India’s sensex extends gains as fund inflows to stocks continue

Bloomberg

India’s benchmark equity index rose, in line with peers in Asia, as investors weighed the prospect of business recovery against the pace of new coronavirus infections.
The S&P BSE Sensex gained 0.7% to 38,434.13 as of 10:06 am in Mumbai, set for its longest stretch of gains in three weeks. The NSE Nifty 50 Index also advanced 0.6%.
India’s stimulus measures aimed at cushioning the effect of lockdown measures on the economy has helped slow a slide in corporate credit quality, according to a review of downgrades by India’s four main credit assessors.
“The positive momentum may continue until some negative event or news emerges,” said Umesh Mehta, head of research at Mumbai-based Samco Securities Ltd.
Foreign investors have bought net $1.3 billion of local shares this month through August 7 as inflows continue into a fourth month. Still, a steady increase in new coronavirus infections continues to curb business activity, with the economy on course for its first contraction in 40 years.
As earnings continue, 24 of the 37 Nifty 50-member companies that have announced results so far have beaten or matched estimates. Adani Ports & Special Economic Zone Ltd. and Motherson Sumi Systems Ltd. are among companies that announced results on Tuesday.
The rupee strengthened 0.1% to 74.8325 per US dollar, while the yield on 10-year government bonds was little changed at 5.90%.
All but one of the 19 sector sub-indexes compiled by BSE Ltd. advanced, led by a gauge of metal companies.
ICICI Bank Ltd. contributed the most to the Sensex gain and had the largest move, increasing 2.5%; the bank plans to raise $2 billion from a share sale to strengthen its capital base.
Titan Co Ltd. dropped 3% and was the biggest drag on the index after the company reported a quarterly net loss that was wider than analysts’ consensus estimate.