Stocks Settle at Fresh Record High in India’s Diwali Session
(Bloomberg) -- Indian shares rallied to a record in the ceremonial evening session to mark Diwali, the Hindu festival of lights, as earnings of some of the country’s biggest companies bolstered optimism for a faster economic recovery.
The S&P BSE Sensex and NSE Nifty 50 gauges ended higher in the one-hour session, paced by oil and gas companies. Tata Steel Ltd. rose 1.1% while Oil & Natural Gas Corp Ltd. advanced 0.7% after both companies reported results for the September quarter overnight, bringing an end to the earnings season.
The centuries-old tradition of seeking the blessings of Lakshmi, the Hindu Goddess of Wealth, has taken on an added purpose this year as investors pray for a lifting of the pall of the coronavirus pandemic to help the economy emerge from a record contraction.
“With recent news on progress of an effective vaccine against covid-19, we appear closer to the end of a difficult period for society at large.” said S. Hariharan, head of sales trading at Emkay Global Financial Services Ltd., “Despite a year where governments have had to balance conflicting interests of physical well-being of citizens and economic stability, financial markets have largely worked efficiently in pricing risks and appear to point to an upcoming period of rapid progress.”
India’s key equity indexes have risen about 10% since last Diwali even as consumption was quashed by the world’s biggest lockdown, aimed at quelling the virus.
Analysts remain optimistic that a steady flow of dollars, low interest rates and a pick-up in demand seen in the last few months will help businesses recover.
The token purchases mark the beginning of the new Hindu financial year -- Samvat 2077 -- and the ritual has been observed for years in the belief that it brings wealth and prosperity. The Sensex has ended higher in nine of the past 13 Diwali-day sessions. Markets will be closed Monday.
The Sensex climbed 0.5% to end the special session at 43,637.98 and the NSE Nifty 50 Index advanced by the same amount to 12,780.25. On Friday, the gauges closed positive.
All 19 sector gauges compiled by BSE Ltd. traded higher during the session, led by the oil and gas index’s 1.5% gain. Of the 50 companies that make up the Nifty 50 index, 35 beat or matched analyst estimates for the quarter ended September, with the last two having brought the earnings season to a close on Friday.
“Everyone tries to make money throughout the year,”said Vivek Bajaj, co-founder of StockEdge, an education and research platform for retail investors, “But this is that one particular day in which it’s a new year and there’s hope, so you only think about the positive side of the market.”
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