Sensex gains 374 pts, Nifty closes at 24,636; PSU banks lead rally

Indian equity benchmarks closed with solid gains on Thursday, extending the previous session's momentum. The BSE Sensex rose 374 points to settle at 81,972, while the NSE Nifty ended at 24,636, up 112 points. The rally was broad-based, with public sector bank (PSU) stocks leading from the front.

PSU banks steal the show

State-run lenders emerged as the standout performers of the day, with the Nifty PSU Bank index surging over 3 per cent. Investors piled into names like State Bank of India, Bank of Baroda, and Punjab National Bank amid expectations of improving asset quality and steady credit growth.

Analysts said the buying in PSU banks was driven by a mix of fresh inflows and short covering. The sector has been a favourite among domestic institutional investors, who have increased their allocation in recent months.

Broader market keeps pace

The broader indices also ended firmly in the green. The BSE Midcap and Smallcap indices gained around 0.8 per cent each, reflecting healthy risk appetite across the market. More than two stocks advanced for every one that declined on the BSE.

Sectorally, the Nifty Metal and Realty indices also posted strong gains, while the IT and FMCG packs lagged, capping the upside. The resilience in the market comes despite lingering concerns over global growth and crude oil prices.

What pulled the market higher

Market participants pointed to strong buying in heavyweight banking and financial stocks, which have a significant weightage in the indices. The Nifty Bank index closed up over 1 per cent, providing solid support to the benchmarks.

Foreign portfolio investors (FPIs) turned net buyers in the cash market, while domestic institutions continued to support valuations. The rupee traded flat against the US dollar, but the overall sentiment remained constructive.

Global cues and outlook

Asian markets ended mixed on Thursday, but European indices opened higher, offering some comfort to local traders. Investors are now watching key US economic data due later this week for cues on the Federal Reserve's rate trajectory.

Back home, the focus will shift to the upcoming quarterly earnings season and monsoon progress. Traders will also track crude oil prices, which have a direct bearing on India's fiscal maths and inflation.

With the Nifty holding above the 24,500 mark, technical analysts see the index consolidating in the 24,400-24,800 range in the near term. A decisive break above 24,800 could trigger fresh buying, while dips are likely to be bought into as long as the 24,300 support holds.