Banking Stocks Lead Market Rebound as Sensex Rises Nearly 400 Points

By Mahima Katal Mumbai, June 9: Indian benchmark indices snapped a two-day losing streak on Tuesday, with the Sensex climbing nearly 400 points and the Nifty reclaiming higher ground as banking and financial stocks led a broad-based market recovery.

Investor sentiment improved amid easing geopolitical concerns in West Asia, softer crude oil prices and positive cues from global markets. However, continued foreign institutional investor (FII) selling kept gains in check.

The 30-share BSE Sensex advanced 394.50 points, or 0.54 per cent, to close at 73,918.76, after touching an intraday high of 74,035.41. The NSE Nifty gained 119.10 points, or 0.52 per cent, to settle at 23,242.10.

Market breadth remained positive, with 2,782 stocks advancing, compared to 1,423 declines on the BSE.

The rally was driven primarily by banking and financial stocks. Shares of InterGlobe Aviation, State Bank of India, ICICI Bank, Axis Bank, Bajaj Finance and Asian Paints emerged as the top gainers among Sensex constituents.

On the other hand, Titan, NTPC, Power Grid and Tech Mahindra ended lower.

Analysts attributed the rally in banking counters to recent measures announced by the Reserve Bank of India (RBI) to improve liquidity conditions and lower funding costs across the banking system.

The PSU banking segment significantly outperformed broader markets, with investors accumulating shares of major public sector lenders such as Bank of Baroda, Canara Bank and Bank of India.

Reflecting this trend, the BSE PSU Bank Index surged 3.83 per cent, while the MidSmall Private Banks Quality Tilt Index jumped 3.06 per cent. The Bankex rose 2.18 per cent, followed by gains in Services, Realty and Financial Services indices.

Broader markets also participated in the rally. The BSE MidCap Select Index gained 1.50 per cent, while the SmallCap Select Index advanced 1.33 per cent.

Meanwhile, information technology and utility stocks lagged behind the broader market, limiting overall gains.

Global sentiment received a boost after signs emerged that tensions between Israel and Iran may be easing, reducing concerns over disruptions to energy supplies. The development contributed to a decline in oil prices, with Brent crude falling 1.66 per cent to USD 92.69 per barrel.

Asian markets recovered sharply after recent losses. South Korea's Kospi surged more than 8 per cent, Japan's Nikkei climbed over 2 per cent and China's Shanghai Composite ended higher. European markets also traded in positive territory, while US markets closed mostly higher overnight.

Despite the recovery, analysts cautioned that market sentiment remains fragile. Continued FII outflows and elevated global bond yields continue to weigh on investor confidence amid uncertainty surrounding global economic conditions.

According to exchange data, foreign institutional investors sold equities worth Rs 5,555.67 crore on Monday.

The rebound follows a sharp sell-off in the previous session, when the Sensex had plunged 719 points and the Nifty had dropped 244 points amid concerns over geopolitical tensions and rising crude oil prices.