MUMBAI, Nov 9: Indian equity markets witnessed a brief pause in their recent upward movement during the special Diwali Muhurat trading session on Sunday, as investors opted to book profits following a strong seven session rally that had lifted benchmark indices by more than 10 per cent.
The benchmark Nifty 50 declined 0.18 per cent to settle at 24,986.40, while the BSE Sensex slipped 0.04 per cent to close at 80,999.40. The marginal decline brought an end to the market’s seven consecutive sessions of gains, although the broader performance over the preceding week remained encouraging.
The special trading session, traditionally considered an auspicious beginning to the Hindu financial year, witnessed investors balancing optimism about the economic outlook with caution following the substantial gains recorded in recent sessions.
According to market analysts, the correction largely reflected routine profit-booking rather than a significant deterioration in investor confidence. The indices had advanced approximately 10.5 per cent across seven trading sessions through Friday, marking their longest winning streak of the year.
The recent recovery was supported by several favourable developments, including declining international crude oil prices, renewed foreign institutional investment, improved corporate earnings and changing expectations surrounding global technology investments.
Foreign portfolio investors emerged as an important source of support for Indian equities during the rally. Overseas investors purchased shares worth approximately Rs 45,961 crore over five sessions, reflecting a significant improvement in their participation in the domestic market.
The buying activity included a particularly strong single-day investment, representing the largest such purchase in approximately six years. The renewed interest indicated improving confidence in Indian companies and their medium-term earnings prospects.
Market participants also viewed the changing international economic environment as a contributing factor. Developments following the US midterm elections, alongside easing concerns surrounding the conflict involving Iran, helped improve sentiment towards emerging markets.
Another significant factor was the decline in crude oil prices. As India imports a substantial portion of its petroleum requirements, lower international energy prices can reduce the country’s import expenditure and ease pressure on inflation, the current account and the domestic currency.
The improvement in these indicators helped strengthen the investment outlook, particularly after concerns about expensive energy imports had weighed on Indian equities during the preceding period.
Despite the marginal decline in the benchmark indices during Sunday’s session, several sectors recorded gains. Seven of the 16 major sectoral indices ended higher, indicating that investor interest remained present in selected segments of the market.
The pharmaceutical sector emerged among the better-performing industries, advancing around 1.7 per cent. Divi’s Laboratories was a notable contributor, with its shares rising approximately 7.5 per cent after the company reported a 64 per cent year-on-year increase in quarterly profit.
The performance reflected continued investor interest in pharmaceutical companies supported by earnings growth and business fundamentals.
Metal stocks also remained relatively firm, with the sectoral index gaining approximately 0.4 per cent. Tata Steel advanced around 2.1 per cent following the announcement of improved operating performance and positive assessments from market analysts.
The broader market showed a mixed trend. Small-cap shares gained approximately 1 per cent, while mid-cap stocks recorded a modest increase of 0.1 per cent. The performance suggested that buying interest extended beyond the largest listed companies, although investors remained selective.
The latest corporate earnings announcements also contributed to the positive outlook for Indian businesses.
Tata Steel reported consolidated revenue of Rs 65,436 crore for the July-September quarter of FY2026-27, representing an 11.5 per cent increase compared with the corresponding period of the previous year. Its consolidated EBITDA increased 14 per cent sequentially to Rs 10,665 crore, supported by stronger deliveries and improved operating performance.
The company’s Indian operations continued to play a central role in its financial performance, reflecting demand from infrastructure, automotive and other industrial segments.
Siemens Limited also reported growth in its quarterly business performance, with revenue increasing 17 per cent to Rs 5,734 crore. Its new orders rose 37.8 per cent to Rs 6,228 crore, highlighting continued investment activity in infrastructure and private-sector capital expenditure.
Such announcements have strengthened expectations that corporate earnings could become an important driver of equity market performance in the coming quarters.
Market experts believe the next phase of the rally will depend increasingly on the ability of listed companies to deliver sustainable earnings growth rather than merely benefiting from improving valuations.
Raamdeo Agrawal, chairman and co-founder of Motilal Oswal Financial Services, expressed optimism about the market’s potential over the coming year, pointing towards the combination of attractive valuations and stronger earnings prospects.
Other market specialists have also suggested that investors should maintain a selective approach, particularly in sectors where valuations have increased significantly following the recent rally.
The international technology sector remains another important factor influencing domestic investment decisions. Concerns about the profitability of artificial intelligence-related investments have triggered volatility in several global markets, prompting investors to reassess companies with substantial exposure to expensive technology infrastructure.
Any prolonged correction in international technology shares could influence foreign investment allocations and the movement of funds towards other emerging markets, including India.
At the same time, developments in global energy markets will remain important for Indian businesses. Lower crude prices could support sectors that depend heavily on imported fuel and raw materials, while a renewed increase in energy costs could place pressure on corporate margins.
The banking, automobile, pharmaceutical, infrastructure and manufacturing sectors are likely to remain under observation as investors assess the impact of economic conditions on business performance.
The beginning of Samvat 2083 has therefore brought a cautiously optimistic outlook for domestic equities. Although the Diwali session ended slightly lower, the broader rally demonstrated the potential for renewed investment interest when global conditions and domestic corporate performance improve simultaneously.
For investors, the coming months are expected to be shaped by quarterly earnings, foreign portfolio investment, international crude prices, monetary policy expectations and the overall direction of global financial markets.
Analysts believe that a sustained improvement in company earnings could provide a stronger foundation for the market than short-term speculative movements. However, investors are likely to remain watchful of global uncertainties and the possibility of further profit-booking after the recent sharp recovery.
The marginal decline during Muhurat trading, therefore, reflected a period of consolidation rather than an immediate reversal of the positive trend witnessed during the preceding week.