The Indian stock market rebounded with solid gains on Tuesday, with the Nifty closing 119 points higher at 23,242 and the Sensex rising 395 points to 73,919, finishing near the day's highs. According to CNBC TV18, the recovery came after Monday's sharp sell-off, with investors finding comfort in easing crude oil prices and RBI initiatives designed to support liquidity and strengthen external financing conditions. The broader markets significantly outperformed benchmark indices, with the Nifty Midcap 100 surging 810 points and the Nifty Smallcap 100 jumping 1.8%. The gains were largely driven by banking stocks after the Reserve Bank of India operationalised foreign currency liquidity measures by introducing special dollar-rupee swap facilities for Foreign Currency Non-Resident (FCNR) deposits and External Commercial Borrowings (ECBs). A decline in crude oil prices also supported sentiment, with Brent crude falling to $93.3 per barrel from around $97 ahead of the Indian market close on Monday.
NLC India Ltd. share price declined nearly 5% by midday after the government announced plans to sell up to a 3% stake in the company through an offer for sale (OFS). As reported by The Financial Express, the government has fixed the floor price at ₹303 per share, representing a discount of about 9.7% to the previous closing price. Under the transaction, a base offer of 2% equity will be sold, along with an additional 1% green shoe option in case of strong demand. The OFS opened for non-retail investors on June 9, while retail investors can participate on June 10. The latest divestment follows recent stake sales in Coal India, NHPC and Central Bank of India, with the government having already mobilised more than ₹12,000 crore through PSU stake sales during the current fiscal year. According to DIPAM Secretary Arunish Chawla, the government has already mobilised more than ₹12,000 crore through PSU stake sales during the current fiscal year. Analysts believe the accelerated disinvestment activity is linked to the government's FY27 target of raising ₹80,000 crore through disinvestment and asset monetisation.
Banking shares emerged as the biggest drivers of the market rally, with the Nifty Bank index surging 1,131 points to 55,195, with all constituents ending in positive territory. According to CNBC TV18, IDFC First Bank, Bank of Baroda, Federal Bank, Punjab National Bank, Canara Bank and Union Bank of India from the Nifty Bank index rallied in the range of 2% to 4%. State Bank of India (SBI), Axis Bank and ICICI Bank were up 1% each, while Bank of India, RBL Bank, Federal Bank, Indian Bank, Karnataka Bank, Jammu & Kashmir Bank and South Indian Bank were up between 2% and 5%. The banking sector's strong performance provided significant support to the broader market during the session, with the sector benefiting from the RBI's new forex measures and improved liquidity conditions. The rally was triggered by the RBI's decision to introduce a specialised framework for Foreign Currency Non-Resident (FCNR(B)) deposits and External Commercial Borrowings (ECBs), with the central bank also widening the scope to allow banks to raise foreign currency borrowings.
The market rally was primarily driven by the Reserve Bank of India's decision to introduce a specialised framework for Foreign Currency Non-Resident (FCNR(B)) deposits and External Commercial Borrowings (ECBs). As reported by CNBC TV18, the central bank also widened the scope of the ECB scheme to allow banks, in addition to public sector undertakings, to raise foreign currency borrowings. To encourage participation, the RBI unveiled a swap mechanism offering a fixed rate of 1.5% per annum, effectively reducing a significant portion of hedging costs. Market participants viewed the move as a proactive step to attract dollar inflows and strengthen external financing conditions. The Nifty PSU Bank index emerged as the top performer, with every constituent ending higher, while gains were also visible across financials and select industrial stocks.
Fino Payments Bank jumped 10% after a strong May business update, while PI Industries surged 7% after key customer Kumiai raised its revenue and profit outlook. According to CNBC TV18, JSW Infrastructure gained 5% after emerging as the successful bidder for container berths at Kolkata Port, and RVNL advanced more than 2% following a ₹221 crore railway contract win. Reliance Industries contributed to the rebound, ending a nine-session losing streak. However, weakness persisted in technology stocks, with the Nifty IT index extending its losing run to a fifth consecutive session. The broader market outperformed the headline indices, signalling a return of risk appetite with the NSE advance-decline ratio at nearly 3:1.
