Sensex rises 256 pts, Nifty above 25,100; banks rally

Domestic benchmark indices closed higher on Monday, powered by a rally in banking stocks after the Bank Nifty hit a record high during the session. Sentiment was lifted by the Reserve Bank of India's policy easing announced on Friday, and encouraging progress in U.S.-India trade talks. The Nifty ended just above the 25,100 mark. Barring Nifty Realty, all NSE sectoral indices closed in the green.

The S&P BSE Sensex added 256.22 points or 0.31% to 82,445.21. The Nifty 50 index rose 100.15 points or 0.40% to 25,103.20.

Kotak Mahindra Bank (up 3.19%), Bajaj Finance (up 2.51%) and Adani Enterprises (up 1.85%) boosted the indices.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index rose 1.03% and the S&P BSE Small-Cap index added 1.19%.

The market breadth was strong. On the BSE, 2,798 shares rose and 1,409 shares fell. A total of 128 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rose 0.42% to 14.69.

India-U.S. Trade Negotiations:

Trade negotiations between the United States and India appear to be gaining momentum, with a U.S. trade delegation currently in India extending its stay, an encouraging sign of progress. Both sides are reportedly working toward reaching an early agreement by July.

While the discussions are advancing, reciprocal tariffs remain a sticking point and are currently facing legal scrutiny. India is keen to sidestep the imposition of such tariffs as part of the final deal.

Commerce Minister Piyush Goyal had met with Howard Lutnick, CEO of Cantor Fitzgerald, in May. Lutnick has expressed optimism about a trade agreement being finalized soon, further raising hopes for a breakthrough in bilateral trade relations.

The extension of the U.S. team's visit is seen as a positive indicator that both nations are working through key issues with intent.

Economy:

India's forex reserves dropped by $1.237 billion to $691.485 billion for the week ended May 30, the RBI said on Friday.

For the week ended May 30, foreign currency assets'a major component of the reserves'fell $1.952 billion to $584 billion, according to the RBI data.

The gold reserves increased by $723 million to $84.305 billion during the week, the RBI said.

The Special Drawing Rights (SDRs) were down by $2 million to $18.569 billion, the apex bank said.

India's reserve position with the IMF was also down by $6 million at $4.395 billion in the reporting week, the apex bank data showed.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 0.69% to 6.281 from the previous close of 6.230.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 85.6600 compared with its close of 85.6875 during the previous trading session.

MCX Gold futures for 5 August 2025 settlement shed 0.30% to Rs 96,720.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.28% to 98.91.

The United States 10-year bond yield fell 0.64% to 4.485.

In the commodities market, Brent crude for August 2025 settlement advanced $ 1.31 or 2% to $65.65 a barrel.

Global Markets:

European shares traded lower on Monday as global investors remained cautious ahead of the upcoming US-China trade talks, which are expected to take place in London.

Asian stocks ended higher as investors awaited trade discussions between the United States and China and reviewed the latest economic data from China and Japan.

China's consumer price index declined 0.1% year-on-year in May, unchanged from the previous month, according to government data released Monday. The producer price index fell 3.3% year-on-year, marking the sharpest decline in 22 months and following a 2.7% decrease in April.

Japan's gross domestic product contracted 0.2% year-on-year in the January'March quarter. While better than the preliminary estimate of a 0.7% decline, it reflected a reversal from 2.4% growth in the previous quarter.

Reports indicated that China granted temporary approvals for rare earth exports, and Boeing resumed commercial aircraft deliveries to China.

In the United States, equities closed higher on Friday following the release of nonfarm payroll data and news of upcoming trade talks. The US economy added 139,000 jobs in May, down from April's revised figure of 147,000. March payrolls were also revised lower to 120,000.

Average hourly earnings increased by 0.1% on a monthly basis in May, resulting in a 0.4% annual pace, reflecting ongoing wage pressures.

President Donald Trump stated that Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and US Trade Representative Jamieson Greer would meet Chinese officials in London on Monday to discuss trade matters.

Stocks in Spotlight:

The Nifty Bank index rose 0.46%. It hit a record high of 57,049.50 today. The recent monetary policy move has pumped fresh liquidity into the system. Banks can either channel these funds into rising credit demand or invest in government and corporate bonds, both of which could boost interest income. Additionally, with surplus liquidity in hand, banks are likely to reduce deposit rates, helping bring down their cost of funds.

Kotak Mahindra Bank (up 3.25%), AU Small Finance Bank (up 2.89%), Federal Bank (up 2.54%), Axis Bank (up 2.17%), Punjab National Bank (up 1.82%), Canara Bank (up 1.78%), IndusInd Bank (up 1.60%), State Bank of India (up 0.85%), IDFC First Bank (up 0.85%), Bank of Baroda (up 0.66%) rose.

HDFC Bank shed 0.01%. The bank said that the Mehta Family, through Lilavati Kirtilal Medical Trust, has filed an FIR against the bank and its MD and CEO Sashidhar Jagdishan in an attempt to thwart the recovery of the long outstanding loan dues owed to the bank.

Multi Commodity Exchange of India (MCX) jumped 7.22% after the company said it received approval from the Securities and Exchange Board of India (SEBI) to launch electricity derivatives.

Capri Global Capital surged 19.52% after the company launched the autopay facility for gold loans, eliminating the need for manual payments or branch visits. This new feature is designed to make gold loan repayments more convenient, secure, and hassle-free for customers.

OCCL surged 14.87% after the Indian government has imposed anti-dumping duties on imports of Insoluble Sulphur originating from China and Japan. This decision, formalized through a Gazette notification dated 6 June 2025, is expected to favorably impact OCCL, a leading producer of this critical rubber additive.

JSW Steel rose 0.24%. The company recorded consolidated steel production of 22.73 lakh tonnes in May 2025, which is higher by 8% as compared with the production volume of 20.98 lakh tonnes reported in May 2024.

Mahindra & Mahindra (M&M) shed 0.52%. The company said that its total production jumped 27.56% to 89,626 units in the month of May 2025, compared with 70,261 units produced in the same period last year.

Persistent Systems added 1.98% after the company's board approved the reappointment of Dr. Anand Deshpande as the managing director (MD) of the company for the next term of 5 consecutive years.

Indo Borax & Chemicals rose 4.93% after the company announced the launch of a new high-value chemical product, Boron Oxide, by July 2025. The firm is setting up a dedicated manufacturing facility in Pithampur, Indore (Madhya Pradesh) with a proposed capacity of 4,000 metric tonnes per annum. The total capital expenditure for the project is estimated at Rs 20 crore, which will be financed entirely through internal accruals. The company aims to achieve full operational capacity in a phased manner within a year.

RailTel Corporation of India added 3.10% after the company announced that it has secured two significant work orders worth a total of Rs 259.07 crore from government entities in Bihar and Himachal Pradesh.

Afcons Infrastructure added 3% after the firm received a letter of award (LoA) from Reliance Industries (RIL) worth Rs 700 crore for the execution of construction works related to the Vinyl Projects at Dahej, Gujarat.

Glenmark Pharmaceuticals rose 0.68%. The drug maker announced the upcoming launch of zanubrutinib in India, following approval from the Drugs Controller General of India (DCGI).

Larsen & Toubro (L&T) rose 0.69%. The company announced that its heavy civil infrastructure (HCI) vertical has secured a significant order from JSW Energy for the execution of the Bhavali pumped storage project (PSP) in the state of Maharashtra.

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