Benchmark equity indices surged in early trade on Monday, buoyed by the announcement that India has become the world’s fourth-largest economy. Investor sentiment was further uplifted by the early onset of the monsoon, a record dividend payout from the Reserve Bank of India (RBI), and a reprieve on US tariffs.
The 30-share BSE Sensex leapt 562.31 points to 82,283.39, while the NSE Nifty climbed 175.7 points to 25,028.85.
Among the top performers on the Sensex were Mahindra & Mahindra, Tata Motors, Titan, ICICI Bank, Tech Mahindra, NTPC, Power Grid and Bajaj Finserv. Eternal emerged as the sole laggard in the 30-share index.
NITI Aayog Chief Executive Officer B.V.R. Subrahmanyam confirmed India had overtaken Japan to become the world’s fourth-largest economy.
“News of India becoming the fourth largest economy in the world would be a near-term morale boost for the market. RBI's bumper dividend payment to the government, exceeding the budget estimates, will help contain the fiscal deficit target for FY26 at 4.4 per cent. This, in turn, can sustain the low inflation and declining interest rate trend which will continue to support the equity market,” said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The RBI on Friday declared a record ₹2.69 lakh crore dividend for FY25, marking a 27.4 per cent increase over the previous financial year. The move is expected to bolster government finances amid tariff-related challenges and mounting defence expenditure due to tensions with Pakistan.
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Asian indices displayed mixed cues, with South Korea’s Kospi and Japan’s Nikkei trading higher, while Hong Kong’s Hang Seng and Shanghai’s SSE Composite traded in negative territory. US markets ended lower on Friday and will remain shut on Monday in observance of Memorial Day.
“As we start the week, Wall Street remains shut on Monday for Memorial Day. US stock futures are up after President Trump delayed 50 per cent EU tariffs to July 9,” said Prashanth Tapse, Senior Vice-President (Research), Mehta Equities Ltd.
Foreign Institutional Investors (FIIs) were net buyers on Friday, infusing ₹1,794.59 crore into Indian equities, as per exchange data.
The India Meteorological Department confirmed the early arrival of the southwest monsoon over Kerala on Saturday — the earliest since 2009 — further strengthening positive domestic cues.
“Domestically, Indian markets have shown greater resilience compared to global counterparts, supported by strong macroeconomic data and FIIs, who were net buyers to the tune of nearly ₹2,000 crore on Friday,” said Vikas Jain, Head of Research at Reliance Securities.
He further noted that the monsoon’s arrival, falling US Dollar Index, and a robust macroeconomic outlook would sustain investor confidence.
Global oil benchmark Brent crude rose 0.32 per cent to USD 64.99 a barrel.
On Friday, the Sensex had rallied 769.09 points (0.95 per cent) to 81,721.08, while the Nifty had advanced 243.45 points (0.99 per cent) to 24,853.15.
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