The Indian stock market experienced healthy gains in intraday trade on Thursday, November 27, with the Sensex and the Nifty 50 reaching fresh record highs, amid positive global cues.
The Sensex rose over 400 points, or 0.50%, to a record high of 86,055.86, while the Nifty 50 gained 0.40% to hit an all-time high of 26,310.45.
Bank Nifty also touched a fresh peak of 59,866.60 during the session.
The frontline indices, however, pared their gains soon, while the mid- and small-cap indices saw selling pressure due to profit booking.
The Sensex closed 111 points, or 0.13%, higher at 85,720.38. The Nifty 50 closed at 26,215.55, up 10 points, or 0.04 per cent. The BSE Midcap index closed flat, while the Smallcap index closed 0.38% lower.
What drove the Indian stock market to record highs?
Five key factors that contributed to the rise in the benchmark indices:
1. Rate cut hopes from the US Fed and the RBI
The market is pricing in rate cuts from the US Federal Reserve and the Reserve Bank of India (RBI) in December. The meeting of the US Federal Open Market Committee (FOMC) is scheduled for December 9-10. The Monetary Policy Committee (MPC) of the RBI will meet on December 3, 4 and 5.
Both central banks may announce rate cuts by 25 basis points each, which will infuse more global and domestic liquidity, supporting market sentiment.
The US Fed’s rate cut may also weaken the dollar to some extent, which can trigger increased foreign capital inflows into emerging markets, including India.
2. FIIs begin buying
With valuations, especially in large-caps, easing and prospects of earnings improving, foreign institutional investors have started buying Indian equities. FIIs have been net buyers for the last two sessions. In the previous session on November 26, FIIs bought Indian stocks worth ₹4,778 crore in the cash segment.
While it is too early to say whether the trend will sustain, as uncertainty over the timeline of a potential India–US trade deal persists, experts believe that the Indian stock market’s rational valuation, along with lower crude oil prices and weakness in the dollar index, may attract foreign funds to Indian financial markets.
3. Market discounting earnings growth
An important factor supporting the market is expectations of healthy earnings growth from Q3 FY26 onwards. Experts believe that improved earnings will also alleviate concerns over valuations in the mid- and small-cap segments, helping the market sustain its gains.
“The rally has fundamental support from potential earnings growth expected in Q3 and Q4 of FY26. The consumption boom witnessed in October will translate into impressive earnings growth. If the trend sustains, even with slight moderation after the festival season, earnings growth, going forward, will be good, warranting a rally in the market,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
4. Russia-Ukraine peace talks
The prospect of a Russia-Ukraine peace deal has improved sentiment globally. As per reports, US envoy Steve Witkoff will be travelling to Moscow next week for talks with Russian leaders to find ways to end the war, which has turned out to be the biggest war in Europe since World War II.
The end of the Russia–Ukraine war may trigger a sharp fall in crude oil prices due to the unwinding of European sanctions on Russian supply. Moreover, it could improve global supply chains for other commodities and critical materials, reducing inflationary pressures worldwide, supporting economic growth, and enhancing corporate profitability.
5. Technical factor
Amruta Shinde, Technical and Derivative Analyst at Choice Equity Broking Private, pointed out that the Nifty 50 now finds strong immediate support in the 26,050–26,100 region, which has consistently acted as a demand zone.
On the upside, as per Shinde, resistance has gradually shifted toward the 26,300–26,350 band, where selling pressure is expected to emerge and potentially limit near-term upside.
Prashanth Tapse, Senior VP (Research), Mehta Equities, said that with Nifty holding above 26,000 and comfortably positioned over key DMAs, momentum now tilts firmly bullish, though a setback in the US–India trade deal remains a key risk.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.