Early Signs of Economic Revival Extend India’s Equity Rebound
(Bloomberg) -- Indian stocks rose for a third straight session on signs of a revival in economic growth even as coronavirus cases continue to rise.
The S&P BSE Sensex climbed 0.5% at the close in Mumbai, marking its highest close since March 6. The measure scored a third consecutive weekly gain, the longest stretch since November. The NSE Nifty 50 Index also added 0.5% on Friday. Gains in global equities after a better-than-expected U.S. jobs report gave a further boost to sentiment.
Asia’s third-biggest economy has seen a fall in the jobless rate and a rebound in the manufacturing purchasing managers index for June amid a gradual easing of lockdown rules. Earlier this week, the government pledged to support the nation’s poorest for an extended period, while the central bank asked the State Bank of India to indirectly buy debt from shadow lenders to ease the pressure on the economy.
“There is ample liquidity in the system and the rural economy is improving with the demand for tractors and two-wheelers coming back,” said Abhimanyu Sofat, head of research at IIFL Securities Ltd. in Mumbai.
India is facing its first contraction in gross domestic product in more than four decades and has the fourth-highest number of coronavirus infections globally. The South Asian nation has reported 604,641 cases and 17,834 deaths, according to data from John Hopkins University and Bloomberg News. Nearly 359,860 have recovered.
The rupee strengthened 0.5% versus the U.S. dollar to 74.6413, its highest close since March 18. The yield on the 6.45% 2029 government bond rose 1 basis point to 5.97%.
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