Indian equity benchmarks ended higher on Tuesday, recovering from recent volatility as banking stocks led gains following the Reserve Bank of India’s announcement of a concessional foreign exchange swap facility for banks’ overseas borrowings. Easing geopolitical tensions in West Asia and a decline in crude oil prices further supported investor sentiment.

Key Highlights

• Banking stocks led market gains after RBI announced concessional forex swap facility measures.
• Cooling oil prices and easing geopolitical tensions boosted investor sentiment across sectors.

The benchmark BSE Sensex rose 0.54% or nearly 394 points to close at 73,918.76, while the NSE Nifty 50 advanced 0.52% to settle at 23,242.10. The positive momentum was driven primarily by financial stocks after the RBI unveiled measures aimed at boosting foreign currency inflows and supporting the rupee.

RBI Move Boosts Banking Shares

On Monday, the RBI allowed banks to raise overseas foreign-currency borrowings with a minimum maturity period of three years under a concessional swap facility. The initiative is designed to attract dollar inflows at a time when the Indian currency remains under pressure from elevated crude oil prices, foreign capital outflows, and geopolitical uncertainties.

The announcement triggered strong buying interest in banking and financial counters. The banking index climbed about 2.1%, while financial services stocks gained 1.4%. Public sector banks emerged as top performers, surging 3.6%, while private sector lenders added around 1.6%.

Market participants viewed the RBI’s move as a proactive step to strengthen foreign exchange liquidity and ease pressure on the rupee, boosting confidence in the financial sector.

Broad-Based Market Participation

The rally was broad-based, with 15 out of 16 major sectoral indices closing in positive territory. Broader markets also outperformed the benchmarks, reflecting improved risk appetite among investors.

The Nifty Midcap index rose 1.4%, while small-cap stocks gained 1.7%, indicating wider participation beyond frontline counters.

Oil Prices Ease Amid Geopolitical Calm

Investor sentiment also received support from cooling crude oil prices after signs of a pause in hostilities between Israel and Iran reduced concerns over potential supply disruptions.

Brent crude futures declined around 2% to $92.4 per barrel, offering relief to import-dependent economies like India. Lower oil prices help ease inflationary pressures and reduce concerns over the country’s current account balance.

Also Read: SEBI and RBI Set to Launch Bond Index Derivatives for Debt Market

InterGlobe Aviation Among Top Gainers

Among individual stocks, airline operator InterGlobe Aviation, the parent company of InterGlobe Aviation, gained 4.1%. The stock advanced after several brokerages reiterated a positive medium-term outlook following the company’s recent analyst meet, despite concerns over higher aviation fuel costs.

Analysts believe easing oil prices and supportive policy measures could continue to underpin market sentiment, although global developments and foreign fund flows will remain key factors influencing market direction in the near term.