Markets extends gains for sixth consecutive day, banks lead the charge

The Indian stock market extended its gains for the sixth straight session on Monday, driven by strong performances from banking stocks and positive sentiment in FMCG and real estate sectors. The BSE Sensex rose by 187 points, closing at 79,596, while the Nifty 50 gained 42 points, finishing at 24,167. The Nifty Bank index surged 343 points, hitting a new record high of 55,647 for the second consecutive session, with major banking heavyweights such as HDFC Bank, ICICI Bank, and Kotak Mahindra Bank continuing to attract investor interest. Midcap stocks also saw substantial gains, with the Nifty Midcap 100 rising by 423 points to close at 54,397, reflecting broader market optimism.

The banking sector remained a focal point, with HDFC Bank becoming the third Indian company to surpass a market capitalisation of ₹15 trillion. Its strong performance, along with continued buying in ICICI and Kotak Mahindra, contributed significantly to the day's gains. Despite mixed reactions in other sectors, the sector’s outperformance helped lift the broader indices.

FMCG stocks witnessed a boost as several major brokers upgraded their outlook on the sector. ITC and Hindustan Unilever (HUL) were among the top gainers, with ITC rising by nearly 2% and HUL posting solid gains following positive recommendations from research firms. Steel stocks closed in the green, but off their highs, as news of a 12% safeguard duty notification dampened some enthusiasm. Despite this, major steelmakers maintained upward momentum.

Shares of IndusInd Bank fell by over 5%, following reports that the bank had appointed Ernst & Young (EY) for a forensic audit of its microfinance book. Investors reacted negatively to the news, as concerns over potential financial discrepancies weighed on sentiment. Meanwhile, shares of Bajaj Auto and Hero MotoCorp faced downward pressure, falling 1-2%, after Jefferies downgraded both stocks due to concerns about rising competition and margin pressure in the domestic two-wheeler market.

Stocks of gold financing companies saw notable gains, benefiting from a surge in international gold prices, which hit a record high of $3,500 per ounce. Companies like Muthoot Finance and Manappuram Finance saw their stock prices rise sharply on the back of the bullish gold market. Shares of Chola Investment tumbled nearly 6%, following a downgrade by CLSA, citing concerns over valuation and growth prospects. The stock's decline added pressure to the broader market, though it was offset by gains in other sectors.

Air conditioning companies gained momentum, with Voltas rising by 2%, as reports suggested the Indian government is considering relaxing Bureau of Indian Standards (BIS) norms. This potential regulatory change could ease operational hurdles for the industry, boosting investor sentiment. HCL Technologies ended the session flat, with investors awaiting the company’s Q4 earnings report later this week. Analysts are closely monitoring the results for indications of growth in the IT services sector.

The real estate sector was among the top performers on the day, with stocks rising in the range of 2-4%, driven by a strong outlook for the sector, supported by improved demand and favourable government policies. Shares of United Spirits (USL) rose 3%, while United Breweries (UBL) gained 1%, after the government announced the relaxation of liquor permit regulations at GIFT City, boosting investor sentiment in the liquor sector.

Market breadth remained positive, with advances outpacing declines. The advance-decline ratio stood at 2:1, indicating broad-based support for the market’s upward move.