Indian equity indices surge 1% amid SBI profit boost and Trump-Putin meeting optimism

Mumbai: India's key equity indices rallied about 1% in Monday's trade, recouping all the losses of last week, after State Bank of India's strong first quarter results and optimism over the upcoming meeting between Donald Trump and Vladimir Putin prompted liquidation of some bearish bets. The market may still not be out of the woods, with technical indicators pointing to caution, analysts said. The NSE Nifty rose 221.75 points, or 0.91%, to close at 24,585. The BSE Sensex gained 746.29 points, or 0.93%, to end at 80,604. Both indices shed 0.8-0.9% last week, logging their sixth consecutive week of losses-the longest in five years.

"Markets saw short covering on Monday before the upcoming Trump-Putin meeting, which is a trend usually seen in truncated weeks," said Shrikant Chouhan, head of equity research at Kotak Securities. "Strong first quarter results from SBI also led to some buying interest in PSU banks, with some shift away from private banks following ICICI's minimum balance announcement." That's been raised to ₹50,000 from ₹10,000.

The two presidents are to meet in Alaska on Friday to discuss ways to end Russia's war with Ukraine.

Nifty PSU Bank Index Top Gainer
Hopes are high that peace between Moscow and Kyiv would ease Trump's hardened tariff stance on India. Last week, the US imposed an additional 25% tariff on Indian goods over its purchases of Russian oil, taking the total levy to 50%-among the highest on any country. Indian financial markets are shut on Friday for Independence Day.

Elsewhere in Asia on Monday, markets remained firm, as China advanced 0.3%, Hong Kong rose 0.2% and Taiwan gained 0.5%. South Korea declined 0.1%. The pan-Europe index Stoxx 600 was flat at the time of going to print.

State Bank of India (SBI) rose 2.5% after its net profit increased by 12.5% to ₹19,160.4 crore from the year earlier, beating street estimates.

The Nifty PSU bank index was the top gainer of the day, up 2.2%, followed by the realty, healthcare and pharma indices, which rose 1-1.9%.

Nifty's Volatility Index, or VIX-known as the fear gauge-gained 1.5% to 12.22, indicating caution despite the benchmarks rising.

"Market sentiment showed some improvement on Monday, supported by FII buying seen on Friday. After six consecutive weeks of decline, the indices had entered oversold territory, and with no major negative news flow. This created room for a technical pullback," said Chandan Taparia, head of technical and derivatives research at Motilal Oswal Financial Services. Foreign portfolio investors net sold shares worth ₹1,203 crore on Monday. Domestic institutions were buyers to the tune of ₹5,972 crore.