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Benchmark index Nifty rallied a whopping 2.5% on November 5 to reclaim the psychologically important 24,500-mark as oil prices slid on hopes that a Democratic victory in the US midterm elections could hasten the end of the US-Israeli war on Iran.

Market sentiment was also bolstered by signs that foreign investors were returning to India. Foreign investors bought shares worth Rs 7,284 crore on Wednesday, as per provisional data.

This was one of their biggest single-day buys in India since October 2025 and adds to November's net inflows of $1.57 billion.

"The victory of Democrats, who are seen as favouring tighter regulations on AI, could propel foreign investors to look beyond this theme in the future and benefit markets like India," said Dharmesh Kant, head of equity research at Cholamandalam Securities.

Kant added that the Indian market is showing signs of recovering from two years of underperformance against most global peers, as stars seem to be aligning on key factors like crude oil prices and foreign flows.

At 2:10 pm on November 5, Nifty was trading 2.5% higher at 24,560 while Sensex climbed a whopping 2,100 points to trade at 79,400.

Where are markets headed after the massive six-day rally?

"Continued rise cannot be ruled out, aiming for the internal trendline at 24,835. The play for the day would be to ride the volatility that could set in, if unable to clear the 24,378 mark. That said, downsides aiming 23,700 could follow only on inability to float above 24,079-130 region," said Anand James, Chief Market Strategist, Geojit Investments Limited.

"We are of the view that the short-term market texture is positive, but due to temporary overbought conditions, we could see range-bound activity at higher levels. For day traders, buying on intraday dips and selling on rallies would now be the ideal strategy. On the downside, 23,800-23,750/76,700-76,500 would act as key support zones, while on the higher side, 24,200/78,000 and 24,400/78,600 would be the key resistance areas for the bulls. Any dip towards, 23,800/76,700 would be an opportunity to enter in select stocks with a short term to medium term view," said Shrikant Chouhan, Head Equity Research, Kotak Neo.

"Index holding above the 24,000 levels will open fresh leg of up move towards 24,400 and 24,700 levels in the coming sessions. Only a formation of lower high and lower low in daily chart will signal a pause in the current strong rally. The short-term support in Nifty is revised higher towards 23,200-23,400 levels being the confluence of the 50 days EMA and the current week breakout area, holding above the same will keep the overall bias positive and dips should be used as a buying opportunity," said Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking.

"With tailwinds for the economy getting stronger, the bullish trend in the market is set to continue. The strongest positive for the market is the sharp 10% fall in Brent crude to around $94 level. This decline is on hopes that a resolution to the US-Iran conflict is likely soon since this conflict and the consequent high crude prices contributed significantly to the Republican rout in the mid-terms.

"The decline in crude prices is happening when the Indian economy is showing great resilience and corporate earnings are showing significant improvement. This, and the hope that LTCGs tax may be abolished in the coming Budget, has completely changed the FII’s stance towards India. During the last four trading days, FIIs bought equities for Rs 20,834 crore in the cash market and, importantly, the buying volume is increasing steadily. There is more short-covering to happen in large-caps and, therefore, expect further rebound in large-caps led by the banking/financial majors. At higher levels, profit booking may emerge as DIIs are showing an inclination to sell on rallies," said V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.