Benchmark equity indices Nifty50 and BSE Sensex erased early losses to end higher on Monday, supported by gains in banking stocks and optimism around potential easing of tensions in the Middle East. The 50-share Nifty rose 255.15 points, or 1.12%, to settle at 22,968.25, while the 30-share Sensex jumped 787.30 points, or 1.07%, to close at 74,106.85.Both indices had opened weak and slipped as much as 0.7% and 0.8%, respectively, during the day before staging a recovery.Market breadth remained strong, with 15 out of 16 sectoral indices ending in the green. Broader markets also participated in the rally, with mid-cap and small-cap indices gaining 1.5% and 1.3%, respectively.Banking stocks led the upmove after several lenders reported robust loan growth for the March quarter.Investor sentiment improved on hopes of de-escalation in the ongoing Middle East conflict. Reports indicated that the United States and Iran had received a framework plan to end hostilities, although Iran rejected reopening the Strait of Hormuz immediately after US President Donald Trump threatened to escalate action if a deal was not reached.“This is purely a headline-driven market as investors remain on edge over the Middle East war. If the report about peace plan solidifies, we could see Nifty rising towards 23,300 level,” said Sunny Agrawal, head of fundamental equity research at SBICAPS Securities, Reuters quoted.“The buy-on-dips trend seen in last couple of sessions and encouraging provisional quarterly updates from companies also aided investor sentiment,” Agrawal said.According to analysts, Dalal Street is likely to remain volatile this week as investors track key domestic and global developments along with ongoing tensions in the Middle East, as the conflict has entered its sixth week. Focus will be on the Reserve Bank of India’s Monetary Policy Committee (MPC) meeting, Middle East developments, FPI selling, rupee and geopolitical news. Vinod Nair, head of research at Geojit Investments Ltd, told PTI that investors will closely observe how the central bank balances inflation concerns with signs of slowing growth.“A rate pause is near-certain consensus, the central bank walks a tightrope between crude-driven inflation risks and a four-year low Manufacturing PMI signalling a softening growth impulse. The governor’s commentary on the rate cycle trajectory and FY27 projections will be closely monitored.”“Globally, the US March CPI reading will carry significant importance, as it buries residual Fed rate-cut hopes, strengthens the dollar and tightens financial conditions for emerging markets, including India,” Nair stated.He added that markets may react sharply as trading resumes after a three-day break, especially depending on developments. “Indian markets return after a three-day gap and remain acutely vulnerable to weekend war developments, with crude trajectory and any credible ceasefire signal being the decisive variable that could either trigger a sharp relief rally or extend the current sell-on-rise mode,” Nair added.Last week, which was shortened due to holidays, saw benchmark indices end lower. The BSE Sensex fell 263.67 points, or 0.35%, while the NSE Nifty declined 106.5 points, or 0.46%.In global markets, Asian stocks traded majorly in green. While Japan’s Nikkei and South Korean Kospi jumped in green, Australia, Hong Kong and Shanghai remained shut.
