India’s stock markets opened on a positive note Friday morning after three straight sessions of losses, thanks to gains in financial stocks following regulatory easing by the Reserve Bank of India (RBI). However, optimism was tempered by rising geopolitical tensions in the Middle East, which kept overall gains in check.
As of 10:12 a.m. IST, the NSE Nifty 50 rose 0.48% to 24,912.5 while the BSE Sensex climbed by an equal margin to 81,748.89. Twelve out of the 13 major sectoral indices registered gains, led by financial and infrastructure-linked stocks that benefitted from a major policy shift by the RBI. Despite the uptick, global instability continues to loom large over investor sentiment.
RBI Move Spurs Financial Rally
Financial stocks gained momentum after the RBI announced a relaxation in its rules related to infrastructure project financing. The central bank said it would ease provisioning requirements for both under-construction and operational infrastructure projects, starting from October 2025. This move effectively lowers the cost of funding for banks and is expected to increase credit availability for infrastructure development.
State-run banks were the biggest beneficiaries, with the Nifty PSU Bank index rising 0.8%. The broader Nifty Financial Services index was up 0.5%. Power sector financiers, such as Power Finance Corporation and REC Ltd, surged nearly 3% each on the news. Citi Research described the RBI’s decision as “distinctly softer” and “lender-friendly,” calling it a positive move for the sector.
Mid-cap and small-cap indices also posted gains of around 0.5%, reflecting a broader positive sentiment in the market driven by domestic policy changes.
Geopolitical Tensions Cap Market Enthusiasm
However, the enthusiasm on Dalal Street was moderated by fresh concerns over rising tensions in the Middle East. Overnight developments included Israel’s bombing of Iranian nuclear sites and Iran’s retaliatory missile and drone attacks. The situation escalated further with speculation about a potential U.S. military intervention, as the White House indicated President Donald Trump would decide within two weeks whether to support Israel militarily.
Market experts warned that this geopolitical uncertainty could increase volatility. “Markets have opened firm after a three-day losing streak, but investors remain on edge over escalating Middle East tensions,” said Prashanth Tapse, senior vice president of research at Mehta Equities. He added that in such an environment, volatility may well become the new norm.
Stock-Specific Movements
In individual stocks, Sun TV Network took a sharp hit, falling by 4% following media reports that Indian lawmaker Dayanidhi Maran had issued a legal notice to his brother Kalanithi Maran—Sun TV’s chairman—over alleged irregularities in ownership structure. The development raised concerns among investors, contributing to the stock’s decline.
Meanwhile, retail giant Trent and defence manufacturer Bharat Electronics both saw 1% gains after being added to the BSE Sensex index. On the flip side, IndusInd Bank slipped 0.1% after being dropped from the index, reflecting the index-based reshuffling effect on investor actions.
While domestic reforms have provided some short-term comfort to investors, the broader market remains sensitive to external risks, particularly geopolitical developments that could influence global energy markets and economic stability. As a result, while Friday saw modest gains, the underlying sentiment continues to be cautious.
