India Set for New Highs as Global Equities Rally to Fresh Peaks

India’s equity benchmark retreated from a record as an early rally in Asian equities faltered.

The S&P BSE Sensex lost 1.6% to 43,828.10 at the close, while the NSE Nifty 50 Index declined 1.5%. Both slipped from all-time highs, as did the region-wide MSCI AC Asia Pacific Index, which was little changed.

“These levels could prove to be a resistance zone and there is every possibility we are witnessing investors book profits,” said Manish Hathiramani, a trader and technical analyst at Deen Dayal Investments in Kolkata.

Record net foreign buying so far this month through Monday has driven India’s stocks to new highs even as Asia’s third-largest economy heads for its first ever recession after the coronavirus pandemic hobbled business.

“We suggest taking opportunities to trade in quality names that are fundamentally strong and not get into other stocks, because there is an element of excess in the valuation of some companies,” said Deven Choksey, a strategist at KRChoksey Investment Managers Pvt. in Mumbai.

The yield on the benchmark 10-year government bond increased by one basis point to 5.89%, while the rupee advanced 0.1% to 73.9187 against the dollar.

The Numbers

  • All but one of 19 sector sub-indexes compiled by BSE Ltd. fell, with a gauge of telecom stocks dropping the most
  • Twenty-seven Sensex shares dropped, while three rose
    • HDFC Bank Ltd. was the biggest contributor to the index decline and dropped 2.5%; Kotak Mahindra Bank Ltd.’s 3.2% fall was the steepest

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