Nifty, Sensex end Diwali session lower after seven-day rally

Indian shares ended the special Diwali trading session little changed on Sunday, taking a pause after a seven-session rally supported by renewed foreign investor buying. Limited exposure to artificial intelligence also helped shield domestic stocks from the global technology selloff.

The Nifty 50 fell 0.18 per cent to 24,986.4, while the Sensex declined 0.04 per cent to 80,999.4 during the one-hour trading window.

The benchmarks had gained more than 10 per cent over the seven sessions leading up to Friday. The rally followed a sharp fall in oil prices after the US midterm election results, which lifted investor sentiment in Asia’s third-largest economy.

Foreign portfolio investors bought shares worth 459.61 billion rupees ($4.89 billion) over five sessions last week. The purchases included India’s biggest single-day foreign investor buying in about six years on Thursday.

“The recent decline in crude oil prices following the US midterm elections has eased concerns over inflation, India’s import bill and pressure on the rupee,” Ravi Singh, chief research officer at Master Capital Services, said.

Strong foreign institutional investor buying, supportive global cues and better-than-expected September-quarter earnings have reinforced the rally, he added.

Seven of the 16 major sectoral indexes advanced during Sunday’s special session. The small-cap index rose 1 per cent, while the mid-cap index gained 0.1 per cent.

The pharma index climbed 1.7 per cent, led by a 7.5 per cent jump in Divi’s Laboratories after the company reported a 64 per cent year-on-year increase in quarterly profit.

The metal index gained 0.4 per cent, with Tata Steel rising 2.1 per cent after reporting an 18 per cent increase in operating profit and receiving positive brokerage commentary on its India business.

Raamdeo Agrawal, chairman and co-founder of Motilal Oswal Financial Services, said the combination of relatively low valuations and strong earnings growth could position markets for “bumper returns” by next Diwali.