Indian Stock Markets Surge: Banking Stocks Lead the Rally

Indian stock markets closed on a positive note, marking gains for the fourth consecutive day, led by banking stocks. NSE Nifty reclaimed 20,800, with BSE Sensex up by 1.96%. Banking stocks soared on easing CPI data and a normal monsoon forecast, indicating a potential rate cut cycle by the RBI.

The Indian stock markets wrapped up Thursday's trading session on a high, as banking stocks spearheaded a robust rally. This marked the fourth consecutive day of gains for the indices, with the Nifty at the National Stock Exchange (NSE) reclaiming the 20,800 level, primarily boosted by financial stocks.

By the closing bell, the BSE Sensex stood impressively at 78,553.20, marking an increase of 1,508.91 points or 1.96%, while the Nifty climbed 414.45 points or 1.77% to settle at 23,851.65. Sectoral indices at the NSE noted widespread positivity, as sectors like telecom, PSU banks, oil and gas, pharmaceuticals, automobiles, energy, and private banks all experienced an upswing of 1 to 2% during the trading session.

The day's standout performers were the banking stocks, soaring on the back of easing Consumer Price Index (CPI) data coupled with a favorable monsoon forecast, sparking optimism for an extended rate cut cycle by the Reserve Bank of India. Bank Nifty marked its fourth consecutive session of rallying, closing the week with impressive gains of 6.5%. Notably, HDFC Bank's shares reached a new 52-week high.

Bajaj Broking Research emphasized the current market strength, highlighting the index's placement near an all-time high. According to their analysis, the index has breached a declining channel and achieved a rapid recovery from the past five-month decline within just two months, signaling robust market strength. Bajaj anticipates Bank Nifty advancing towards the 54,800-55,000 range in the upcoming weeks.

Market analysts pointed out that global factors, such as US President Donald Trump's announcement of tariff exemptions for smartphones and computers and the potential pause on auto tariffs, further fuelled positive sentiment. VLA Ambala, Co-Founder of Stock Market Today, noted a significant reduction in the selling spree by Foreign Institutional Investors (FIIs).

According to the recent F&O data, the index options recorded a level of 34,971.62, suggesting a possible reversal from a trading perspective. However, stock options remained under selling pressure, signalling stock-specific movements while maintaining an optimistic view on the index overall, as per Ambala.

(With inputs from agencies.)