Market Wrap: D-St ends higher as RBI easing, U.S. jobs data fuel rally; Sensex adds 256 pts, Nifty hits 8-month high
Indian benchmark indices ended Monday's session in the green, with the banking index surging to a record high during the day, lifted by the Reserve Bank of India's surprise policy easing, upbeat U.S. jobs data, and progress in U.S.-India trade talks.
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Indian benchmark indices ended Monday's session in the green, with the Nifty climbing to an eight-month high, while the banking index touched a record intraday peak. The rally was driven by the Reserve Bank of India's surprise policy easing, stronger-than-expected U.S. jobs data , and progress in U.S.-India trade talks.The BSE Sensex jumped 256.22 points, or 0.31%, to 82,445.21, while the NSE Nifty rose 100.15 points, or 0.40%, to close at 25,103.20.The market capitalization of all listed companies on the BSE increased by Rs 3.06 lakh crore to Rs 455.07 lakh crore.Banking and financial stocks led the rally, buoyed by the Reserve Bank of India's surprise policy easing and shift to a neutral stance. The Bank Nifty index climbed to an all-time high of 57,049.50 during the session, crossing the 57,000 mark for the first time ever, before settling 0.5% higher.Private banks saw strong buying interest, with the Nifty Private Bank index closing over 1% higher. RBL Bank, Bandhan Bank, and Axis Bank were among the top gainers, rising between 2% and 7%.From the Sensex pack, Kotak Mahindra Bank, Bajaj Finance, Axis Bank, Bajaj Finserv, IndusInd Bank, and Maruti Suzuki rose between 1.5% and 3.2%, contributing significantly to the benchmark's gains.The rally came on the heels of the RBI's larger-than-expected 50 basis point repo rate cut and a 100 basis point CRR reduction announced on Friday, measures aimed at reviving credit growth and supporting bank margins. Both the Sensex and Nifty had gained around 1% that day in response to the policy surprise.Outside the financial space, MCX jumped 7% after receiving regulatory approval to launch electricity derivatives, a first for India and a milestone for the country's energy trading landscape.Hyundai Motor India shares surged 4.8% to close higher on the day, after hitting a fresh all-time high of Rs 1,986.60 on the BSE during the day. The stock surpassed its previous listing-day peak of Rs 1,970, recorded on October 22, 2024, amid robust trading volumes.Broader market sentiment was equally strong. The Nifty Midcap 100 and Nifty Smallcap 100 rose 1.1% and 1.6%, respectively, outperforming the headline indices as investor appetite extended beyond blue chips.Financial stocks extended their rally in Indian markets, driven by the RBI's supportive aggressive policy of rate and CRR cut, said Vinod Nair, Head of Research, Geojit Investments, adding that "these actions have boosted investor confidence and are expected to enhance liquidity in the near to medium term, especially in midcaps.""The positive U.S. jobs data and renewed optimism over U.S.-China trade talks lifted global sentiment. Domestically even large caps expressed renewed momentum led by FIIs inflows," said Nair.The Nifty has finally broken out of its prolonged consolidation on the daily timeframe, said Rupak De, Senior Technical Analyst at LKP Securities, adding that following the breakout, a rise towards 25,350 looks likely."A decisive move above this level could trigger a rally towards 25,700. On the downside, support is placed at 24,850; a breach below this level may lead to a shift in sentiment," said Nair.A rally in Asian equities lifted global markets to record highs on Monday, while the dollar pulled back ahead of closely watched trade talks between the United States and China in London.MSCI's broadest index of world shares rose 0.2% to a new peak of 893.88, as European markets opened steady and Asian indices closed in the green. Japan's Nikkei advanced nearly 1%, China's blue-chip CSI300 added 0.3%, and the Shanghai Composite Index climbed 0.4%.Investor sentiment was buoyed by optimism around U.S.-China trade relations, with top trade officials from both countries set to meet in London. The talks are expected to focus on critical minerals, a sector in which China plays a dominant role.In the U.S., nonfarm payrolls data released Friday showed job growth in May slowed less than expected, reinforcing hopes of economic resilience.However, weak economic data from China highlighted ongoing strain from the prolonged trade tensions. China's export growth eased to a three-month low in May, while factory-gate prices declined at their steepest pace in two years, according to data released Monday.Market attention now shifts to U.S. inflation data due Wednesday, which could influence expectations for future interest rate moves by the Federal Reserve. The Fed remains in a communications blackout ahead of its June 18 policy decision.Meanwhile, gold edged up 0.35% to $3,322 per ounce, partially recovering from a 1.3% slide on Friday.The Indian rupee settled marginally stronger at 85.62 against the U.S. dollar on Monday, mirroring subdued movement across Asian currencies, even as the greenback eased ahead of high-stakes U.S.-China trade talks in London.The dollar index slipped 0.2% to 98.9, while most Asian currencies posted modest gains in a cautious trading session.Oil prices held largely steady on Monday as investors looked ahead to upcoming U.S.-China trade talks in London, hoping a breakthrough could improve the global economic outlook and support energy demand.By 0940 GMT, Brent crude futures inched up 4 cents to $66.51 a barrel, while U.S. West Texas Intermediate (WTI) crude edged down 1 cent to $64.57.
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