New Delhi, Nov. 5 -- Banking and financial stocks rallied sharply on Thursday, November 5, outperforming the broader market as investors cheered Democrats' victory in the US midterm elections, renewed foreign investor buying and a steep decline in crude oil prices.

The election outcome raised hopes of reduced geopolitical tensions and potentially lower trade uncertainty, while Brent crude's slide to a two-month low provided additional relief to the oil-import-dependent Indian economy.

The Nifty Financial Services index surged nearly 3% intraday, while the Nifty Bank index advanced 2.2%, outperforming the Nifty 50, which gained nearly 2%. The rally reflected improving investor appetite for financial stocks amid a broader recovery in dome...