India stocks rose at the end of a volatile trading day as investors mulled the outlook for economic growth against corporate risks as the coronavirus continues to spread.
In a highly volatile trading session, the BSE benchmark Sensex ended 187 points higher while the Nifty settled near 10,800.
Including yesterday’s close, the indexes have gained around 5% over the last five sessions, and more than 40% from four-year lows hit in March when virus fears had pummelled markets.
Bajaj Finance, the top gainer in the Nifty, jumped 7.8% after it said assets under a moratorium offered by the central bank had fallen at June-end. Private-sector lender IndusInd Bank Ltd climbed 6.1%, while larger rival ICICI Bank Ltd advanced 3.9%, pushing the Nifty Bank Index 1.9% higher.
Signs of economic growth are emerging in India as business gradually reopens from a prolonged lockdown. Still, India’s coronavirus epidemic has become the third biggest in the world as infections surged after containment was eased.
“By all parameters this rally looks overstretched,” said Rajat Bose, an independent market analyst based in Kolkata, “Breaching the 200-day moving average would be a signal to take some money off the table.”
The yield on the benchmark 10-year government bond fell to 5.79%. The rupee weakened 0.3% to 74.9350 per US dollar.
Twelve of 19 sector sub-indexes compiled by BSE Ltd fell, led by a gauge of oil and gas companies. Reliance Industries Ltd was the biggest drag on the index with a 1.5% decline; Infosys Ltd gave the biggest boost to the index with a 4% gain, Bajaj Finance Ltd was the biggest winner, netting a 7.8% jump.
Meanwhile the rupee yesterday fell sharply to settle 25 paise lower at 74.94 against the US dollar amid strengthening American currency and volatile trade in the domestic equity market. After opening at 74.74 at the interbank forex market, the rupee lost further ground to hit 74.97 at day’s low. It had closed at 74.69 against the US dollar in the previous session.
Forex traders said foreign fund inflows and easing crude oil prices supported the rupee, while, factors like strong dollar and rising Covid-19 cases down the local unit.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.20% to 96.86.
“Rupee extended losses today on dollar buying by foreign banks likely for foreign fund outflow. Global market specially EURO opening lower helped the USD-INR pair scale ahead towards near 75.00,” said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth ?348.35 crore on Monday, according to provisional exchange data.
“Broadly, rupee has changed its trajectory and thereby the range for the pair shall now be within 73.00-75.50 levels for the next few months, said Amit Pabari, MD of CR Forex Advisors.
Brent crude futures, the global oil benchmark, fell 0.58% to $42.85 per barrel.
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