Singapore: India equities advanced, as investors shifted focus from escalating tension with Pakistan to Prime Minister Narendra Modi’s improving prospects of reelection.
The S&P BSE Sensex gained 0.2 percent to 35,968.20 as of 9:45 a.m. in Mumbai, while the NSE Nifty 50 Index rose 0.1 percent to 10,815.35. Gauges of mid- to small-cap stocks also advanced. Volatility might increase amid the expiry of monthly derivative contracts later Thursday, and ahead of reports on economic growth after market hours.
Rising tensions with Pakistan so far haven’t reversed foreign investors’ optimism toward Indian equities. Global funds bought net $487.5 million of shares so far this week, taking the month’s purchases to $2.3 billion, the biggest inflow since November 2017, data compiled by Bloomberg show.
Strategist Views
“Volatility might persist until derivatives expiry but the focus would soon shift to a pre-election rally as this war-like situation won’t continue for long,” said Deven Choksey, managing director of K.R. Choksey Shares & Securities Pvt. in Mumbai.”Pakistan would have to take action against terrorists amid rising international pressure,” he said. “The escalation of border tensions with Pakistan overshadows the economy and markets,” said Prakash Sakpal, an economist at ING Groep NV in Singapore. “There’s no reasons for pressure to ease on stocks and the rupee as the tensions will likely remain a burning issue going into elections in May,” he said. Tension between India and Pakistan “has stunted the rally for now,” Vaishali Parekh, technical analyst at Prabhudas Lilladher Pvt. wrote in a note on Wednesday. “A break of 10,720-10,700 would bring in more correction.”
The Numbers
Thirty-seven of the 50 Nifty shares and 23 of the 31 Sensex stocks gained. 17 of the 19 sector indexes compiled by BSE Ltd. rose, with a gauges of consumer goods and auto stocks leading the gains. Bharti Airtel Ltd. was among biggest gainers on the Sensex, while Oil and Natural Gas Corp. fell the most. Jet Airways Ltd. slid as much as 6.3 percent after grounding seven more of its aircraft following non-payment of dues.
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