
Analysts said investors will closely track global trends, FPI flows, and quarterly earnings from heavyweight companies, including Reliance Industries, HDFC Bank, and ICICI Bank, which are expected to set the tone for the broader market.
Ajit Mishra, SVP, Research at Religare Broking Ltd, said the Diwali Muhurat session will be watched keenly for signs of festive sentiment and investor confidence. He added that the ongoing Q2 FY26 results season will remain in focus, with major firms such as Colgate, Hindustan Unilever, Dr Reddy’s Laboratories, and SBI Life Insurance set to announce their results.
Globally, developments around proposed US tariffs on China, along with movements in crude oil prices and currency trends, will play a key role in shaping risk appetite and investor positioning, Mishra added.
Markets Extend Gains Despite Global Volatility
Last week, the BSE Sensex rose 1,451.37 points or 1.75 per cent, while the Nifty gained 424.5 points 1.67 per cent last week, marking another leg of the ongoing rally.
Ponmudi R, CEO of Enrich Money, said the upbeat mood was “evident across sectors” as Indian equities defied global headwinds to hit fresh 52-week highs. “Despite persistent volatility across global markets – driven by renewed trade tensions, banking stress in the US, and sharp commodity swings – domestic benchmarks remained resilient, supported by strong liquidity and unwavering investor confidence,” he added.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart, said upcoming corporate results, particularly from Hindustan Unilever and Dr Reddy’s Laboratories, could further shape the market’s near-term direction. He added that any easing of US–China trade tensions may also lift investor sentiment.
As Indian markets open the Diwali week, the combination of robust domestic fundamentals, improving global liquidity, and renewed FPI participation is expected to keep sentiment buoyant through the festive season.
