Indian shares dip in Diwali Muhurat session after a seven-day rally

Indian shares finished slightly lower in Sunday’s special Diwali Muhurat trading session, snapping a seven-session winning run as investors took some profits after last week’s steep rally, the Indian Express reported.

The Sensex shed 28.62 points to 80,999.40. The Nifty closed about 0.2% lower at 24,986.40. The Indian Express said it was the first time in nine years that the benchmarks had ended lower on Diwali. These ceremonial sessions usually last a little more than an hour and typically move in a 1% range.

A pause after a sharp week

The same newspaper said the benchmarks had risen 8–9% over the last week. Foreign portfolio investors bought about $4.6 billion of Indian shares this week through Friday, a reversal from the roughly $50 billion they sold from January 2024 through October, according to the report.

India has little direct exposure to the AI investment boom that has dominated the United States, Taiwan and South Korea. After those markets sold off, and after crude prices eased toward about $90 a barrel, foreign buyers treated Indian equities as an alternative. Pharmaceutical and healthcare stocks gained as much as 2% on Sunday, while IT and financial shares, including heavyweights ICICI Bank and HDFC Bank, weighed on the indices.

Caution beneath the festive open

Avinash Agarwal, head of equity at Bandhan Life, said the outlook for the coming Hindu business year, or Samvat, still looked constructive.

“From a market perspective, we believe the outlook for the coming Samvat remains constructive, albeit with expectations of moderate and more selective returns,” he told the Indian Express.

The India VIX volatility gauge rose for a third straight session on Sunday, ending 5% higher — a sign that unease persists despite the recent rally.