Why are Sensex and Nifty rising while US, Japan and South Korea markets bleed?

The BSE Sensex was trading at 79,821.28, up 511.27 points or 0.64%, at 10:13 am on November 6. The index had opened at 79,413.66 and touched an early high of 79,959.48. The NSE Nifty 50 was at 24,639.60, up 103 points or 0.42%, at 10:14 am.

In Short

• Indian markets show resilience amid global sell-off
• FIIs return with strong buying, supporting markets
• Better-than-expected earnings add fundamental support

Just when a global sell-off threatened to spoil the festive mood on Dalal Street, Indian markets have shown sparkled, showing resilience. While Wall Street suffered a sharp technology-led rout and Asian markets tumbled on Friday, the Sensex and Nifty held on to gains, with buying in heavyweight stocks helping Dalal Street stay in positive territory.

The BSE Sensex was trading at 79,821.28, up 511.27 points or 0.64%, at 10:13 am on November 6. The index had opened at 79,413.66 and touched an early high of 79,959.48. The NSE Nifty 50 was at 24,639.60, up 103 points or 0.42%, at 10:14 am.

This resilience stands out against the sharp losses across several Asian markets.

South Korea's KOSPI plunged as much as 8.8% in early trade, triggering a circuit breaker, while Japan's Nikkei fell more than 5%. The sell-off followed Wall Street's worst session since the tariff-related rout of April 2025, as investors rushed to exit technology and semiconductor stocks amid concerns about artificial intelligence spending and tighter regulation.

So, what is keeping Indian markets afloat when global equities are under pressure? A strong return of foreign institutional investors (FIIs), the relative attractiveness of large-cap stocks and improving corporate earnings are among the factors offering support.

FIIs RETURN WITH A STRONG BUYING PUSH

One of the biggest supports for the Indian market rally has been the return of foreign investors after a prolonged period of selling. The latest exchange data shows FIIs were net buyers of Indian equities worth Rs 14,974.68 crore in the cash market on November 5. This followed net purchases of Rs 7,284.03 crore on November 4.

That is a significant shift in sentiment, particularly as domestic institutional investors (DIIs) were net sellers during the same period. DIIs sold equities worth Rs 10,444.54 crore on November 5 and Rs 3,712.23 crore on November 4.

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said FIIs had bought equities worth Rs 35,781 crore over the last five trading sessions.

He believes this buying could help the market remain resilient despite selling and profit-booking by domestic institutions. "The market is likely to remain resilient since FII buying will continue in the changed global market construct," he said.

Pranay Aggarwal, Director & CEO, Stoxkart, said that the recent recovery in Indian equity markets reflects improving investor sentiment, supported by renewed foreign institutional participation, easing crude oil prices and buying interest across select sectors.

" However, the sustainability of this trend will depend on global economic developments, corporate earnings and domestic liquidity conditions," he added.

The latest figures suggest that foreign investors are returning in significant numbers. Their purchases have been large enough to absorb a substantial part of the selling by domestic institutions, providing support to benchmark stocks.

AI INVESTMENT FEARS IN THE US COULD WORK IN INDIA'S FAVOUR

The second factor is the changing global investment mood around artificial intelligence. The US midterm election outcome has added to concerns about the future pace of AI infrastructure spending, particularly as Democrats are expected to push for greater scrutiny of large data-centre investments and their energy requirements.

These concerns have contributed to the sharp sell-off in US technology and semiconductor stocks. Investors are questioning whether the massive investments being made in AI and data centres will generate returns quickly enough to justify the valuations of companies linked to the boom.

India, meanwhile, has a relatively lower concentration of AI-linked companies and semiconductor stocks in its benchmark indices. This could make Indian equities comparatively less exposed to a correction in the global AI trade. If investors begin reducing their exposure to expensive US technology stocks, some could look towards other markets, including India, for investment opportunities.

Vijayakumar believes the sharp correction in global technology stocks could eventually benefit India. He said the Nasdaq's 5.6% rout was triggered by concerns over a major slowdown in data-centre spending, with Democrats opposed to massive investments in the sector.

"This tech rout, particularly the sharp deceleration in AI trade will turn out to be beneficial for India," he said.

However, this does not mean that all the money exiting US technology stocks will automatically flow into Indian equities. The potential benefit for India will depend on how global investors reposition their portfolios and whether the recent FII buying continues.

