India’s key stock gauge climbed for a fourth day to shut near a record high as investors remained optimistic the economy will rebound strongly from the world’s worst coronavirus outbreak.
The NSE Nifty 50 Index rose 0.6% to 15,301.45 on Wednesday amid gains in Asian equities. The gauge had closed at an all-time high of 15,314.70 on Feb. 15. It is up 9.4% to date in 2021, outperforming the MSCI Asia Pacific Index by about six percentage points. The S&P BSE Sensex rose 0.8%.
The milestone comes as India is attracting all the world attention for the virus disaster. Money managers are relying on a consumption-led economic rebound and also the nation’s long-term growth prospects to support corporate earnings and equity valuations.
We are within the middle of an equities cycle that's fueled by liquidity the worldwide central banks are infusing,” said Amit Jain, chief strategist at Ashika Group in Kolkata. “There continues to be room for this rally,” he said, adding that the Nifty index could touch 17,000 this year.
In recent days, the slowing pace of latest infections in India has boosted hopes of a gradual resumption of business activities curtailed by localized lockdowns. Daily cases have halved from a peak of quite400,000 earlier this month.
Several states are setting out to announce a slow rollback of restrictions as caseloads fall, suggesting the height hit to economic activity are going to be seen in May, with conditions improving in June, Nomura Holdings Inc. analysts Sonal Varma and Aurodeep Nandi wrote in a very note on.
“We remain positive on India’s trade cycle and expect GDP growth of 9.8% in 2021,” they wrote. “Our analysis of international evidence suggests that the hit to economic activity are significantly but what the call in mobility suggests.”