 "Nifty reclaims 25k, Sensex ends above 82k on RBI dividend, monsoon")
Domestic markets rallied for a second day on Monday as monsoon rain hit southernmost state of Kerala eight days earlier than usual, providing the promise of a bumper harvest and relief from a gruelling heatwave. Investor sentiment was also boosted by easing global trade tensions and the Reserve Bank of India's record dividend transfer, which reaffirmed prospects of sustained fiscal consolidation.
The Nifty 50 index closed 0.6 per cent higher at 25,001, while the 30-share BSE Sensex rose 0.56 per cent to close at 82,176.45. During the previous session, both indices had risen about a per cent each.
US President Donald Trump backed off his threat to impose 50 per cent tariffs on European Union (EU) imports, easing trade concerns, potentially hinting "that the US may reduce its aggression in the trade war, which is a positive," according to G Chokkalingam, founder and head of research at Equinomics Research and Advisory.
The US and EU now have time until July 9 to work on a trade deal.
The RBI's board approval to transfer a record ₹2.69 trillion ($31.6 billion) as surplus to the federal government for the financial year ended in March could help the government reduce its fiscal deficit drastically, added Chokkalingam.
All 13 major sectors logged gains.
The Nifty Metal index jumped about 1 per cent, as a weaker US dollar and Trump's reprieve boosted the appeal of commodities. The Nifty Auto, Nifty Pharma and Nifty IT all gained about 1 per cent, while Nifty Financials added 0.4 per cent.
The Nifty Midcap 100 and the Nifty Smallcap 100 indices rose 0.7 per cent and 0.4 per cent, respectively. Overall market breadth was positive with 2,265 stocks advancing and 1,816 declining on the BSE. Foreign portfolio investors (FPIs) were net buyers to the tune of ₹136 crore, while their domestic counterparts pumped in ₹1,746 crore. ALSO READ: Microfinance disbursements drop 38% in March quarter, shows data
Analysts said domestic fundamentals — including projected GDP growth of more than 6 per cent in FY26, an early onset of the southwest monsoon and moderating inflation — remain supportive, despite global uncertainty.
The monsoon, the lifeblood of the country's $4 trillion economy, delivers nearly 70 per cent of the rain that India needs to water farms and replenish aquifers and reservoirs. Nearly half of India's farmland, without any irrigation cover, depends on the annual June-September rains to grow a number of crops.
“Fertiliser, agrochemical, FMCG, auto and rural finance sectors would remain in focus due to the early onset of the monsoon and forecasts of above-average rainfall. The RBI dividend would significantly boost the government's finances and help in maintaining the fiscal deficit target for FY26,” said Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services.
Among individual stocks, JSW Steel rose 2.4 per cent after the Supreme Court of India paused the liquidation proceedings of Bhushan Power and Steel, weeks after it rejected JSW Steel's deal to acquire the debt-ridden firm and ordered its liquidation.
Bajaj Auto also gained 2.4 per cent after the two-wheeler maker entered a call option deal with Austria's Pierer Group to take a controlling stake in the troubled motorcycle maker KTM.