India’s benchmark stock indices were reported to have recorded their most substantial five-day gains since February 2021, as a combination of robust earnings in the financial sector and the weakening U.S. dollar was said to have significantly uplifted investor confidence. A nearly 8% rise had been observed in the Nifty 50 and BSE Sensex over five sessions, a surge that was largely attributed to renewed foreign investor interest, a decline in crude oil prices, and encouraging macroeconomic indicators.
On Monday, the Nifty 50 was reported to have advanced by 1.15%, reaching a level of 24,125.55, while the BSE Sensex was said to have risen by 1.09% to close at 79,408.50. These gains were recorded in continuation of a strong upward trajectory that had persisted throughout the week. The notable performance was fueled by heavyweight financial stocks, which were observed to have contributed disproportionately to the broader rally.
Market participants were reported to have been particularly optimistic about the banking sector, which comprises over 37% of the Nifty 50 index. It was indicated that financial stocks had soared by 9.5% over five sessions, marking new lifetime highs. Positive quarterly results from major lenders such as ICICI Bank and HDFC Bank were viewed as key contributors to this momentum. These institutions were said to have exceeded earnings expectations, thereby reinforcing market sentiment. On Monday alone, ICICI Bank was reported to have edged up by 0.2%, while HDFC Bank climbed by 1.1%, with both reaching fresh record highs.
G Chokkalingam, founder of Equinomics Research, was quoted as having said that the banking sector was expected to be the primary driver of earnings growth, as core operations like credit expansion were continuing to grow at double-digit rates. This assessment suggested that the fundamentals within the financial sector remained strong, offering a solid foundation for the ongoing rally.
Additional factors were also believed to have contributed to the bullish outlook. According to Dhiraj Relli, managing director and CEO of HDFC Securities, a blend of falling domestic inflation, a weaker U.S. dollar, and declining crude oil prices had created favorable conditions for Indian equities. Foreign portfolio investors were said to have shown renewed interest, attracted by India’s relative economic stability and strong corporate earnings.
Analysts further indicated that the recent rally had not yet exhausted its potential. Despite the gains, the market capitalization of Indian stocks was said to remain approximately 50 trillion rupees (equivalent to around $587.57 billion) below the record highs seen in September. This gap suggested that more upside could be realized, particularly if global conditions continued to support emerging market investments.
The depreciation of the U.S. dollar was also noted as a contributing factor. The dollar was reported to have dropped to a three-year low, enhancing the attractiveness of markets such as India, where dollar-denominated inflows become more favorable as the local currency strengthens. Additionally, a weaker dollar reduces the cost of imports for India, especially crude oil, thereby improving the country’s trade dynamics and investor appeal.
Other sectors also played a key role in the market’s strong performance. IT stocks, which generally see significant foreign investor participation, were said to have contributed over half of the gains seen in the Nifty 50 on Monday. Among them, Infosys was highlighted for its 2.2% jump, becoming the largest contributor to the IT index’s movement. Brokerage firms such as JM Financials were reported to have responded positively to Infosys’ fiscal 2026 revenue guidance, describing it as realistic and encouraging.
The strength of the rally was seen as reflective of broader economic optimism and the ability of India’s corporate sector to deliver resilient earnings in the face of global uncertainty. The combination of domestic macroeconomic stability, attractive valuations, and global investor appetite for emerging markets was viewed as a recipe for continued upward momentum.
In summary, Indian equity markets were buoyed by a confluence of factors during the past week, with financial and technology stocks leading the charge. While much of the gains were supported by tangible fundamentals such as strong earnings and favorable macroeconomic trends, the influence of global currency movements and foreign investor behavior was also considered vital. The possibility of continued growth was not ruled out, particularly as several blue-chip stocks remained below their long-term highs and investors continued to seek returns in high-growth markets like India.
