Indian stocks advanced for the first time in four days, tracking a regional rally after early vaccine results sparked speculation economies could rebound quickly.
The S&P BSE Sensex rose 0.6% to close at 30,196.17 points in Mumbai, while the NSE Nifty 50 Index gained by as much, though the indexes came off the day’s high level. The rupee rose 0.4% to 75.64 per dollar yesterday, while the yield on most-traded 6.45% 2020 bonds fell two basis points to 6.04%.
“The possibility of a vaccine will bring temporary relief to the market,” said Abhimanyu Sofat, head of research at IIFL Securities Ltd in Mumbai. “Overall challenges of reviving the economy after the lockdown will continue to impact prospects for the market.”
While extending its lockdown to May 31, India eased curbs on some businesses, driving a surge in fuel sales in the first half of May from a month earlier as some commerce resumed. Still, the economy is headed for its worst ever recession, Goldman Sachs predicts.
India has 100,328 Covid-19 infections and 3,156 deaths, according to data from John Hopkins University. Government stimulus equivalent to 10% of the economy unveiled since February may fall short of tackling the near term challenges posed by the pandemic, strategists forecast.
Of the 19 Nifty 50 companies that have reported March quarter results so far, only five have beaten estimates. Bharti Airtel Ltd posted a fourth-straight quarterly loss after Monday’s market close.
Thirteen of 19 sub-indexes compiled by BSE Ltd advanced, led by a gauge of telecom companies.
Bharti Airtel Ltd gave the biggest boost to the Sensex and was the steepest gainer with a 11.3% advance. Reliance Industries Ltd was the biggest drag and Indusind Bank Ltd was the biggest loser with a 2.4% drop. Meanwhile the rupee rose 27 paise or 0.36% to close at 75.64 against the US dollar yesterday as initial success in coronavirus vaccine trial boosted investor sentiment globally.
Forex traders said besides the encouraging results in covid-19 vaccine trial, higher opening of domestic equities and weakening American currency supported the local unit.
On Monday, the rupee had closed at 75.91 against the US dollar. From the start of the year, the rupee has lost 5.63%.
Ten-year government bond yield closed at 5.77 unchanged from previous close.
The rupee closed amid improving risk appetite after encouraging data from the trial of a vaccine for covid-19. “Initial data from Moderna Inc’s covid-19 vaccine showed that it produced protective antibodies in a small group of healthy volunteers,” Reliance Securities said in a research note.
Moreover, optimism about resumption in economic activity could aid sentiments after shops and restaurants re-opened in Italy, while other centres of the outbreak such Spain and Portugal will gradually lift restrictions, it added.
The Indian government on Sunday extended the coronavirus lockdown for two more weeks with the fourth phase providing more relaxations outside containment zones.
The benchmark index, Sensex gained 0.86% or 256.96 to trade at 30,285.94 and broader Nifty rising 78.55 points or 0.89% to 8,988.85.
From the beginning of the year, Foreign Institutional investors (FII) were net sellers in the capital market, as they offloaded equity shares worth $5.04bn and Domestic Institutional investors (DII) have net buyers of Rs75994.96 crore of Indian equities.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.02% down at 99.64.
Brent crude futures, the global oil benchmark, rose 0.34% to $ 34.93 per barrel.