Equity benchmarks closed higher for the third consecutive session on Thursday, primarily driven by optimism surrounding potential US Federal Reserve rate cuts following mild inflation data, with PSU banks and defence stocks emerging as top performers.

The 30-share BSE Sensex gained 318.74 points or 0.42 per cent to close at 77,042.82, while the broader NSE Nifty50 advanced 98.60 points or 0.42 per cent to settle at 23,311.80. The positive sentiment was further bolstered by developments in Israel-Hamas ceasefire negotiations and India’s reduced trade deficit.

“Benchmark indices continued to trade in the positive, albeit off highs, driven by positive investor sentiment following mild US inflation data, which raised hopes for a potential rate cut by the Federal Reserve,” said Vinod Nair, Head of Research at Geojit Financial Services.

The broader market demonstrated exceptional strength, with the Nifty Midcap Select gaining 89 points or 0.73 per cent to close at 12,218.00, while the Nifty Next 50 surged 924.95 points or 1.45 per cent to end at 64,564.50. Market breadth remained decisively positive, with 2,778 stocks advancing against 1,188 declines on the BSE.

In the banking sector, which carries significant market weight, the Nifty Bank index rose 527 points or 1.08 per cent to close at 49,278.70. The Nifty Financial Services index also showed strength, gaining 263.65 points or 1.16 per cent to end at 22,943.75.

Among individual stocks, HDFC Life emerged as the top gainer on NSE, surging 7.99 per cent, followed by Bharat Electronics (3.60 per cent), SBI Life (2.89 per cent), Shriram Finance (2.58 per cent), and Adani Ports (2.23 per cent). On the flip side, Trent led the losses, declining 2.51 per cent, followed by Dr. Reddy’s Laboratories (-2.26 per cent), HCL Technologies (-1.95 per cent), Tata Consumer Products (-1.84 per cent), and Infosys (-1.52 per cent).

“The Nifty continued its upward momentum for the third straight session, driven by positive global sentiment. Trading activity strengthened with NSE cash market volumes rising 3 per cent compared to the previous session,” noted Devarsh Vakil, Head – Prime Research, HDFC Securities.

On the currency front, the rupee depreciated 16 paise to close at 86.56 against the US dollar, pressured by strong American currency overseas, elevated crude oil prices, and foreign fund outflows. Brent crude remained elevated at $81.93 per barrel.

Looking ahead, market experts suggest watching upcoming corporate earnings. “Markets will react to the earnings reports of major index constituents such as Reliance, Infosys, and Axis Bank in early trades,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.

Technical indicators showed improving momentum, with the Nifty facing immediate resistance at 23,460. “Above 23300/76900 the market could continue its bullish momentum toward 23,450-23,500/77500-77700,” predicted Shrikant Chouhan, Head Equity Research, Kotak Securities.

Foreign institutional investors (FIIs) remained net sellers, offloading equities worth ₹4,533.49 crore on Wednesday, while 98 stocks hit their 52-week highs compared to 63 touching their 52-week lows.