Sensex and Nifty gained as FII buying and banking stocks lifted sentiment.
Lower Brent crude below $72 improved India's inflation and macroeconomic outlook.
Markets shifted focus to Q1 FY27 earnings, with banks and autos expected to outperform.
Indian benchmark indices started the week on a positive note on Monday, supported by strong gains in banking stocks, continued foreign institutional buying and easing crude oil prices.
At around 9:20 am, the NSE Nifty 50 was trading at 24,355.35, up 83.80 points or 0.35%, while the BSE Sensex gained 306.31 points, or 0.39%, to 78,070.22.
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Among the early gainers on the Nifty, Bharat Electronics (BEL) rose 2.26%, followed by HDFC Bank, which gained 1.85%. Axis Bank climbed 1.77%, ICICI Bank advanced 1.28%, while Bharti Airtel added 0.69%, with financial stocks providing the biggest support to benchmark indices.
The Indian rupee slipped 9 paise to 95.27 against the US dollar in early trade, remaining largely stable compared with its previous close of 95.21.
Lower Crude, FII Buying Lift Sentiment
Investor sentiment was aided by a further decline in crude oil prices after OPEC+ agreed to raise production targets from August, while exports through the Strait of Hormuz continued to normalise, easing concerns over global supply disruptions.
Brent crude futures fell 0.33% to trade below $72 a barrel, strengthening India's macroeconomic outlook by reducing inflationary pressures and improving the current account balance.
Markets also drew support from sustained foreign institutional buying. According to provisional exchange data, foreign institutional investors purchased Indian equities worth ₹1,355 crore on Friday, marking their third consecutive session of net buying.
Focus Shifts To Q1 Earnings
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the revival of the monsoon and the return of foreign institutional investors as net buyers are positive developments for the market in the near term.
He said investor focus will now shift to the Q1 FY27 earnings season, which begins this week. While quarterly earnings are expected to remain subdued because of the energy shock and macroeconomic headwinds arising from the West Asia conflict, markets are likely to look beyond the quarter and assess management commentary for the rest of the financial year.
According to Vijayakumar, financial services and automobile companies are expected to outperform during the quarter. He expects banks to report stronger-than-expected earnings, supported by robust credit growth of around 17%, while NBFCs focused on gold loans and consumer finance could deliver revenue and profit growth of around 20%.
He added that commercial vehicle and two-wheeler manufacturers are also likely to post strong numbers, reflecting better-than-expected sales during the quarter.
On the other hand, Vijayakumar expects information technology companies to report subdued earnings and cautious guidance.
He said buying on dips remains the preferred strategy for investors in the near term.
