(Bloomberg) — India stocks advanced, tracking Asian peers, as promising results in early trials for a coronavirus vaccine and a positive start to local companies’ earnings season bolstered optimism.
The S&P BSE Sensex climbed 0.9% to 37,766.99 as of 10:10 a.m. in Mumbai, set for a fifth straight session of gains that’s taken it above its 200-day moving average. The NSE Nifty 50 Index added 0.9% and has also breached the technical indicator, forming a pattern that some investors read as a signal that gains can continue.
Both measures have jumped more than 40% from a March low, while India’s economy heads for its first recession in 40 years after business all but stalled due to a nationwide lockdown. Individual investors have turned to equities for returns, even as foreign investors have sold net $437.5 million of shares this month through Friday.
“It is only in equities — that with some risk — one can make some returns as other asset classes aren’t performing well in these times,” said Chokkalingam G, head of the investment advisory at Equinomics Research & Advisory Pvt. in Mumbai. “The positive news on vaccine trials has added more impetus.”
While the spread of coronavirus has seen India emerge as host of the third-highest number of infections in the world, a vaccine under development by the University of Oxford and AstraZeneca Plc showed promising results in early human testing. China’s CanSino Biologics Inc. and a partnership of Pfizer Inc. and BioNTech SE also delivered positive trial updates.
With earnings season underway, four of the six Nifty 50 companies that have announced the April-June quarterly results so far have either beaten or met analyst estimates on profits. Axis Bank Ltd., Hindustan Unilever Ltd. and Bajaj Finance Ltd. are scheduled to announce results today.
The rupee strengthened 0.2% to 74.78 per U.S. dollar, while the yield on the 10-year benchmark government bond was little changed at 5.80%.
All but two of 19 sector sub-indexes compiled by BSE Ltd. advanced, led by a gauge of realty stocksReliance Industries Ltd. contributed the most to the Sensex advance, increasing 1.9% while Maruti Suzuki India Ltd. had the largest gain, rising 3.3%Hindustan Unilever Ltd. was the biggest drag on the index and had the biggest drop, declining 0.5%
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