Sensex soars to record high after concerns on growth abate

The RBI is expected to cut interest rates for a second time this year in a policy meeting scheduled for later this week.

A man checks out the live index outside the Bombay Stock Exchange | Getty Images

Singapore: Indian equities benchmark was set to close at a record high as global growth concerns abated. Expectations that the central bank will announce its second interest-rate cut this year and a national election that will see Prime Minister Narendra Modi reelected has helped lift investor sentiment.

The benchmark S&P BSE Sensex Index advanced 0.7 percent as of 10 a.m. in Mumbai, inching above its August 28 record closing level, after capping its best quarter since June 2018. The NSE Nifty 50 Index added 0.6 percent. The central bank will lower its key rate at an April 4 policy meeting, according to most economists in a Bloomberg survey. Evidence of a pick-up in China’s manufacturing also eased concerns about a global economic slowdown.

Foreign investors have pumped more than $7 billion into India stocks so far this year — among the highest in Asia — on bets that rate cuts and the prospective reelection of Modi’s government in a poll through May will support earnings growth in Asia’s third-biggest economy. India stocks were upgraded to overweight on the outlook for earnings, BNP Paribas SA analysts wrote in a note dated March 30.

Strategist view

Stocks have largely been driven by foreign flows betting on political stability and a revival in economic growth, said Jagannadham Thunuguntla, senior vice president and head of research for wealth at Centrum Broking Pvt. in Mumbai.

The numbers

Seventeen of the 19 sector indexes compiled by BSE Ltd. advanced, led by gains of more than 2 percent in gauges of metals and materials stocks. Twenty Six of the 31 Sensex members and 33 of the 50 Nifty stocks advanced. Vedanta Ltd. was among the top gainers on the index, surging to its highest level since January. Crompton Greaves Consumer Electricals Ltd. jumped as much as 11 percent, the most since Nov. 2017, after Goldman Sachs upgraded the stock to to buy from neutral.