Shares hit six-week high, HDFC surge lifts banks

Indian shares rose more than 1{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} on Wednesday to their highest in over six weeks, tracking an improved global mood due to the easing of some coronavirus lockdowns, while a surge in HDFC pulled financial stocks higher.

While India’s own stringent restrictions remain largely in place, signs of easing in Europe and the United States and a return to business in Asia, have bolstered stock markets globally this week.

India’s two main stock indexes were on course for their third straight session of gains, with investors also expecting the government to deliver a long-awaited stimulus package to kick-start the economy.

The NSE Nifty 50 index was up 1.11{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} at 9,485.4 as of 0612 GMT, while the benchmark S&P BSE Sensex rose 1.06{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} to 32,451.97.

The Nifty Bank Index rose to its highest in more than a week, buoyed by a 2.8{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} rise in top private-sector lender HDFC Bank Ltd as well as the Reserve Bank of India’s move to ease the liquidity strain in the mutual funds industry.

Gains, however, were capped by a 6.5{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} drop in smaller rival Axis Bank Ltd after the lender reported a surprise $182.6 million loss for the fourth quarter due to COVID-19 related provisions, and provided a grim outlook.

“The current stock market direction is a result largely of coordinated moves that we are seeing across the world due to easing restrictions,” said Umesh Mehta, head of research at Samco Securities in Mumbai.

“RBI’s move to assuage the liquidity concerns in mutual funds earlier this week is still supporting banking stocks.”

MSCI’s broadest index of Asia-Pacific shares outside Japan, which rose 0.9{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58}, while oil prices jumped on hopes that demand will pick up.

Investors also awaited for any moves from the U.S. Federal Reserve, which is due to issue a policy statement at the close of its two-day meeting on Wednesday. The European Central Bank meets on Thursday.

The deadly virus continues to take its toll on lives in the India, with total cases standing at 31,332 and deaths rising to 1,007 of Wednesday morning.

Animal healthcare firm Hester Biosciences Ltd surged 20{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58} to its upper circuit after saying it was collaborating with the Indian Institute of Technology in Guwahati to develop a COVID-19 vaccine.

Moody’s Investors Service late on Tuesday cut India’s 2020 GDP growth forecast to 0.2{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58}.

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