Bank stocks lift Indian markets as crude prices ease, RBI decision eyed

Mumbai: Indian stocks rose as oil prices declined amid reports of increased supplies and positive macroeconomic cues. The Sensex and Nifty extended Monday's gains on Tuesday, led largely by banking stocks.

The Sensex gained 685.34 points, or 0.95%, to close at 73,067.81, while the Nifty 50 advanced 220.35 points, or 0.9%, to settle at 22,776.10.

Markets will look to the Reserve Bank of India's monetary policy announcement on Wednesday for further direction, said Sunny Agrawal, head-fundamental research, SBI Securities. RBI is expected to raise the policy rate by 25 basis points to 5.50%, the first increase since February 2023, according to an ET poll.

Oil prices slipped on Tuesday as fresh data pointed to rising crude flows out of West Asia, while the Group of Seven's decision to release emergency reserves eased concerns over supply disruptions. Brent crude futures were down $2.77, or 2.8%, at $97.55 a barrel. The US 10-year Treasury yield hovered near 5.31%, close to multi-decade highs, as volatility in the bond market persisted.

The broader markets ended higher, with the Nifty Midcap 150 index rising 1.03% and the Nifty Smallcap 250 index gaining 1.4%. India VIX, the market's volatility gauge, declined 8.03%.

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Financials, banks and private bank indices rose 0.6-1.1%. Axis Bank gained 1.4%, while Kotak Mahindra Bank surged 3.8% after both lenders reported growth in quarterly advances and deposits.

Within the Nifty stocks, Trent, BSE and Kotak Mahindra Bank emerged as the top gainers. Coal India, Tech Mahindra and Max Healthcare faced selling pressure and were the key laggards. Among sectoral indices, Nifty IT, PSU Banks and realty were losers, while the remaining indices ended higher. Chemicals, pharma, oil and gas and FMCG emerged as the major outperformers.

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On the BSE, of the 4,623 shares that traded, 2,768 advanced, 1,619 declined and 236 remained unchanged.

Foreign portfolio investors were net sellers of equities worth ₹2,961 crore on Tuesday, while domestic institutional investors were net buyers to the tune of ₹5,088 crore.