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Indian equities climbed, sending key gauges to their best weekly gains in more than two months, as Prime Minister Narendra Modi cruised to his second successive landslide victory.
The benchmark S&P BSE Sensex advanced 0.5 per cent to 38,995.45 as of 9:54 AM in Mumbai, set for its best week since March 17 with a 2.8 per cent gain. The NSE Nifty 50 Index also rose by 0.5 per cent today. A measure of price swings, the NSE Volatility Index, fell another 8.9 per cent after plunging 30 per cent on Thursday.
With the election outcome settled, investors will be looking to see how the government tackles slowing economic growth. A survey of economists predicts a report next week will show the slowest pace of growth since 2017 in the first three months of this year.
The equities benchmark closed at a record high on May 20 in anticipation of the poll outcome.
Strategist’s view
“A thumping victory for BJP surpassing its winning tally of 2014 has pleasantly surprised even the bulls, boosting the risk-on sentiment,” said Jagannadham Thunuguntla, senior vice president and head of research for wealth at Centrum Broking Pvt. in Mumbai.
“Post-political outcome, the narrative should come back to employment, economy and earnings. After the euphoria, the response of investors in Indian equity markets to Modis return to power has been measured,” analysts led by Somshankar Sinha at Jefferies India Pvt, wrote in an investor note on Thursday. “We still expect the near-term bias to be constructive before the sluggish macro environment returns to focus.”
The numbers
Eighteen of the 19 sector indexes compiled by BSE Ltd gained, led by a gauge of property stocks. Twenty-four of the 31 Sensex members and 33 of the 50 Nifty companies rose.
State-owned refiners Bharat Petroleum Corp and Indian Oil Corp rallied the most among Nifty members, gaining at least 2.8 per cent, after Brent crude futures slid 4.6 per cent to below $70 a barrel yesterday.
Net incomes at 25 of the 39 Nifty companies that have reported earnings so far have either topped or met analyst estimates, according to data compiled by Bloomberg . Grasim Industries Ltd and JSW Steel Ltd will report their January to March earnings later in the day.
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