Indian Markets Achieve Best Week in Four Years

India’s key stock market indicators concluded trading on Thursday with gains, marking their strongest week in over four years. This surge effectively eliminated all losses accumulated since the beginning of the year, propelled by a significant upswing in prominent financial stocks.

The Nifty 50 index saw a rise of 1.8%, settling at 23,851.65, while the BSE Sensex climbed by 1.96% to close at 78,553.2, ahead of the Good Friday holiday.

Over the holiday-shortened week, the indexes experienced a substantial increase of 4.5%. In contrast, their Asian counterparts displayed weaker performance due to uncertainties surrounding U.S. tariffs and related concerns about their potential impact on economic expansion.

This week’s financial sector rally was fueled by expectations of improved net interest margins. This followed leading lenders’ decisions to lower deposit rates in response to the central bank’s interest rate reduction.

According to Ambareesh Baliga, an independent market analyst, the increasing trade tensions between China and the U.S. could enhance opportunities for Indian firms within the “China-plus one” strategy, potentially leading to greater demand for credit.

ICICI Bank and HDFC Bank, which hold the largest weightings on the Nifty, experienced significant gains of 7.2% and 5.5%, respectively, reaching record highs in anticipation of their earnings announcements over the weekend.

The market’s upward trend coincided with substantial foreign capital inflows of approximately 100 billion rupees ($1.12 billion) on Tuesday and Wednesday, based on provisional exchange data.

These inflows offered some respite, given that foreign portfolio investors had been actively selling recently. Their selling was driven by worries concerning sluggish economic and corporate earnings growth, along with the impact of U.S. tariffs.

Nevertheless, the benchmark indexes remain about 9% below their all-time peaks recorded in late September.

Swarup Mohanty, vice chairman and CEO of Mirae Asset Mutual Fund (India), noted that there had been a perception that India’s market was overvalued and that the rupee’s volatility was also a concern. He added that stability in the currency is essential for attracting fund flow reversal.

All 13 major sectors showed gains, although the information technology and pharmaceutical indexes, which are heavily reliant on the U.S. market, were among the weaker performers.

IT services provider Wipro saw a decrease of 4.3% on Thursday after it joined market leader TCS in projecting a subdued outlook for the sector’s expansion.