Indian Stocks Rebound After Steepest Slide in Seven Months

Indian stocks rebounded after a sharp sell-off on Monday triggered by concerns about a new variant of coronavirus in the U.K.

The S&P BSE Sensex climbed 1% to close at 46,006.69 after a volatile session, and the NSE Nifty 50 Index gained by the same magnitude. Both gauges yesterday fell by the most since May, retreating from record highs set on Friday.

The slump allowed “investors who feel they have not participated in the rally to enter the market,” said Abhimanyu Sofat, head of research at IIFL Securities Ltd.

Global funds sold net 3.24 billion rupees ($44 million) of cash equities on Monday, while domestic investors bought about 5 billion rupees, according to exchange data. Foreign investors have pumped almost net $18 billion into India’s equities this quarter, the most on record.

India is among countries that have moved swiftly to shutter their borders with the U.K. amid fears a new strain will trigger more infections. Domestically, virus infections have crossed the 10 million mark as the world’s second-biggest hotspot awaits several emergency vaccine approvals.

“Investors should stay away and not buy on dips,” said Umesh Mehta, head of research at Samco Securities Ltd. “A correction is due because the market has had a fantastic up-move this quarter amid toppish valuations.”

The yield on the most-traded 5.77% 2030 sovereign bond fell one basis point to 5.95%, while the rupee fell 0.1% to 73.8488 per dollar.

The Numbers

  • All 19 sector sub-indexes compiled by BSE Ltd. advanced, with a gauge of IT stocks rising the most
  • Twenty five Sensex shares gained and five slumped
    • Infosys Ltd. was the biggest contributor to the index’s advance, rising 3.7%
    • Kotak Mahindra Bank Ltd. posted the steepest fall, declining 0.9%, and was the biggest drag on the index

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