LARGE-CAP STOCKS ARE LEADING THE RALLY

Another reason Indian markets are holding up is where investors are putting their money. The latest session's gains have been driven largely by heavyweight companies, rather than a broad-based rally across the market.

Vijayakumar said large-cap stocks had become attractively valued and were now drawing investor interest. He pointed to Thursday's sharp difference in performance between the benchmark and smaller companies. While the Sensex surged 2.6% on November 5, the Nifty Smallcap 100 rose only 0.67%.

"It is evident where money is going," he said, adding that financial, technology and automobile stocks still had room to move higher.

The trend was visible in Friday's early trade as well. Mahindra & Mahindra was the top Sensex gainer, rising 5.04%, followed by Titan, which advanced 2.87%. TCS gained 1.72%, HDFC Bank rose 1.72%, while Infosys and HCL Technologies were up 1.54% and 1.51%, respectively. ICICI Bank, Tech Mahindra, ITC and Adani Ports were also among the gainers.

However, the rally was not uniform. Power Grid fell 2.41%, Bajaj Finance declined 1.23%, Asian Paints dropped 1.22%, while BEL and IndiGo lost 1.20% and 1.14%, respectively. Trent, Hindustan Unilever, NTPC and Bajaj Finserv were also trading lower.

The broader market reflected this caution. While the Nifty 100 was marginally higher, the Nifty 200 and Nifty 500 were down 0.16% and 0.37%, respectively. The Nifty Midcap 100 fell 1.11%, while the Nifty Smallcap 100 declined 1.75%.

EARNINGS OFFER FUNDAMENTAL SUPPORT

The rally is also drawing support from corporate earnings, which Vijayakumar believes have been better than expected.

"It is important to recognise the fact that this ongoing rally has fundamental support from impressive earnings growth which has come better-than-expected," he said.

This matters because the recent gains are not being driven only by short-term global sentiment. Better-than-expected earnings can give investors greater confidence in the outlook for companies, particularly large businesses that have been trading at more attractive valuations.

Vijayakumar also believes that the correction in global technology stocks could eventually work in India's favour. The sharp fall in US technology and semiconductor shares was triggered by concerns that tighter scrutiny of artificial intelligence companies and a slowdown in data-centre investment could affect demand for chips and related infrastructure.

He said the sharp deceleration in the AI trade could turn out to be beneficial for India. The argument is that a reassessment of valuations in expensive global technology stocks could encourage investors to look at other markets and sectors, although this shift is not guaranteed.

IT STOCKS RISE, BUT MOST SECTORS REMAIN UNDER PRESSURE

Interestingly, Indian IT stocks were among the gainers even as technology and semiconductor shares faced heavy selling in global markets. The Nifty IT index was up 1.31% in early trade, with Infosys, TCS, HCL Technologies and Tech Mahindra trading higher.

Nifty Private Bank gained 0.58%, while Nifty Auto edged up 0.13%. Consumer Durables and Pharma were also marginally higher.

However, weakness was visible across several other sectors. Nifty Metal fell 1.54%, Realty declined 1.47%, and Oil & Gas slipped 0.54%. Financial Services ex-Bank, MidSmall Financial Services and Chemicals were also in the red.

This suggests that investors are being selective, favouring some large-cap technology and banking stocks rather than buying across the market.

RISING CRUDE AND GLOBAL VOLATILITY REMAIN RISKS

There are still risks that could test the market's resilience. Crude oil prices were higher on Friday morning, with Brent crude trading at $99.89 per barrel, up 1.63%, while US West Texas Intermediate (WTI) rose 1.30% to $91.70.

Higher crude prices are a concern for India because the country relies heavily on imports to meet its oil requirements. A sustained rise could put pressure on the import bill, inflation and corporate costs.

Volatility has also increased. India VIX, which tracks expected market volatility, was up 8.23% at 16.86 in early trade.

The global sell-off is another risk. The Moneycontrol report on Asian markets said South Korea's KOSPI fell as much as 8.8%, while the Nikkei dropped more than 5%, with semiconductor stocks such as Samsung Electronics and SK Hynix among the biggest losers. The weakness followed Wall Street's steep fall, driven by concerns over AI regulation and data-centre spending.

For now, Indian markets appear to be drawing strength from foreign buying, large-cap interest and improving earnings. But with global volatility elevated, crude prices rising and broader market indices still under pressure, the rally's ability to sustain itself will depend on whether these domestic supports remain strong.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

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