Indian benchmarks log biggest five-day gains in four years as financials rally

India’s benchmark indexes logged their biggest five-day gains since February 2021, boosted by heavyweight financials following better-than-expected earnings, while a weaker U.S. dollar further propped up investor sentiment.

The Nifty 50 gained 1.15% to 24,125.55 on Monday, while the BSE Sensex rose 1.09% to 79,408.50. In the last five sessions, the benchmarks have risen nearly 8%.

Financials, which comprise over 37% of the Nifty 50, have jumped 9.5% in five sessions and hit lifetime highs.

ICICI Bank and HDFC Bank jumped 0.2% and 1.1%, respectively, on Monday and hit fresh record highs after reporting better-than-expected earnings over the weekend.

Strong earnings from ICICI Bank and HDFC Bank lifted the banking index on Monday.

“The banking sector will lead earnings growth. It is one of the few sectors where the core business (credit growth) is growing in double digits,” said G Chokkalingam, founder of Equinomics Research.

Renewed foreign interest coupled with a decline in crude oil prices and the dollar as well as falling domestic inflation are fuelling a significant uptick in Indian equities, said Dhiraj Relli, managing director and CEO of HDFC Securities.

Financials haul Indian stocks to best week in over 4 years

There is room for further gains, Chokkalingam said, as the market capitalization of Indian stocks is still about 50 trillion rupees ($587.57 billion) away from September highs.

A weak dollar, which slid to a three-year low on Monday, is also seen strengthening the case for foreign inflows as it reduces India’s import bills and encourages investment into emerging markets.

Financial and IT stocks, which have high foreign portfolio investor exposure, contributed to more than half to the Nifty’s gains on Monday.

Among stocks, Infosys jumped 2.2% and was the biggest boost to the IT index as brokerages including JM Financials said its fiscal 2026 revenue guidance was realistic but encouraging.

The broader mid- and small-caps gained 2.5% and 2.2%, respectively.