India has reclaimed its position as the world’s fifth largest stock market by value, courtesy the record rally its indices have seen in the last ten trading sessions.Indian equities have gained around $640 billion in market value since late October, benefiting from weakening investor enthusiasm for AI-related stocks and a steep fall in oil prices.Bank of America has raised its estimate for India’s economic growth in the third quarter of 2026 to 7.7% year-on-year, compared with its earlier projection of 7.2%, a report published earlier this week showed.Moody’s too has lifted the growth forecast from 6.5% to 7%. Global brokerages have upgraded their outlook for the stock market.Also Read | Sensex erases US-Iran war losses, rises nearly 12% in just 10 sessions: What should your investment strategy be?
India back in top 5 league
The rally has lifted the market’s total value to approximately $5.4 trillion, allowing India to overtake Taiwan and reclaim its position as the world’s fifth-largest stock market, according to data compiled by Bloomberg.The shift in global investment flows has also set India apart from other markets. While overseas investors are returning to Indian equities, Taiwan recorded its highest-ever foreign fund outflows in October as AI-linked stocks came under a worldwide selloff.The developments prompted authorities there to introduce measures to support the market. South Korea, another major beneficiary of investor interest in technology stocks, has meanwhile dropped to ninth place, slipping behind Canada and the UK.Sensex climbed 772 points to reach its highest level in nearly nine months and the Nifty ending above 25,250 on Wednesday. Buying by foreign investors, corporate earnings for the July-September quarter that exceeded expectations, and a continued easing in crude oil prices are supporting the rally.Foreign investors have returned to Indian equities as net buyers in November. This follows two consecutive months of net outflows. The reversal has been supported by a sell-off in global markets linked to artificial intelligence investments, robust domestic earnings growth and attractive valuations among large-cap stocks.VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited says that the Nifty rally of 9.55% in seven trading sessions so far in November is being led primarily by the aggressive buying by the FIIs.“The tug of war between the FIIs and DIIs till November saw the FIIs on the sell side and DIIs on the buy side. Now the positions have been completely reversed with FIIs turning aggressive buyers and DIIs turning consistent sellers. This FIIs vs DIIs position will set the market trend in the near-term. FIIs have already invested Rs 65735 crores in Indian equities so far in November. This trend is likely to continue and has the potential to reach an all-time high number,” he says.“Impressive earnings growth as evidenced by the good Q2 results and the macro relief from lower crude prices (Brent around $92) will support the rally. DIIs may continue profit booking putting brakes on the rally. An important data to watch today will be the October CPI inflation number. There is a risk of the CPI inflation print around 6%. A 25 bp rate hike in December followed by another 25 bp hike in February are on the cards. This will impact rate sensitives,” he adds.
About The Author
