Indian shares jumped on Wednesday, spurred by strong corporate earnings and a rise in banking stocks and Reliance Industries, while a surge in domestic coronavirus infections dampened the growth outlook for Asia’s third largest economy.
The NSE Nifty 50 index gained for the second straight day after suffering three sessions of losses due to disappointment over India’s economic package to support businesses hit by the Covid-19 pandemic.
Finance Minister Nirmala Sitharaman said the government would assess the need for further economic measures as the situation evolves, according to interviews to local financial dailies published on Wednesday.
The Nifty 50 ended 2.11% higher at 9,066.55, while the S&P BSE Sensex was up 2.06% at 30,818.61.
Foreign institutional investors were the main buyers on Wednesday, said V.K. Vijaykumar, chief investment strategist at Geojit Financial Services in Kochi.
“The world is awash with liquidity. They will buy more,” he said, adding the investors were deploying more cash thanks to monetary easing measures by central banks around the world.
Shares in financial services firm Bajaj Finance Ltd, drugmaker Dr. Reddy’s Labs and cement producer UltraTech Cement Ltd rose between 2.6% and 5.7% after their March-quarter financial results.
Shares in Reliance Industries Ltd rose 1.8% as the oil-to-telecoms conglomerate’s rights issue began on Wednesday.
HDFC Bank Ltd gained over 3%, while mortgage lender HDFC Ltd surged 5.66%.
Meanwhile, coronavirus infections in India reached 106,750 on Wednesday, a jump of more than 5,600 from the day before. A weeks-long nationwide lockdown to curb the virus from spreading has hurt business and caused job losses, leading economists to slash their growth forecasts for Asia’s third-largest economy.
Shares in cigarettes and consumer products giant ITC Ltd ended nearly 3% higher. Demand for consumer goods were “slowly getting back to normal,” ITC Chairman Sanjiv Puri told the ET Now TV channel, adding sales of discretionary items were still under pressure.