India’s benchmark equity indices opened the new week on a firm footing on Monday, extending the momentum from Friday’s session. The early gains were driven by a combination of steady foreign institutional inflows, renewed optimism around US interest rate cuts, and supportive global market cues.

At around 9:15 a.m. IST, the Nifty was trading 0.4 percent higher at 26,069.05, while the Sensex added 0.42 percent to 85,286.48. The advance comes after a strong close in the previous session, signalling that investors are willing to carry forward risk exposure rather than lock in gains at elevated levels.

Indian equities have remained resilient despite mixed global economic signals and periodic volatility in overseas markets. Over the past few weeks, flows from foreign institutional investors had turned uneven, raising concerns over whether domestic markets could sustain their premium valuations. The return of consistent FII buying over the last three sessions has helped ease those concerns, at least in the near term.

Friday’s session marked the third consecutive day of net FII inflows, with overseas investors buying shares worth ₹1,830.89 crore. This reversal has been closely tracked by market participants, given the outsized role foreign flows play in large-cap index movement.

The key shift supporting Monday’s opening trade is the improvement in global rate expectations. Traders are increasingly factoring in the possibility of two interest rate cuts by the US Federal Reserve in 2026, following a series of recent economic data releases that failed to decisively alter the inflation or growth outlook in the US.

Although the data did not provide strong confirmation of a slowdown, it also did not point to renewed inflationary pressure, keeping the door open for policy easing. Adding to this narrative are public remarks by US President Donald Trump, who has continued to push for more aggressive rate cuts, reinforcing expectations of political pressure on monetary policy.

For Indian markets, the direction of US interest rates remains a critical external variable. Lower global rates tend to support capital flows into emerging markets like India by improving relative yield attractiveness and reducing funding costs. Even the perception of future easing can be sufficient to drive short-term inflows, particularly into liquid large-cap stocks that dominate benchmark indices.

The early rise in indices also reflects the market’s sensitivity to global risk sentiment. US equity futures were trading up by as much as 0.3 percent in Asian hours, indicating a positive opening for Wall Street later in the day. Such cues often influence domestic traders during early market hours, especially in the absence of major domestic news triggers.