Indian equity markets closed higher on Monday, driven by strong buying in banking stocks, particularly HDFC Bank and SBI. Today, the markets are expected to open on a positive note, following solid cues from global markets. Foreign fund inflows are likely to support domestic sentiment, as Foreign Institutional Investors (FII) bought Indian equities worth Rs 404.42 crore on Monday, according to NSE data.

Adding to the optimism, a report from rating agency ICRA highlighted the benefits of above-normal monsoon rains during the Kharif season, predicting that agricultural growth would improve from 1.4% in 2023-24 to 3.2% in the 2024-25 financial year. ICRA also projected business opportunities worth Rs 2 lakh crore for engineering, procurement, and construction (EPC) companies over the next decade due to interlinking river projects. Meanwhile, India's push to become a $7-trillion economy by 2030 continues as Prime Minister Narendra Modi advances digital and physical infrastructure development, attracting global manufacturers. Additionally, Commerce and Industry Minister Piyush Goyal has called for Australian pension fund investments in sectors such as renewable energy and manufacturing.

In the fast-moving consumer goods (FMCG) sector, rural demand recovery is expected to boost growth, with rural consumption beginning to outpace urban consumption.

Globally, Asian markets traded mostly in the green on Tuesday after China introduced several policy easing measures. The People's Bank of China (PBOC) announced a reduction in the reserve requirement ratio for banks and a cut in the seven-day reverse repurchase rate. In the U.S., markets also closed higher on Monday as traders built on gains following the Federal Reserve’s recent interest rate cut.

Domestically, Indian markets rose for the third consecutive day on Monday, setting new record highs, supported by foreign fund inflows and a positive trend in Asian markets. FIIs bought equities worth Rs 14,064.05 crore on Friday, and India's foreign exchange reserves rose by $223 million to an all-time high of $689.458 billion. The Reserve Bank of India reported that net foreign direct investment (FDI) during the April-July period of FY25 increased to $5.5 billion compared to $3.8 billion in the previous year. Despite some concerns over slowing business activity, particularly in the manufacturing and services sectors, the overall sentiment remains positive as India is expected to achieve 7% growth in the current fiscal year.

The BSE Sensex gained 384.30 points (0.45%) to close at 84,928.61, while the CNX Nifty rose by 148.10 points (0.57%) to 25,939.05.