The Nifty 50 and Sensex rose on Monday, lifted by better-than-expected earnings from Reliance Industries and steady foreign inflows, helping markets shrug off some risk-off sentiment amid India-Pakistan tensions.
Reliance Industries jumped 5.26% and hit a six-month high, contributing a third to the Nifty 50's gains after its fourth-quarter profit beat prompted analysts to upgrade the stock and hike their price targets.
Despite tensions between India and Pakistan after the attack in Kashmir last week, foreign portfolio investors (FPIs) remained buyers of Indian stocks for the eighth consecutive session on Friday, further aiding sentiment.
"There was a lot of fear that something could happen on the border. The fact that nothing (major) has happened has given some hope to the market," said G Chokkalingam, founder and head of research at Equinomics Research.
Besides this, expectations of a bilateral trade agreement between India and the U.S., New Delhi's relative resilience to tariffs compared to China and interest in attractively valued large-caps such as Reliance could keep markets buoyant, Chokkalingam said.
Heavyweight financials, which have significant foreign investor exposure, rose 1% on Monday, while IT closed 0.2% lower. The IT index gained 6.6% last week.
The broader mid- and small-caps rose 0.8% and 1.6%, respectively.
Among other stocks, Mahindra & Mahindra jumped 2.3% and was among the top six Nifty gainers after it announced plans to acquire a majority stake in SML Isuzu for 5.55 billion rupees.
However, SML Isuzu tumbled 10% as the deal valued its shares at a 63.3% discount to Friday's closing price.
Defence stocks jumped 4.1%. India signed a deal with France on Monday to buy 26 Rafale fighter aircraft worth $7.41 billion for its navy, an official from India's defence ministry told Reuters.
