Rally in Ambani’s Reliance Helps Indian Stocks Cap a Weekly Gain
“The rally in Reliance has lifted the entire market, backed by the company’s deals and stake sales.”
(Bloomberg) -- Indian stocks recorded a third weekly gain within four weeks after shares of billionaire Mukesh Ambani’s Reliance Industries Ltd., India’s largest by market cap, rose to a record amid reports of possible deals.
Helped by Reliance’s rally, the benchmark S&P BSE Sensex rose 1.3% for the week, overcoming global volatility and local economic and geopolitical challenges. The conglomerate’s shares have risen 12% this week as people familiar said Amazon.com Inc. and KKR & Co. are in talks to buy stakes in its retail business.
Indian equities have so far rebounded despite a host of challenges ranging from a still-rampant virus outbreak to a shrinking economy and border clash with China. The Sensex has risen about 50% from a low in March even as India saw its worst economic contraction on record in the June quarter, and it seems inevitable that the nation will at some point overtake the U.S.’s Covid-19 caseload.
“The rally in Reliance has lifted the entire market, backed by the company’s deals and stake sales,” said Sameer Kalra, a strategist at Mumbai-based Target Investing. “Still, the risk-reward has started diminishing, and valuations are expanding for both Reliance and the market,” he added.
While the Sensex index closed little changed on Friday, 17 of BSE Ltd.’s 19 sub-indexes rose, led by an advance in real estate companies.
The yield on India’s benchmark 10-year government bonds fell one basis point to 6.04%, while the rupee weakened 0.1% to 73.53 per dollar.
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