Indian shares rise as banks and oil prices ease

Banks led the move. Financials, banks and private banks rose between 0.6% and 1.1%, with Axis Bank up 1.4% and Kotak Mahindra Bank jumping 3.8% after both lenders reported higher quarterly advances and deposits. That matters because private lenders carry heavy weight in benchmark indices and are closely watched as a read-through on credit demand, deposit mobilisation and margin resilience in an economy where loan growth has outpaced deposits for much of the past year.

The stock-specific response also underscored how investors are rewarding balance-sheet momentum even in a cautious macro environment. Stronger advances and deposit growth suggest private banks are still capturing share in retail and corporate lending, while a steadier deposit base can reduce funding pressure and support net interest margins. For index investors, that creates an important counterweight to concerns that higher rates could eventually squeeze borrowers and slow credit expansion.

A decline in crude oil below $100 a barrel provided another tailwind. Brent futures hovered near $101 a barrel after sliding overnight on increased Middle East exports and a Group of Seven pledge to raise supplies. Cheaper oil tends to support Indian equities by easing import costs, helping the current account and tempering inflation expectations, which in turn can give policymakers more room on rates. It also improves sentiment toward sectors sensitive to fuel costs and consumer spending.

Global cues were constructive as well, with Asian stocks tracking a technology-led rally in the US and European futures higher. But gains in Indian equities may be capped if US Treasury yields stay elevated, with the 10-year yield at 5.31%, because that keeps emerging-market valuations and foreign portfolio flows under pressure. In other words, the domestic rally is being helped by lower oil and stronger bank earnings, but it still has to compete with a tougher global rate backdrop.

Individual corporate updates added to the positive tone. Trent surged about 10% after guiding for a 23% year-on-year rise in standalone September-quarter revenue, while Godrej Consumer Products gained 2% after projecting high-teens revenue growth. Those moves reinforce the view that consumer-facing companies can still deliver growth, but Tuesday’s main market driver remained the financial sector, where stronger earnings and fresher optimism around credit conditions outweighed policy uncertainty.

For now, the near-term test is whether the Nifty can hold above the 22,700-22,800 zone. A sustained break higher would likely need continued crude weakness, benign policy commentary and follow-through buying in private banks. If rates rise and global yields keep climbing, the rally may prove more selective, favouring lenders with stronger deposit franchises and companies able to defend growth without stretching margins.