Indian markets opened higher on Tuesday, with benchmark indices showing strong gains across the board. According to Business Standard, the BSE Sensex advanced 394.50 points or 0.54% to 73,918.76, while the Nifty 50 index rose 119.10 points or 0.52% to 23,242.10. The recovery was broad-based with all 16 major sectors logging gains, while the broader small-caps and mid-caps outperformed with the BSE 150 MidCap Index rising 1.24% and the BSE 250 SmallCap Index adding 1.39%. The positive momentum was driven by buying in banking and financial stocks, which benefited from the Reserve Bank of India's latest policy measures. Gift Nifty futures for June 30, 2026, were trading 0.12% higher at 23,567 points at 7:59 am on Friday, indicating the index will open around 150 points or 0.64% higher compared to previous close levels.
The Reserve Bank of India's latest policy measure provided significant support to the banking sector, with banks and financials rising about 1% each following the central bank's announcement. As per Business Standard, the RBI detailed operational details of its forex swap facilities for FCNR(B) deposits, external commercial borrowings and overseas foreign currency borrowings, with the measures expected to encourage overseas fund-raising and lower hedging costs. The central bank introduced a US Dollar-Rupee forex swap facility for eligible ECBs raised by public sector undertakings and overseas foreign currency borrowings raised by authorised dealer category-I banks, available for borrowings with a minimum maturity of three years and remaining open for eligible inflows received up to 31 December 2026. The facility will be priced at a fixed rate of 1.5% per annum, compounded semi-annually, with a maximum tenor of five years. In a separate measure, the RBI launched a forex swap facility for fresh FCNR(B) deposits mobilised by banks, covering deposits with maturities ranging from three to five years and remaining open for deposits raised up to 30 September 2026.
Banking shares outperformed after the RBI announced operational details of its forex swap facilities, with State Bank of India gaining 2.11%, ICICI Bank rising 1.98% and Axis Bank advancing 1.92%. According to Business Standard, the Nifty ended above the 23,200 mark, led by gains in banking and financial services stocks. The positive momentum was driven by buying in banking and financial stocks, which benefited from the Reserve Bank of India's latest policy measures. Banking and financial stocks led the rally following the RBI's Monday evening announcement of forex swap facilities, with the PSU Bank, financial services and defence indices outperforming among sectoral gains. The central bank's decisive measures to attract foreign capital continue to provide stability amid global uncertainties, with the Indian rupee appreciating 0.4% to 95.39 against the US dollar after three consecutive sessions of weakness.
Global geopolitical tensions showed signs of easing as Iran on Monday suspended military strikes against Israel but warned it could resume attacks if Israeli operations in Lebanon continue. According to Business Standard, Iran on Monday halted military strikes against Israel but warned it would resume attacks if Israeli forces continue operations in Lebanon, as reported by Tehran's foreign ministry. Israeli Prime Minister Benjamin Netanyahu later said the conflict involving Iran and Hezbollah was "not yet over," but the temporary ceasefire provided relief to markets. However, Brent crude for July 2026 settlement lost $1.74 or 1.85% to $92.51 a barrel, with the US Dollar Index (DXY) down 0.27% to 99.75. This development helped support sentiment across Indian equities, with softer crude oil prices and gains in Asian and US equities further aiding the recovery. The positive global cues, combined with the RBI's supportive measures, created a favorable environment for Indian markets to rebound from Monday's losses.
Market breadth remained strong with 2,782 shares rising and 1,423 shares falling on the BSE, as reported by Business Standard. Around 207 shares were unchanged, with the NSE's India VIX slumping 8.53% to 15.58, indicating reduced market volatility expectations. Among the Nifty 50 stocks, IndiGo, Jio Financial Services, Eicher Motors, SBI and ICICI Bank were among the top gainers, while Titan, NTPC, Power Grid and Tech Mahindra declined the most. In the midcap segment, PI Industries, GVT&D, Motilal Oswal Financial Services, Tata Communications and Tube Investments gained between 3% and 5%, while Ola Electric, Data Patterns, Redington, Aster DM Healthcare and Welspun Corp rose 4-9% among smallcaps. Notable individual stock performers included Motilal Oswal Financial Services surging 5.25% after HDFC Life Insurance acquired a 0.30% stake, Redington jumping 4.69% after Apple announced major software upgrades, and Aye Finance climbing 8.68% after board approval for raising up to $15 million through NCDs.
The Reserve Bank of India's Monetary Policy Committee, led by Governor Sanjay Malhotra, unanimously decided to keep the policy repo rate unchanged at 5.25 percent while continuing with its neutral stance on June 5, 2026. The central bank prioritised balancing growth and inflation, even as it raised its FY27 inflation estimate to 5.1 percent from 4.6 percent earlier and lowered its full-year real GDP growth projection to 6.6 percent from 6.9 percent, with downward revisions across all quarters. The decision was largely on expected lines, given the considerable risks to the MPC's baseline assessment of inflation and growth arising from uncertainty over the duration and intensity of the West Asia conflict. The RBI is awaiting greater clarity on the West Asia conflict and its impact on oil and gas supply chains, along with the broader global environment, which has deteriorated since the last policy meeting.
