India’s public sector banks are witnessing a strong rally, driven by renewed foreign investor interest, speculation over higher FII limits, and improving balance sheets. The Nifty PSU Bank index has surged nearly 7% in a week, reflecting optimism about policy support and financial strength, though analysts caution the momentum may not last.

Indian government bonds declined in early trade as a weaker rupee and tight liquidity countered the Reserve Bank of India s move to cancel bond sales. The central bank s action, intended to signal discomfort with rising yields, briefly boosted the market. However, rupee defense interventions by the RBI have tightened liquidity, impacting demand for bonds.

High beta stocks in the BSE 500 index have experienced significant pain, with Aditya Birla Fashion topping the losers with a 73% fall. Out of 272 high volatility stocks, 135 have declined, with 100 recording double-digit losses. Siemens and Sterling and Wilson Renewable Energy also saw substantial drops.

Canara Bank shares surged 10% in three sessions to a fresh 52-week high on Monday, powered by strong Q2 earnings, improved asset quality, and renewed optimism in PSU banks. Investor sentiment was further boosted by speculation that the government may hike the foreign ownership limit in state-run lenders.

Shriram Finance shares rose after the NBFC reported a 7% YoY rise in Q2FY26 profit to ₹2,314 crore. Total income grew to ₹11,921 crore and interest income to ₹11,551 crore, while expenses increased to ₹8,808 crore. The company maintained steady profitability and improved asset quality.

Patanjali Foods shares fell sharply even as the company reported its best-ever quarterly revenue and strong profit growth. Standalone net profit surged 67.2% year-on-year. Revenue from operations jumped 20.9%. Profitability metrics also saw significant gains. The company achieved record performance on various parameters. Brokerage ICICI Securities maintained an Add rating with a target price of Rs 650.

Bank of Baroda shares jumped over 5% to a two-week high after Q2 results, as investors focused on improving asset quality and steady margins despite an 8% YoY profit drop to ₹4,809 crore. Interest income rose to ₹31,511 crore, and NII inched up to ₹11,954 crore, with brokerages remaining bullish on the stock.

Groww’s Rs 6,632 crore IPO, one of the year’s biggest fintech listings, draws cautious optimism amid strong fundamentals but steep valuation and regulatory uncertainty could cap near-term listing gains.

India s booming IPO market, now the world s fourth-largest, signals capital market maturity. However, investors are cautioned to carefully assess companies for solid fundamentals and clear profitability paths, as not all new listings possess strong underlying businesses. Global economic factors, including cooling oil prices and US-India partnerships, are expected to further bolster India s positive investment outlook.

Global equity markets are entering a new era driven by technology, policy, and demographics, says Vikas Pershad of M&G Investments. He expects long-term gains led by AI hardware, clean energy, and structural reforms in Asia. China’s rise in innovation and India’s improving macro setup will define the next growth phase, making Asia the focal point for global investors.