In Charts: India’s Nifty 50 Crosses 16,000 For First Time
The 50-stock gauge has moved from 15,000 to 16,000 in 55 trading sessions starting May 18, rising more than 7% during the period.
India’s Nifty 50 surpassed 16,000 for the first time as investors derived optimism from an increased pace of vaccination, a rebound in foreign inflows and more government support to aid the recovery after the deadlier second wave of the pandemic.
The 50-stock gauge has moved from 15,000 to 16,000 in 55 trading sessions starting May 18, rising more than 8% during the period, according to Bloomberg data. The pace, however, was much slower than the 26 sessions it took to gain the previous 1,000 points.
The Nifty 50 has gained nearly 15.4% so far this year. That’s almost more than the index’s rally in the entire 2020 and the best since 2017.
The gauge has now more than doubled from its 52-week low of 7,511, touched on March 24, 2020, when the coronavirus pandemic roiled equity markets globally.
The Nifty 50 saw a one-way recovery as stimulus measures and Covid-19 vaccination raised hopes of a faster-than-anticipated economic recovery. An extended period of low-interest rates in the U.S. that diverted foreign funds into riskier emerging markets such as India buoyed the nation’s benchmarks.
Overseas funds have bought a net $6.37 billion worth of local stocks so far this year, the third-most among Asian markets tracked by Bloomberg, overcoming concerns about high equity valuations.
Leaders & Laggards
Tech Mahindra Ltd. was the top performer on the Nifty 50 after the Indian software company’s earnings for the three months ended June beat consensus estimate of analysts, driven by a strong performance across all business verticals and deal wins.
The company’s quarterly contract wins of $815 million lend confidence to its aspirations of double-digit revenue growth this fiscal, Manik Taneja and Vishnu KG, analysts at JM Financial Institutional Securities, said in a note.
On the other side, Dr. Reddy’s Laboratories Ltd., one of India’s largest drugmakers, emerged as the nation’s worst-performing stock amid a U.S. probe and as its first-quarter results disappointed.
The NSE Nifty Realty was the best-performing sectoral index as the formalisation of the sector and hopes of a demand revival triggered a rally in property stocks.
“We have seen a good turnaround from the real estate sector after the hit from the Covid-19 pandemic,” said Yash Gupta, equity research associate at Angel Broking Ltd. “We expect the real estate sector to outperform and this may be a start of a new upcycle after consolidation in the last 10 years.”
The Nifty Auto Index lagged as the local lockdowns to curb the deadlier second wave of the pandemic forced automakers to stall production and dealers to shut showrooms, hurting a nascent recovery in the sector.