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India's Sensex Continues to Gain on Optimism Modi Will Drive Economic Growth

India's Sensex Continues to Gain on Optimism Modi Will Drive Economic Growth

(Bloomberg) -- Indian equities closed at a new record for a fourth day in five on continued optimism that Prime Minster Narendra Modi will adopt more policies to support slowing growth in Asia’s third-biggest economy.

The benchmark S&P BSE Sensex rose 0.8% to 39,831.97 at the close in Mumbai, while the NSE Nifty 50 Index gained 0.7%. Both measures closed at new all-time highs after retreating in the previous session. Arresting an economic slowdown and nursing the nation’s financial sector back to health will be the immediate priorities for the next administration, scheduled to take office today.

Economists estimate a report Friday will show the pace of economic growth in the three months through March was the slowest in almost two years, while the central bank meets June 6 to decide on monetary policy. Stepping into his second term, Modi may initially focus on infrastructure development and spending on farmers to buoy the economy.

The benchmark gauge is heading for a third straight month of gains even as the the trade tensions between U.S.and China have weighed on the MSCI Asia Pacific Index.

Strategist View

  • “We expect markets to trade with a positive bias before the policy meeting as the expectation of a rate cut is being priced in,” said Sameer Kalra, president of Mumbai-based advisory Target Investing.

The Numbers

  • Fourteen of the 19 sector indexes compiled by BSE Ltd. advanced, led by a gauge of power stocks.
  • Twenty of the 31 Sensex members and 31 of the 50 Nifty companies rose.
  • NTPC Ltd. and Bharti Airtel Ltd. were the top gainers on the benchmark. Mahindra & Mahindra Ltd. was among the top losers as the company said weak rural demand will weigh on volume growth after quarterly net income missed the consensus analyst estimate.
  • Of the 48 Nifty companies that have announced their results so far, 29 have either met or exceeded analyst estimates.

Analyst Notes/Market-Related Stories

  • Biggest Indian Bank Sees Opportunities in Shadow Loan Crisis
  • India’s Growth Rout Calls for Policy Boost -- Tracker: Economics
  • RBI Extends Relaxation on Guidelines to NBFCs on Securitization

To contact the reporter on this story: Abhishek Vishnoi in Singapore at avishnoi4@bloomberg.net

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Margo Towie, Namitha Jagadeesh

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