Indian Stock Market Rebounds Strongly After Flat Start



Sensex and Nifty Rally on Positive Global Cues

Indian equity indices rebounded sharply on renewed optimism over a potential India-US trade deal and favorable global cues. The BSE Sensex surged 1,200.18 points, or 1.48%, to close at 82,530.74, while the Nifty 50 climbed 395.20 points, or 1.60%, ending the day at 25,062.10.

This rally came after a subdued start to the trading session, where the Nifty 50 briefly dipped to an intraday low of 24,494 before staging a strong recovery past the psychological 25,000 mark, reaching a high of 25,116.

Broad Market Participation Signals Strong Sentiment

Market breadth was overwhelmingly positive. Out of all the traded stocks, 2,511 advanced, 1,302 declined, and 139 remained unchanged, indicating broad-based buying interest across the board.

Among the top gainers on the NSE were:

  • Hero MotoCorp

  • JSW Steel

  • Trent

  • Tata Motors

  • HCL Technologies

On the volatility front, the India VIX (a measure of market volatility) fell by 0.52 points, settling at 17.14, reflecting a decline in perceived market risk.

Expert Insights: Inflation Eases, Rate Cuts Expected

According to Bajaj Broking Research, the bullish momentum was underpinned by a favorable shift in global cues, rising expectations of a rate cut, and sustained Foreign Institutional Investor (FII) inflows.

Echoing this sentiment, Vinod Nair, Head of Research at Geojit Financial Services, attributed the rally to:

  • A decline in domestic inflation

  • Positive signals from the US regarding a trade pact with India


Sectoral Performance: Auto, Realty, and Financials Outperform

Sectoral indices reflected widespread optimism. Auto, realty, metal, consumption, media, and financial services emerged as strong performers, with nearly all sectors closing in the green.

In a significant macroeconomic development, India’s passenger vehicle sales rose by 5.5% YoY in April 2025, reaching 303,648 units, as per data from the Society of Indian Automobile Manufacturers (SIAM).

Currency Movements: Rupee Shows Volatility

The Indian rupee saw a volatile session. While it rallied briefly towards the session’s peak, it closed lower due to demand for the US dollar from petroleum importers and institutions engaged in currency risk management.

🏦 Indian Banks: Loan Growth, Profitability, and Outlook

S&P Global: Banks Set to Benefit from Loan Growth

A report by S&P Global Market Intelligence highlights that India’s largest public and private sector banks are poised to benefit from an uptick in loan growth, supported by rising profits and strong balance sheets.

All six of India’s major banks reported higher net income for the fiscal year:

  • State Bank of India (SBI): Net income rose by 16.1%, reaching ₹709.01 billion, with a Net Interest Margin (NIM) of 2.81%.

  • HDFC Bank Ltd.: Net income increased by 10.7%, with a NIM of 3.45%.

Loan Book Expansion and Future Projections

While loan book growth slowed from 21.18% in the previous fiscal to 11.29%, projections suggest:

  • FY 2025-26: Loan growth may exceed 12%

  • FY 2026-27: Expected to reach around 13%, according to Visible Alpha estimates

However, net profits of public sector banks (PSBs) may witness a mild decline in FY 2025-26:

  • SBI’s net income expected to fall 3.1% to ₹687.20 billion

  • HDFC Bank’s net income projected to increase by 9.5% to ₹737.20 billion

💰 PSBs Record Highest-Ever Net Profit in FY 2023–24

Record Profit Milestone

According to government data, Public Sector Banks in India achieved their highest-ever net profit in FY 2023–24, reaching a cumulative ₹1.41 lakh crore. This significant milestone reflects:

  • Improved asset quality

  • Higher operational efficiency

  • Better capital adequacy

During the first half of FY 2024–25 alone, PSBs registered a profit of ₹85,520 crore.

Improved Asset Quality & Dividends

Asset quality improved notably, with the Gross Non-Performing Asset (GNPA) ratio dropping sharply to 3.12% as of September 2024.

Furthermore, PSBs have:

  • Paid out ₹61,964 crore in dividends over the past three years

  • Demonstrated sound financial management and investor returns

📝 Conclusion: Optimism Returns to Indian Markets

Today’s rebound in equity markets, coupled with strong bank earnings and improved macroeconomic indicators, signal a return of optimism to Indian financial markets.

As India navigates global uncertainties, strong fundamentals, policy support, and global cooperation (such as a potential India-US trade agreement) will play a critical role in sustaining this momentum.


Location: Pune, Maharashtra, India

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