Stock markets rally as banks and midcaps power rebound

Analysts said recent corrections had made valuations attractive, prompting DIIs to step in and absorb selling pressure

News Service mumbai

Domestic equity markets staged a strong rebound on Monday, driven by value buying across oversold sectors such as banking, realty and midcaps, even as underlying risk sentiment remained cautious amid global uncertainties.

Benchmark indices recovered sharply after early losses, supported by easing crude oil prices and renewed buying interest in rate-sensitive stocks. The BSE Sensex rose 1.07% to settle at 74,106.85, after surging nearly 888 points during the day. The NSE Nifty also gained 1.12% to close at 22,968.25, reflecting broad-based strength across sectors.

The rally was largely led by financial stocks, with banking counters witnessing strong accumulation at lower levels. Analysts said recent corrections had made valuations attractive, prompting domestic institutional investors to step in and absorb selling pressure, particularly from foreign institutional investors.

Among Sensex constituents, Trent emerged as the top gainer, rising nearly 8%, followed by gains in Axis Bank, Titan, Larsen & Toubro, UltraTech Cement and Bajaj Finance. On the flip side, Reliance Industries, HCL Tech and Sun Pharma ended lower, capping the overall upside.

A modest decline in global crude oil prices also supported sentiment. Brent crude slipped 0.71% to $108.3 per barrel amid reports of possible ceasefire efforts in the ongoing West Asia conflict. Lower oil prices typically ease inflationary concerns and support rate-sensitive sectors such as banking and real estate.

Market experts, however, cautioned that volatility is likely to persist in the near term, with multiple global and domestic triggers lined up. Key events such as the upcoming RBI policy decision, US inflation data and geopolitical developments are expected to keep markets largely headline-driven.