A trader smiles while working at a stock brokerage in Mumbai, India. (Photographer: Adeel Halim/Bloomberg News)

Powell's Dovish Tone Makes India a Top Asian Stock Market Today

(Bloomberg) -- India’s stocks rallied, joining most markets across Asia, after a dovish tone from the Federal Reserve chief fueled speculation the U.S. central bank may pause raising interest rates next year, and help drive capital flows into emerging markets.

The benchmark S&P BSE Sensex touched a two-month high, advancing 1.3 percent to 36170.41 at the close in Mumbai, its biggest four-day gain since May 2016. The NSE Nifty 50 Index rose 1.2 percent. Overseas investors bought net shares worth $558.6 million this month through Nov. 27 after three months of net selling, according to data compiled by Bloomberg.

The Numbers

  • Fifteen of the 19 sector sub-indexes compiled by BSE Ltd. gained, led by the S&P BSE Metal Index and the S&P BSE Bankex Index, which climbed 2 percent and 1.8 percent respectively.
  • HDFC Bank Ltd. and Reliance Industries Ltd. provided the biggest boosts to the main benchmark, while Bajaj Auto Ltd. and Kotak Mahindra Bank Ltd. were the top performers.
  • The November derivative contract will expire today.
Powell's Dovish Tone Makes India a Top Asian Stock Market Today

Strategist View

  • “The Fed chairman’s statement suggests that the U.S. central bank is reversing its stance from aggressive rate increases and that has provided the fillip to the market,” said A. K. Prabhakar, head of research at IDBI Capital Market Services Ltd. in Mumbai.
  • “The positive momentum may not continue for long as investors will start factoring in the outcome of elections as different states go to polls. The current rally is providing a good exit.”
    • Votes in five state elections held this month and next will be counted on Dec. 11. Exit polls are expected after markets close on Dec. 7.

©2018 Bloomberg L.P.