The rally in Indian stocks showed no signs of abating on Wednesday as investors continued to bet that easing of the nationwide lockdown will reboot economic growth. The rupee gained for a fourth day, while sovereign bonds were steady.
The S&P BSE Sensex and the NSE Nifty 50 Index climbed 1.1% each as of 10:57 a.m. to the highest in almost three months — levels seen before the world’s toughest stay-at-home curbs were imposed late March. Still, the Sensex is down about 17% for the year, more than double the drop in the regional MSCI Asia Pacific Index.
“The buoyancy is due to the opening up of economy locally and on the global front as well,” said Ajit Mishra, vice president of research at Religare Broking Ltd. in Mumbai. “We were underperforming global markets, which had been rallying for almost three weeks whereas our recovery began last week. We are catching up.”
India’s easing of restrictions will see malls, restaurants and places of worship reopening from June 8 as the country attempts to revive an economy that’s headed for its first full-year contraction in more than four decades. The nation’s services sector activity picked up in May, after posting the world’s lowest reading in April, data published by IHS Markit showed on Wednesday.
“It doesn’t make sense to look at the deteriorating numbers of the past for the stock market,” said Deven Choksey, managing director at Mumbai-based KR Choksey Securities Pvt. “Investors will continue to focus on the reopening of the economy and the stimulus given by the global central banks.”
Meanwhile, Mumbai is bracing for a cyclone that is likely to disrupt business in a city that’s already facing the brunt of a virus outbreak. The outbreak in the nation’s financial hub has snowballed, with the city now accounting for more than a fifth of India’s over 5,800 deaths and about 207,000 infections.
The rupee rose 0.1% to 75.2675 per dollar, while the most-traded 6.45% 2029 bond yield was steady at 6%. 18 of 19 sector sub-indexes compiled by BSE Ltd. advanced, led by a measure of bank stocks.
HDFC Bank Ltd. contributed most to the index advance while Mahindra & Mahindra Ltd. was the biggest drag. Bajaj Finance Ltd. was the steepest gainer with 4.6% gain and NTPC Ltd. was the biggest loser with 0.2% decline.