Indian Stocks Record Best Week Since 2021

India’s main stock indexes experienced their most significant five-day surge since February 2021. This rally was primarily driven by strong financial stocks, which exceeded expectations in their earnings reports. Additionally, a weakening U.S. dollar bolstered investor confidence.

The Nifty 50 index increased by 1.15% to reach 24,125.55 on Monday, while the BSE Sensex climbed 1.09% to 79,408.50. Over the past five trading sessions, both benchmarks have collectively risen by almost 8%.

Financial stocks, representing over 37% of the Nifty 50, have surged by 9.5% during the same five-session period, attaining all-time highs.

ICICI Bank and HDFC Bank saw their stocks increase by 0.2% and 1.1%, respectively, on Monday, reaching new record highs after announcing better-than-anticipated earnings over the weekend.

The robust earnings from these two major banks propelled the banking index upwards on Monday.

G Chokkalingam, founder of Equinomics Research, stated that the banking sector is poised to spearhead earnings growth, noting that it is one of the few sectors where core business (credit growth) is expanding at double-digit rates.

Dhiraj Relli, managing director and CEO of HDFC Securities, commented that renewed interest from foreign investors, combined with decreasing crude oil prices, a weaker dollar, and declining domestic inflation, are contributing to a substantial upswing in Indian equities.

Room for Further Gains

Chokkalingam believes there is potential for additional gains, pointing out that the market capitalization of Indian stocks is still approximately 50 trillion rupees ($587.57 billion) below the highs recorded in September.

The weakening dollar, which fell to a three-year low on Monday, is anticipated to further encourage foreign inflows by reducing India’s import costs and promoting investment in emerging markets.

Financial and IT stocks, which have significant foreign portfolio investor exposure, accounted for over half of the Nifty’s gains on Monday.

Among individual stocks, Infosys increased by 2.2%, providing the largest boost to the IT index, after brokerages such as JM Financials described its fiscal year 2026 revenue guidance as both realistic and promising.

The broader mid- and small-cap segments experienced gains of 2.5% and 2.2%, respectively.