Indian stock markets have hit fresh lifetime highs on November 27 after 14 months. Analysts have pointed out four key factors that boosted the stock markets and nudged the benchmark indices Sensex and Nifty toward new highs.
Nifty 50 gained around more than 105 points (over 0.4 percent) to its new record high level of 26,310, breaking its previous record of 26,277 which it had hit in September last year. Sensex, meanwhile, gained over 446 points (around 0.5 percent) to cross the 86,000-mark for the first time ever.
Later, the benchmark indices erased some gains by the end of the day. Nifty 50 closed over 10 points (0.04 percent) higher at 26,215.55, while Sensex closed 111 points (0.13 percent) higher at 85,720.38.
Here are four key factors behind Nifty and Sensex recording sharp gains in recent times:
1) Strong domestic inflows:
Analysts noted that Indian stock markets have seen strong domestic inflows despite global uncertainty on the back of US President Donald Trump's harsh tariffs and geopolitical tensions. Kalp Jain, Research Analyst at INVasset PMS said the depth of domestic liquidity is supporting the markets.
Steady flows from retail and systematic investment plans have reduced reliance on foreign capital, making the market less sensitive to abrupt global risk-off phases, Jain said.
Naren Agarwal, CEO of Wealth1 also said that the depth of domestic investor participation today provides a powerful cushion against global risk-off sentiment.
"A large part of the buying today is coming from domestic investors who aren't reacting to every global headline. SIP flows are at an all-time high, banks are well-capitalised, and corporate earnings have held up considerably better than most expected. That, combined with steady GDP growth and moderating inflation, gives you a market that can absorb global shocks without losing its footing," said Siddharth Maurya, Founder & Managing Director, Vibhavangal Anukulakara.
The strong domestic participation has helped cushion the outflow of FIIs seen earlier, said Shravan Shetty, Managing Director, Primus Partners. He added that the stable macro environment and high retail participation have helped drive the domestic inflow.
Ravi Singh, Chief Research Officer from Master Capital Services, added that the recent improvement in retail sales trends and demand assured that markets undergo a bullish period, especially in the discretionary segments like cars and consumer durables, supported by the festive season and the positivity over GST cuts.
"Consumption trends, urban spending, and government-led capital expenditure continue to hold firm, creating a buffer against weakness in global trade and external shocks. This internal growth engine has helped Indian equities decouple to some extent from global volatility," he added.
2) Strong macros:
Analysts pointed out that India’s strong macroeconomics are also boosting the markets where every dip is being bought. "India's macro indicators—such as stable inflation trends, healthy foreign exchange reserves, and steady manufacturing activity—are also contributing to a sense of economic stability at a time when several major economies are dealing with aggressive rate pressures and recession concerns," Jain said.
Ross Maxwell from VT Markets also noted that the country’s macro fundamentals have improved considerably over the past decade. “India’s current-account deficit has narrowed, and structural reforms such as the goods and services tax and insolvency legislation have strengthened economic resilience. The central bank has proven that it is prepared to act and the government is focused on fiscal repair, which increases investor confidence and provides policy stability,” he said.
Earlier yesterday, International Monetary Fund (IMF) said that India will remain one of the world’s fastest-growing major economies, supported by strong domestic demand and improving structural fundamentals. The staff appraisal notes that India’s outlook could strengthen further if pending trade agreements are concluded and reform momentum continues.
India is now projected to become a $5 trillion economy only in FY29, a year later than previously estimated, according to the IMF’s latest staff consultation report released on November 26.
3) Optimism over earnings recovery:
Ravi Singh from Master Capital Services noted that RBI's positive monetary policy, together with the capex push in the economy, has benefited the corporates with increase in topline as well as profitability.
"Indian corporates displayed strong performance in Q2 results with several sectors delivering double-digit profitability growth numbers. Further, sectors like auto, banking, discretionary goods and FMCG have gained from improved outlook, aided by a series of favourable measures. Confluence of favourable measures and domestic resistance has set the stage for sustained growth in the coming quarters," the analyst said.
Early signs of an earnings recovery in the September quarter and expectations of further improvement in the second half of FY26 have created a constructive market view, Amit Premchandani, fund manager at UTI Mutual Fund, told Reuters.
4) Easing valuations
After hitting an all-time high of 26,277 on September 27 last year, Nifty fell around 17 percent to drop below the 22,000-mark in March-April. This came despite global markets recording gains during the same period. According to analysts, the underperformance seen in Indian stock markets during this period may have kept valuations reasonable.
"The MSCI India Index has risen only around 6% this year, considerably lagging U.S. AI-driven indices and several emerging markets that delivered 20–35% returns. This relative underperformance has kept Indian valuations more reasonable. With fewer speculative gains priced in, Indian equities face lower correction risk because there is simply less excess to unwind," Bajaj Broking said.
Naren Agarwal, CEO of Wealth1, said that Indian stock markets are witnessing renewed foreign interest, supported by more attractive valuations in large caps and India’s consistent earnings visibility compared to other emerging markets. With policy stability, a strong banking system, and sustained domestic demand, India stands out as one of the few markets where long-term conviction outweighs short-term uncertainty, he said.
"The outflows from earlier this year have brought India back inline line with other Emerging Markets, making it a more attractive proposition given the domestic market strength, which also is helping to support them in the current environment," said Ross Maxwell, Global Strategy Lead at VT Markets.
Consolidation in the benchmarks over the past 14–15 months has bridged the gap between earnings and valuations, creating attractive entry points, Reuters quoted Aditya Sood, fund manager at InCred Asset Management, as saying.
The Nifty now trades at 22.3x-22.7x 12-month forward price-to-earnings, down from 23x-25x seen 14 months ago, reported Reuters. An earnings slump last year forced a sharp valuation correction that brought down multiples to 18.5x-19x in early 2025, it added.
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