India Stocks Head for New Highs as RBI Pledges to Drive Recovery
(Bloomberg) -- India’s stocks rose as benchmarks headed toward their longest weekly winning streaks since July after the nation’s central bank said measures to support growth remain a priority.
The S&P BSE Sensex added 0.8% to 44,993.58 as of 10:54 a.m. in Mumbai, while the NSE Nifty 50 Index climbed by the same magnitude. Both gauges have added at least 1.9% this week and are set to close at new record highs after a fifth straight week of gains.
India’s monetary policy will remain accommodative, Reserve Bank of India Governor Shaktikanta Das said, after keeping the key interest rate unchanged as inflation remains elevated.
The central bank forecast the economy will contract 7.5% in fiscal 2021, revising its earlier prediction of a 9.5% decline.
“The RBI’s assurance of ample liquidity provides a lot of comfort to the market,” said Kranthi Bathini, a strategist at Mumbai-based WealthMills Securities Ltd. “The door for more easing remains open.”
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Foreign net equity purchases of $16.6 billion this year through Dec. 2 are already the most since 2013 as investors chasing returns have poured funds into India’s market.
The rupee strengthened 0.3% to 73.7250 per U.S. dollar, while the yield on 10-year government bonds fell four basis points to 5.89%.
- Seventeen of 19 sector indexes compiled by BSE Ltd. rose, led by a gauge of metal companies
- ICICI Bank Ltd. contributed the most to the Sensex advance, increasing 2.3%, while UltraTech Cement Ltd. had the largest gain, rising 5.5%
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