Market Opens Higher: Key Reasons Behind Sensex's 400-Point Jump

Indian benchmark indices opened higher on Tuesday, supported by easing geopolitical concerns, lower crude oil prices and gains in banking shares, even as global cues remained mixed.

At around 9:30 am, the BSE Sensex was up 350 points at 73,915, while the NSE Nifty50 gained nearly 100 points to trade at 23,243. Market breadth remained positive with most sectoral indices trading in the green.

Banking and financial stocks led the gains after the Reserve Bank of India introduced measures aimed at encouraging foreign currency borrowings by lenders. The Nifty Bank and Financial Services indices rose around 1% each, helping benchmark indices recover from Monday's sharp decline.

Among individual stocks, Divi's Laboratories, Bosch, Lodha Developers and Samvardhana Motherson were among the top gainers. On the other hand, Titan, GAIL, Infosys and NTPC traded lower. Nifty IT was the only major sectoral index in the red, declining around 0.7%.

Crude Prices Fall

Investor sentiment improved after signs of a temporary de-escalation in West Asia.

Iran and Israel indicated that attacks on each other had stopped following an appeal by US President Donald Trump. However, Tehran warned that hostilities could resume if Israel continues military operations against Hezbollah in Lebanon.

The easing tensions led to a sharp decline in crude oil prices. Brent crude futures traded near $93.3 per barrel, down significantly from levels close to $100 seen on Monday. The fall in oil prices reduced concerns over inflation and India's import bill, supporting equity markets and the rupee.

The Indian currency opened 24 paise stronger at 95.47 against the US dollar compared with Monday's close of 95.71, aided by lower crude prices and RBI measures aimed at attracting foreign inflows.

Banking Stocks In Focus

Financial stocks witnessed strong buying after the RBI allowed banks to access a concessional swap facility for overseas borrowings with a minimum maturity of three years.

Market participants believe the move could lower hedging costs and make foreign currency funding more attractive, improving liquidity conditions for lenders and supporting banking sector valuations.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said banking stocks remain one of the most attractive segments in the market despite persistent foreign investor selling.

"The large-cap valuations are fair, and in segments like banking attractive, mainly due to the selling by FIIs. This segment offers a good buying opportunity for investors with a two to three-year time horizon. The risk-reward ratio is favourable for buyers," he said.

India Regains 6th Spot In Global Market Rankings

India has regained its position as the world's sixth-largest stock market by capitalisation after South Korea slipped below it following a sharp correction in semiconductor stocks.

South Korea's market capitalisation has declined to around $4.5 trillion after steep losses in technology heavyweights Samsung Electronics and SK Hynix, which have fallen nearly 18-19% from recent highs amid a global correction in AI-linked stocks.

India's market capitalisation has remained relatively stable at about $4.84 trillion during the same period, helping it move ahead of South Korea once again.

According to Vijayakumar, the rebound in technology stocks on Nasdaq has also helped stabilise sentiment in Asian semiconductor markets, although the pace of the AI-driven rally has moderated.

He added that while foreign institutional investors continue to maintain significant short positions in the market, strong activity in mid- and small-cap stocks, supported by healthy fourth-quarter earnings and growth prospects, continues to provide support to domestic equities.

Investors will closely monitor developments in West Asia, crude oil prices, foreign fund flows and weekly derivatives expiry-related volatility for further market direction.