Indian shares gain, led by banks on RBI forex swap facility
- Nifty 50 rose 0.52% to 23,242.10, and the BSE Sensex gained 0.54% to 73,918.76
Indian share benchmarks rose on Tuesday, led by lenders after the central bank detailed a concessional forex swap facility for banks’ overseas foreign-currency borrowings, while a pause in Israel-Iran hostilities helped cool oil prices.
The benchmark Nifty 50 rose 0.52% to 23,242.10, and the BSE Sensex gained 0.54% to 73,918.76.
The Reserve Bank of India on Monday allowed banks to raise overseas foreign-currency borrowings of at least three years at concessional swap rates, aiming to boost dollar inflows with the rupee under pressure from higher oil prices, foreign outflows and geopolitical risks.
Banks and financials rose about 2.1% and 1.4%, respectively, while state-owned lenders climbed 3.6% and private banks gained 1.6%.
“RBI’s measures will definitely ease some of the forex pressure for banks, effectively eliminating forex hedging costs, lowering cost of funds and bolstering lenders’ liquidity positions,” said Vikas Satija, managing director and chief executive officer at Shriram Wealth.
Fifteen of the 16 major sectors advanced. The small-caps and mid-caps rose 1.7% and 1.4%, respectively.
Stable March-quarter earnings and resilient domestic inflows have helped Indian equities withstand record foreign outflows, but “crude oil remains the joker in the pack as the impact of the Iran war plays out,” Satija said.
Iran and Israel said on Monday they had halted attacks on each other after an appeal from U.S. President Donald Trump, though both sides warned they could resume hostilities.
Brent crude futures fell 2% to $92.4 per barrel.
Among stocks, IndiGo airline operator InterGlobe Aviation gained 4.1% after several brokerages reiterated a positive medium-term view on the airline following its analyst day, despite near-term pressures from high fuel prices and restricted Middle East and Pakistan airspace.
State Bank of India rose 2.1% after Money control reported, citing Chairman C. S. Setty, that the lender plans to list SBI General Insurance. SBI did not immediately respond to a Reuters request for comment.
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