Indian Stocks Advance After Trading Restricted by Power Outage
Indian Stocks Extend Gains After Posting Best Week Since June
(Bloomberg) -- India’s stock benchmark ended the day with gains, even after large parts of the country’s financial capital saw its worst blackout in decades because of a grid failure.
The S&P BSE Sensex closed up 0.2%, eroding an advance of as much as 1% after a power outage in Mumbai disrupted trading activity although the nation’s biggest stock exchanges continued to function normally. The NSE Nifty 50 Index rose 0.1%. Both measures are close to erasing year-to-date losses.
“Most brokers are working from home and are limited by the battery power in their laptops,” said Deven Choksey, managing director at KRChoksey Investment Managers Pvt. Power was restored in most parts of Mumbai later in the day.
With investors optimistic about central bank policy in Asia’s third-largest economy as it reopens, the government today unveiled measures worth $6.6 billion to stimulate consumer demand and investment. On Friday, the bank signaled that inflation is easing as it rolled out measures to ease a cash crunch among retail borrowers. The steps may help accelerate a revival, with a Jefferies Financial Group Inc. model tracking economic recovery showing that activity in India is already at 93% of pre-coronavirus levels.
The policy response, strong corporate action through the pandemic and a starting point of attractive relative valuations have helped India’s stock market performance, Morgan Stanley strategists led by Ridham Desai wrote in a note. However, “we expect heightened volatility as the market deals with fuller valuations and extended sentiment indicators,” they added.
The Sensex is currently trading at about 21 times forecast earnings, more than two standard deviations above its five-year average.
Sovereign bonds advanced, with the yield on benchmark 10-year notes falling by four basis points to 5.90%. The rupee rose 0.2% to 73.2738 per dollar.
The Numbers
- Four of the 19 sector indexes compiled by BSE Ltd. rose, led by a gauge of IT companies
- Infosys Ltd. added 2.2% and contributed the most to the Sensex’s advance, while HDFC Bank Ltd. was the biggest drag and dropped 1.7%
- Vedanta Ltd. fell 20%, its biggest decline since 2008, after the Indian commodities giant failed to get approval from minority shareholders to delist
Market-related stories
- Vedanta’s Dollar Bonds Plunge After Unit Delisting Offer Fails
- Reopenings Lend Impetus to Indian Shares: Taking Stock
- Covid and Taxes Eat Away at Diesel’s Edge Over Gasoline in India
©2020 Bloomberg L.P.