The Sensex rose more than 1,200 points on Monday, its third straight day of gains, and closed at its highest level in almost two months. Reliance rose 12% after record results, and oil fell on hopes for Iran diplomacy. The day before the US election, investors bought heavily.
The Sensex rose 1,233.25 points, or 1.66%, on Monday to close at 75,692.78, its highest close since 7 September. The Nifty 50 gained 387.70 points, or 1.68%, to 23,440.80. It was the third straight day of gains, and the Sensex is now up about 4.6% over the past month.
The rally strengthened through the session. At midday the Sensex was up about 860 points. It finished more than 1,200 points higher, even after some selling in the last hour.
Reliance’s rise
Reliance Industries did most of the work. Its shares rose about 12%, a very large move for India’s most valuable company, after it reported record quarterly profit on Friday evening. Because Reliance is the largest Sensex stock, that move alone accounted for a significant part of the index’s gain.
There were three reasons. First, the oil-to-chemicals business had its best quarter ever, with EBITDA up 68% as global fuel shortages raised refining margins. Second, Jio Platforms’ listing at more than ₹13 lakh crore has put a clear market value on Reliance’s majority stake, which analysts have long said was undervalued. Third, investors largely set aside the 24% fall in retail profit, treating it as a temporary investment phase.
That cuts both ways. A 12% rise in one session means much of the good news is now priced in. If oil falls further and refining margins decline, the O2C business that drove the rise will weaken.
Oil helped too. Brent fell more than 2% to below $110 after reports that President Trump wants to give diplomacy with Iran more time before deciding on strikes after Tuesday’s election. Iranian and Qatari officials held a third day of talks. Lower oil helps India’s import bill, the rupee and inflation, and oil marketing companies rose strongly again.
Pharma was the only major sector to end flat, down 0.07%.
Reports noted improving foreign investor activity alongside strong results and lower oil. After a record ₹3 lakh crore of outflows this year, even modest foreign buying would help, especially in large companies like Reliance where foreign funds are underweight.
Tuesday is the test
The rally has a clear risk. Tuesday is the US midterm election. Markets are now priced for a calm outcome, with talks continuing and no new strikes. If Washington changes course after the vote, oil could rise quickly and reverse much of these three days’ gains.
Tuesday also brings the listings of BLS Polymers and SFC Environmental, and Thursday is the weekly derivatives expiry. Dhanteras falls on Friday.
For now, the Sensex has recovered from its October lows, oil is easing and the largest company in the market has just reported its best quarter ever. Whether that holds depends on events in the Gulf after the US election.
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