Banking and Energy Stocks Lead Recovery
HDFC Bank and Reliance Industries emerged as the top contributors to the rally, providing strong support to both the Sensex and Nifty. Power Grid Corporation rose more than 4.5%, while Coal India gained over 3%, boosting sentiment in the energy and PSU space.
The Nifty 50 closed up 0.8%, reflecting broad-based buying in select heavyweights. Realty and PSU Bank indices gained over 1.5%, with Canara Bank and Union Bank rising more than 2.5%. Signature Global climbed over 5% in the real estate segment.
However, the broader market showed mixed signals. The Nifty Midcap 150 advanced 0.4%, while the Nifty Smallcap 250 slipped 0.1%, indicating cautious participation beyond large-cap stocks.
Market Breadth and Sectoral Performance
Despite the strong headline numbers, market breadth remained tilted towards declines. On the BSE, over 2,500 stocks ended lower compared to around 1,800 advancing shares.
Sectorally, most indices ended in positive territory. The Nifty Energy index led the gains with a near 1.9% rise. On the other hand, the Nifty Auto index declined about 0.7%, emerging as the top sectoral loser.
IT stocks witnessed volatility through the session. While the Nifty IT index initially traded lower, select counters such as Coforge and Persistent Systems later recovered with gains of over 2% amid short covering.
Impact of RBI’s Brokerage Funding Norms
Brokerage and exchange-related stocks remained under pressure after the Reserve Bank of India tightened funding norms for brokers. The new rules, effective April 1, 2026, mandate a “cash-first” approach and require broker funding to be 100% secured.
Following the announcement, BSE shares dropped nearly 10% during the session, while MCX also witnessed sharp selling. Analysts believe the move could increase capital requirements and reduce leverage in the brokerage ecosystem.
Detailed regulatory updates are available on the Reserve Bank of India’s official website at https://www.rbi.org.in.
Key Corporate Developments
Several stock-specific developments influenced trading. Federal Bank approved a preferential allotment of warrants to a Blackstone affiliate as part of a Rs 6,200-crore investment deal, which could make Blackstone the bank’s largest shareholder post-conversion.
Natco Pharma shares jumped nearly 10% after receiving approval from the Central Drugs Standard Control Organisation (CDSCO) to manufacture and market a generic semaglutide injection in India.
Meanwhile, Coal India reiterated its renewable energy push, stating it has spent Rs 961 crore on solar capex till January 2026 and aims to install 3,000 MW capacity by FY28, targeting net-zero status by the same year.
Global Cues Support Sentiment
European markets opened higher as investors assessed developments from the Munich Security Conference. The pan-European STOXX 600 index gained around 0.2%, with France’s CAC 40, Germany’s DAX and the UK’s FTSE 100 trading in positive territory.
US markets remained closed for Presidents’ Day, leading to relatively lower global trading volumes. Asian markets were mixed due to holiday schedules in China, Taiwan and South Korea.
Commodity markets remained stable, with Brent crude trading below $68 per barrel and WTI hovering near $63. Gold prices in Mumbai were around Rs 1,56,240 per 10 grams, according to local market data.
Outlook for Tuesday
Investors will closely track India’s upcoming macroeconomic data, including unemployment rate and trade balance figures. China’s foreign direct investment data is also scheduled.
Market participants are expected to monitor options positioning around the 25,400–25,600 Nifty range, which analysts consider a key support-resistance zone.
After Monday’s strong rebound, traders will look for confirmation of sustained buying in banking and energy stocks to determine whether the recovery can extend further this week.
