Markets showed growth on Monday as the Sensex and Nifty indices opened in positive territory. This rise was driven by several factors, including easing geopolitical tensions, a sharp drop in crude oil prices, the strengthening of the Indian rupee, strong first-quarter results for the 2027 fiscal year, and renewed buying from Foreign Institutional Investors (FIIs).
The BSE Sensex began the trading session with an increase of nearly 566 points or 0.72 percent, reaching 78,657. It peaked at 78,895.10, showing a rise of 801 points or 1.02 percent. Similarly, the Nifty 50 index rose by 146 points or 0.60 percent, opening at 24,529. The index of 50 stocks reached a peak of 24,576.45, increasing by 193 points or 0.79 percent.
At the sectoral level, the Nifty Metal and Nifty FMCG indices grew by more than 1 percent, followed by Nifty Metal and Nifty PSU Bank. In broader markets, the Nifty Midcap 100 increased by 0.59 percent, while the Nifty Smallcap 100 showed a growth of 0.99 percent.
Rajesh Palviya, Head of Research at Axis Direct, noted that technically the market maintains a positive bias as long as Nifty stays above the support zone of 24,250. He added that a decisive fall below this level could trigger a correction towards 24,100, while immediate resistance is around 24,550, followed by the 200-day moving average at approximately 24,780.
Oil Price Decline
On Monday, according to the latest data, oil prices fell by more than 5 percent, dropping to $83.49 per barrel from the previous level of $4.44. This occurred after US President Donald Trump announced negotiations with Tehran on Monday.
Oil prices also declined as a sign of de-escalation in the Middle East war. This followed Trump's announcement on his Truth Social platform on Saturday evening that Iran and other Middle Eastern countries had requested time to finalize a deal that would lead to the 'immediate, full, and absolute' resumption of vital shipping lanes and the 'end of Iran's nuclear threat.'
Rupee Strengthening
Domestic benchmark indices gained at the start of trading due to the stronger opening of the Indian rupee against the US dollar. The rupee strengthened by 31 paise, opening at 95.12 per dollar, compared to Friday's close at 95.38, which improved investor sentiment.
This growth continued for five consecutive sessions of the national currency strengthening against the dollar. Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP, explained that the currency was supported by the sharp decline in the US Dollar Index to around 100, lower Brent crude prices, sustained portfolio inflows, and continuous participation from the Reserve Bank of India (RBI) in the foreign exchange market.
Strong First Quarter
Another factor contributing to the rise in benchmark indices was the robust state of the Indian corporate earnings season in the first quarter of the 2027 fiscal year. Many sectors reported healthy profit growth despite pressure from Oil Marketing Companies (OMCs). According to Motilal Oswal Financial Services (MOFSL), overall revenue momentum was stronger than expected, supported by confident performance in the banking, metal, technology, and automotive sectors.
MOFSL reported that the aggregate revenue in its portfolio of 211 companies grew by 2 percent year-over-year (Y-o-Y) for the June quarter, exceeding the broker's forecast of a 10 percent year-over-year decline. This was largely attributed to a less negative impact from OMCs than anticipated. Excluding OMCs, profits grew by 17 percent year-over-year, surpassing the broker's estimate of 13 percent growth. Revenue growth was led by the Banking, Financial Services, and Insurance (BFSI) sectors with a 20 percent year-over-year increase, followed by metallurgy, technology, and the automotive industry.
V. K. Vijayakumar, Chief Investment Strategist at Geojit Investments, stated that the already announced first-quarter results also exceeded expectations. He added that if this trend continues, profit growth for the 2027 fiscal year could be better than initial forecasts.
FII Inflow
After prolonged selling, foreign institutional investors shifted to a net positive balance in Indian equities. Exchange data showed that FIIs ended their series of large sales, adding ₹277.48 crore on July 31, 2026. FPI purchases amounting to ₹19,045.51 crore exceeded sales of ₹18,768.03 crore.
Similarly, domestic institutional investors continued their buying trend, recording a strong net inflow of ₹2,260.37 crore on the same day, with total purchases of ₹19,885.80 crore versus sales of ₹17,625.43 crore.
