India’s Sensex Index Advances for a Sixth Consecutive Week
India’s Sensex on Course for Sixth Consecutive Week of Gains
(Bloomberg) -- India’s benchmark equity index clocked its sixth week of gains as a positive start to company earnings and a gradual pick-up in economic activity supported sentiment.
The S&P BSE Sensex advanced 3% this week, to complete its longest stretch of weekly gains since April 2019. On the day, the gauge was little changed at 38,128.90, while the NSE Nifty 50 Index fell 0.2%. Both measures are trading above 70 on the the relative strength index, a level that may signal the gauges are overbought.
“The exuberance in the market led by initial positive indicators is mostly factored in and the next course of action should be a correction,” said Umesh Mehta, head of research at Mumbai-based Samco Securities Ltd. “We see investors booking profit on these gains, as reading between the lines of earnings commentary, recovery may take longer.”
The nation’s stock market has seen brisk buying by retail investors, including many first-timers, as a prolonged lockdown reduced returns from bank deposits and most other asset classes. Meanwhile, foreign investors bought $294.7 million of local stocks this month through Tuesday.
Equity demand remains stable despite a rise in new infections. India has 1.24 million coronavirus cases, the third-most in the world, according to data collected by Johns Hopkins University and Bloomberg News. Of those, 29,861 have died, while 782,607 have recovered.
Eight of 13 Nifty 50 companies that have reported results so far have either beaten or met analysts’ profit estimates, while two results weren’t comparable.
The rupee weakened 0.1% to 74.8275 per U.S. dollar, while the yield on the 10-year benchmark government bond rose two basis points to 5.83%.
The Numbers
- Sixteen of 19 sector sub-indexes compiled by BSE Ltd. declined Friday, led by a gauge of metal companies
- ICICI Bank Ltd. contributed the most to the Sensex decline, decreasing 2.7% while Axis Bank Ltd. had the largest drop, falling 3.3%
- Reliance Industries Ltd. provided the biggest boost to the index, advancing 4.2% to a record; HCL Technologies Ltd. had the biggest gain, rising 4.3%
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