Nifty’s festive comeback: Can the bulls keep the party going?

It’s a rare day on Dalal Street: the bulls are prancing - and how!

The rupee, Asia's best-performing currency over the past five days, has added to the bullish mood around the Nifty. Two other developments have further lifted sentiment. First, the Cabinet has approved the sale of a majority stake in IDBI Bank to Canada’s Fairfax, easing concerns over policy paralysis at the Centre.

Second, Jio Platforms, India’s second-largest telecom services provider, announced a Rs 30,000 crore initial public offering. Owned by Reliance Industries Ltd (RIL), India’s largest company by market capitalisation and a heavyweight in the Nifty, Jio’s IPO could help revive interest in the parent company. RIL has lagged the broader market, and any improvement in sentiment towards the stock could lend further support to the Nifty, at least in the near term.

The sharp slide in South Korea’s KOSPI Index, amid a pullback in the AI hardware trade, has also made Indian equities more attractive. The KOSPI has declined for seven consecutive sessions and in 10 of the past 12, as foreign investors book profits in heavyweight stocks such as Samsung Electronics and SK Hynix, triggering heavy selling across Korean markets.

Is the worst over for the Nifty?

It seems so, if you consider the growing body of evidence favouring out-of-work bulls. While it is still early, the US 10-year yield has dipped to a one-month low. Coupled with a strong rupee, supported by major steps taken by the central bank, this is a significant positive for Indian equities. It could prompt foreign investors, who have been heavy sellers on Dalal Street, to rethink their stance. FIIs moved more than $40 billion out of Indian equities and back to the US, as well as into the broader AI-led investment theme in the Korean, Taiwanese and Japanese markets. That is why the sell-off in the KOSPI, now below its 200-DMA, comes as such a relief to Indian stocks.

What could go wrong?

Oil.

The Middle East war has flared up yet again, this time drawing in Saudi Arabia, the world’s second-largest oil producer and a global linchpin in keeping supply chains, factories and national economies running.

India imports at least 4.8 million barrels of oil a day, or 88% of its requirements, to fuel the world’s fastest-growing major economy, which spent $134 billion on oil and oil-related imports in FY26. Crude oil prices for the Indian basket averaged $71 a barrel last financial year. They are now above $100 a barrel, and every one-dollar rise in oil increases India’s import bill by $1.1 billion.

So, Brent crude is what Nifty bulls need to watch. A dip there, too, could unleash an epic party on Dalal Street during the festive season!