Indian Stocks Extend Rally as Reliance Earnings and Tax Comments Lift Sentiment

The recovery was already gathering pace before Reliance Industries delivered its earnings boost. On October 29, Equitymaster reported a 905-point Sensex rally, with the Nifty above 22,900.

By October 30, the Nifty had reclaimed 23,000 for the first time in eight sessions. It closed at 23,053, up 0.51%, while the Sensex rose 0.42% to 74,459.53, according to Business Line. IT and pharmaceutical stocks led that session's gains.

This was a rebound from weakness, not an uninterrupted bull run. On October 31, Economic Times Business & Economy reported that the Nifty had recovered above its 200-week moving average at 22,700. Easing volatility and buying at lower levels supported the recovery, but bearish momentum indicators still warranted caution.

Oil remained a concern heading into November. On November 1, Economic Times Business & Economy reported crude prices above $117 a barrel and weakness in broader markets, despite gains in the benchmark indices.

The backdrop improved on November 2. NDTV reported Brent crude easing to $111 a barrel after a report signalling a US diplomatic push on Iran. Its market preview also highlighted rising GST collections.

Reliance then provided a powerful company-specific catalyst. Bloomberg reported that earnings beat analyst estimates, driven by strong performance in the company's oil-to-chemicals business. News18 reported that its shares surged 11.6% to ₹1,300, taking its market capitalisation above ₹17.59 lakh crore.

The broader market rose sharply that day. Business Line reported a 1.6% Sensex gain and the Nifty above 23,400, with falling crude prices and improving foreign institutional investor flows also supporting buying. Times of India put the Sensex advance at about 1,200 points.

On November 3, the rally continued alongside a new policy signal. Bloomberg reported that Finance Minister Nirmala Sitharaman would consider concerns about taxes on stocks. Times now reported that the Sensex opened more than 500 points higher at 76,288.65, while the Nifty opened at 23,582.25.

The latest November 3 reports put the Nifty above 23,600 and the Sensex up nearly 730 points during trading, according to Economic Times Business & Economy. Those are trading updates, not confirmed closing levels.

The gains were not confined to Reliance. Business Line reported IndiGo up 2.99% and Shriram Finance up 1.99%, while Equitymaster named HUL and HDFC Bank among the leading gainers.

The immediate picture is stronger, but the recovery follows a longer period of pressure. Bloomberg described a prolonged equity-market slump that had intensified pressure on policymakers to restore investor confidence. Several strong sessions do not, by themselves, establish that the weakness has ended.

The clearest policy question is whether Sitharaman's willingness to consider stock tax concerns produces a specific proposal. The remarks reported by Bloomberg were not an announcement of a tax change.

Oil prices and foreign investor flows also remain important tests of the recovery. Business Line identified both as supports for Monday's rally. Whether those supports persist will help determine if the advance can extend beyond the initial Reliance earnings boost.