India Stocks Gain After a Volatile Day as the Economy Opens Up

(Bloomberg) -- India stocks gained, though the benchmark gauge still saw its worst week in four amid investor concern about the pace of a rally in equities.

The S&P BSE Sensex climbed 0.7% to 33,780.9 in Mumbai, rebounding from a drop of as much as 3.6%. The NSE Nifty 50 Index also reversed losses to gain 0.7%. Both measures are up more than 30% from a record drop on March 23.

Asia’s third-biggest economy is facing its first economic contraction in 40 years after a prolonged lockdown to curb the spread of the novel coronavirus. India’s cases of Covid-19 are the highest in Asia and continue to rise even as the nation begins easing the world’s biggest lockdown.

“Traders are taking a contradictory bet and buying now after the drop this morning. Bulls are trying to come back and short covering has already happened,” said Umesh Mehta, head of research at Samco Securities Ltd.

Automobile, energy, and telecom stocks rose the most with Reliance Industries Ltd. and Bharti Airtel Ltd. among the biggest contributors to gains on the benchmark index, advancing 3.3% and 1.5% respectively. “There are also expectations that the government may provide relief to telecom companies amid the lockdown,” Mehta said.

Eleven out of 36 Nifty 50 companies that have reported quarterly results so far have beaten or matched analyst estimates. Eicher Motors Ltd. is due to report today.

The Numbers

• Mahindra & Mahindra Ltd. was the biggest gainer on the Sensex index, rising 7.2%
• Thirteen of the 19 sector sub-indexes compiled by BSE Ltd. advanced, led by automobile stocks
• Infosys Ltd. contributed most to the Sensex decline, slipping 1.6% while Oil & Natural Gas Corp. had the biggest fall, sinking 3.4%.

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