Indian equity markets surged to a 10-week high on Monday, propelled by a rally in heavyweight HDFC Bank following a robust quarterly business update and a decline in crude oil prices that eased inflation concerns, according to a report in Business-Today.
Key Indices and Drivers
The Nifty 50 rose 0.7% to 24,430, while the Sensex climbed 0.7% to 78,285, Business-Today reported. Both indices advanced 2.4% over four sessions, marking their highest close in ten weeks. The rally was supported by a narrowing rainfall deficit, a drop in oil prices amid easing West Asia tensions, and signs that foreign investors are reassessing their India positioning after a prolonged period of selling.
Prateek Agrawal, MD and CEO at Motilal Oswal AMC, said: "A drop in oil prices to Feb levels should enable the large cap indexes to rise to Feb levels as well." Lower crude prices also buoyed stocks in Europe and the US by reducing inflation risks, Business-Today noted.
Sector Performance: Banking Stocks Lead
HDFC Bank, India's largest private lender by market value, climbed 3.6% after reporting a 15.4% increase in gross advances during the June quarter. The stock alone contributed about 56% to the Nifty's gains on Monday, according to the report.
Other lenders also rallied after sharing business updates over the weekend. The following table summarises the performance of key banking stocks:
| Bank | Price Change | Key Driver |
|---|---|---|
| HDFC Bank | +3.6% | 15.4% rise in gross advances in June quarter |
| IndusInd Bank | +3.6% | Positive business update |
| Bandhan Bank | +3.4% | Positive business update |
| Karur Vysya Bank | +4.2% | Positive business update |
| Kotak Mahindra Bank | -3.9% | Softer growth in April-June quarter |
| State-owned lenders (index) | -0.9% | Third straight session of losses |
Kotak Mahindra Bank bucked the trend, losing 3.9% after posting softer growth for the April-June period, capping gains for the bank index, which rose only 0.6%, Business-Today reported. Meanwhile, state-owned lenders declined 0.9%, marking a third consecutive session of losses.
Global Context and Outlook
The prospect of lower energy prices reducing inflation risks supported equity markets in Europe and the US as well, Business-Today noted. The combination of strong domestic earnings momentum and easing macro headwinds—such as lower crude oil and a narrowing rainfall deficit—has bolstered investor confidence. The return of foreign investors, who had been selling Indian equities for an extended period, is seen as another positive signal for the market's near-term trajectory.
With the Nifty and Sensex already at 10-week highs, market participants will watch for further cues from corporate earnings, global oil price movements, and monsoon progress to gauge whether the rally can sustain.
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