Banking stocks lift markets for sixth day; Sensex, Nifty at 4-month highs

Shrugging off weak global cues, the benchmark Sensex and the Nifty rose for a sixth day to their highest levels in nearly four months, underpinned by gains in banking stocks.

 

The Sensex closed at 79,596, up 187 points, or 0.24 per cent, while the Nifty 50 index added 42 points, or 0.2 per cent, to end at 24,167. This is the highest close for both indices since January 2. In the past six trading sessions, the Sensex and the Nifty have jumped close to 8 per cent. Meanwhile, the Bank Nifty closed at a new record high for a second day at 55,647, up 0.6 per cent. In the past six sessions, the gauge for the performance of the banking sector has soared 11 per cent.

 

The rally comes after the Reserve Bank of India on Monday directed lenders to assign a lower-than-proposed buffer rate of 2.5 per cent on digitally linked deposits and reduced the 'run-off' factor on wholesale deposits into banks from non-financial entities.

 

IIFL Capital estimated that these measures could boost banks' net interest margin between 1 basis point and 18 basis points and add about 1-4 per cent to net profit.

 

HDFC Bank and ICICI Bank hit record high levels for a third straight session, finishing above Rs 15 trillion and Rs 10 trillion in market value, respectively. Kotak Mahindra Bank also hit a lifetime high, rising 1.2 per cent.

 

Most global markets drifted lower on Tuesday as United States President Donald Trump's fresh attacks on Federal Reserve Chair Jerome Powell added more strain to markets already shaken by trade war worries. The Dollar index hit a three-year low, while gold prices touched $3,500 an ounce.

 

Shares in information technology companies, which earn a large chunk of revenue from the United States, fell with the Nifty IT index dropping 0.6 per cent amid the dollar's weakness.

 

The broader mid- and small-caps gained 0.7 per cent and 0.8 per cent, respectively.

 

Among other stocks, consumer firms Hindustan Unilever and ITC rose over 2 per cent each after UBS upgraded the stocks to "buy" from "neutral" on strong FY26 growth prospects.