By Our Business Correspondent
Indian equity benchmarks staged a strong recovery on Tuesday, aided by easing crude oil prices, supportive global market cues and robust buying in banking stocks following the Reserve Bank of India’s operational guidelines for its forex swap facilities.
The benchmark Sensex gained 394.50 points, or 0.54 per cent, to close at 73,918.76, while the Nifty 50 rose 119.10 points, or 0.52 per cent, to settle at 23,242.10, reclaiming the 23,200 level after two consecutive sessions of decline.
Market sentiment improved after Brent crude prices slipped below $93 per barrel as geopolitical tensions between Israel and Iran showed signs of easing. The decline in oil prices eased concerns over imported inflation and India’s current account outlook.
Banking stocks led the rally after the RBI detailed its forex swap facilities for FCNR(B) deposits, external commercial borrowings (ECBs) and overseas foreign currency borrowings. Market participants expect the measures to facilitate overseas fundraising, improve foreign currency liquidity and reduce hedging costs for borrowers.
Among major gainers on the Nifty were State Bank of India, ICICI Bank and Axis Bank, which helped drive the banking led advance.
Broader markets outperformed frontline indices, with the BSE MidCap and SmallCap indices gaining 1.24 per cent and 1.39 per cent, respectively. Market breadth remained positive as advancing shares significantly outnumbered declines on the BSE.
Investor confidence was also reflected in the India VIX, which declined 8.53 per cent to 15.58, indicating reduced near term volatility expectations.
The RBI announced two forex swap facilities. The first allows eligible ECBs raised by public sector undertakings and overseas foreign currency borrowings by authorised dealer banks to access a dollarrupee swap window at a fixed rate of 1.5 per cent per annum for up to five years. The facility will remain available for eligible inflows received until December 31, 2026.
Separately, the central bank introduced a swap facility for fresh FCNR(B) deposits with maturities between three and five years. The scheme, available until September 30, 2026, is expected to support foreign currency inflows and strengthen domestic liquidity conditions.
In the debt market, the yield on the benchmark 10 year government bond eased to 6.906 per cent. The rupee traded marginally lower against the US dollar, while gold prices remained largely unchanged.
Global markets also provided support. Asian and European equities traded higher amid improving risk appetite, driven by easing Middle East tensions and renewed strength in technology and semiconductor stocks. Chinese equities advanced after stronger than expected export growth data for May.
Among individual stocks, Motilal Oswal Financial Services surged after a stake purchase by HDFC Life Insurance through a block deal, while JNK India rallied following a major export order from the UAE. Redington gained on optimism surrounding Apple’s latest software and artificial intelligence announcements at its annual developer conference.
In the primary market, the IPO of Hexagon Nutrition attracted strong investor interest, with subscriptions exceeding 52 times the shares on offer by late afternoon on the final day of bidding.
Disclaimer: Market data and corporate developments are based on exchange filings and publicly available information. Investors should exercise due diligence before making investment decisions.