Indian markets rose on July 6 as major private banks reported double-digit growth in loan advances for the June quarter. Sustained buying by foreign investors and lower global crude oil prices supported the sentiment. Banking stocks outperformed the broader market during early trading.
Indian stock markets opened the week on a positive note on July 6, with the Nifty crossing the 24,350 mark. The primary driver for this momentum was a series of strong business updates released by leading private sector banks regarding their performance for the April-June period. As banks hold significant weight in the Nifty and Sensex indices, their positive updates directly influenced overall market sentiment.
Leading private lenders shared robust growth figures that caught the attention of investors. HDFC Bank reported a 15.4% increase in gross advances alongside a 14.7% rise in total deposits. Axis Bank also showed strong momentum with an 18.8% growth in its gross advances. Meanwhile, Kotak Mahindra Bank recorded net loan growth of 15.1% for the period. IndusInd Bank reported a 3.3% sequential growth in net advances and a 3.8% increase in deposits for the June quarter.
The banking sector index, Bank Nifty, rose by 0.65% in early trading, clearly outpacing the gains seen in broader market indices. While most banks reported healthy loan growth, market analysts pointed out that performance varied across the sector. For instance, while HDFC Bank and IndusInd Bank saw loan growth figures that exceeded some market expectations, Kotak Mahindra Bank experienced a slight moderation in its growth pace compared to earlier periods.
External factors also provided a tailwind for the market. Data showed that foreign institutional investors were net buyers for the third consecutive session, adding Rs 1,355 crore to their holdings on Friday. This renewed interest from global investors is often linked to shifts in macroeconomic indicators. A key factor supporting this trend is the drop in global crude oil prices, which have dipped below $72 per barrel. Since India is a major importer of crude oil, lower prices help reduce pressure on the country's trade balance and currency stability, which typically benefits the financial services sector.
At 09:18 am, the Sensex had climbed 304.70 points to reach 78,068.61, while the Nifty stood at 24,356.40, reflecting a gain of 0.35%. Market breadth remained healthy, with a higher number of shares advancing compared to those declining. Moving forward, investors will be closely monitoring whether the momentum in loan growth continues for the rest of the year and how these banks manage their deposit costs in a changing interest rate environment. The sustainability of foreign inflows and the stability of global energy prices will also be essential factors for the market to maintain its position above the 24,300 support level.