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The S&P BSE Sensex climbed 0.9% to 37,766.99 as of 10:10 a.m. in Mumbai, set for a fifth straight session of gains that’s taken it above its 200-day moving average. The NSE Nifty 50 Index added 0.9% and has also breached the technical indicator, forming a pattern that some investors read as a signal that gains can continue.
Both measures have jumped more than 40% from a March low, while India’s economy heads for its first recession in 40 years after business all but stalled due to a nationwide lockdown. Individual investors have turned to equities for returns, even as foreign investors have sold net $437.5 million of shares this month through Friday.
“It is only in equities — that with some risk — one can make some returns as other asset classes aren’t performing well in these times,” said Chokkalingam G, head of the investment advisory at Equinomics Research & Advisory Pvt. in Mumbai. “The positive news on vaccine trials has added more impetus.”
While the spread of coronavirus has seen India emerge as host of the third-highest number of infections in the world, a vaccine under development by the University of Oxford and AstraZeneca (NYSE:AZN) Plc showed promising results in early human testing. China’s CanSino Biologics Inc. and a partnership of Pfizer Inc. (NYSE:PFE) and BioNTech SE (NASDAQ:BNTX) also delivered positive trial updates.
With earnings season underway, four of the six Nifty 50 companies that have announced the April-June quarterly results so far have either beaten or met analyst estimates on profits. Axis Bank Ltd., Hindustan Unilever (NYSE:UL) Ltd. and Bajaj Finance Ltd. are scheduled to announce results today.
The rupee strengthened 0.2% to 74.78 per U.S. dollar, while the yield on the 10-year benchmark government bond was little changed at 5.80%.
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