India’s equity benchmarks rose to more than three-month highs on Thursday, led by Nestle’s India unit and Axis Bank after their earnings, while rate-sensitive sectors rallied on growing expectations of monetary easing.
Indian markets have staged a comeback in recent months, powered by tax and interest rate cuts as well as domestic inflows. Record foreign outflows, weak earnings, and global headwinds had pushed them into a correction in late 2024 with weakness persisting into early 2025.
On the day, the Nifty 50 rose 1.03% to 25,585.3 and the BSE Sensex added 1.04% to 83,467.66. The indexes are less than 3% below their record highs hit in September 2024.
“With the government’s tax reductions, central bank’s rate cuts and normal monsoons, the conditions are now conducive for a strong revival in economic and earnings growth momentum, which is boosting the market sentiment,” said Amnish Aggarwal, director research of institutional equities at PL Capital.
Fifteen out of the 16 major sectors logged gains.
Private banks climbed 1.5%, led by a 2.3% jump in Axis Bank after the lender’s operating performance improved despite a larger-than-expected drop in profit.
Other rate-sensitive sectors such as auto sales and realty gained 1.3% and 1.9%, respectively, after the monetary policy committee’s minutes hinted at a rate cut in December.
Nestle India jumped 4.5%, boosting the consumer index by 2%, as improving urban demand led to a rise in its quarterly profit.
The two highest-weighted stocks on the indexes, HDFC Bank and ICICI Bank, advanced 1.7% and 1.4%, respectively, while the third-heaviest, Reliance Industries rose 1.8%. The companies report this week.
Infosys the country’s No. 2 software services provider, declined 0.2% ahead of its results due after market.
Shares of Ola Electric climbed 5% after the EV two-wheeler maker launched its battery energy storage system solution.
The broader small-caps and mid-caps gained 0.2% and 0.5%, respectively.
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