Indian markets among biggest gainers since their March lows
Indian stocks surged 76% from the lows of March—the second-highest gainer among the world’s 10 largest stock markets—propelled by hopes of an early vaccine against covid and greater weightage in MSCI indices.
Only Canadian stocks gained more—79%—while the US market, with gains of 73%, came in third. The Indian stock market now has a record market capitalization of $2.31 trillion.
Strong foreign capital inflows, thanks to loose monetary policies and the lifting of uncertainty following the US Presidential election, improved sentiments.
“We have seen good traction in all segments as it continued the bullish momentum with strong buying from FIIs, along with MSCI weight increase flows of $5 billion into India, a positive global set-up, a decline in volatility, short-covering, with momentum in many heavyweights as well as mid-cap counters,” said Chandan Taparia, vice-president, derivatives and technical equity research, Motilal Oswal Financial Services Ltd.
Retail investors also joined the rally; NSE’s daily cash market turnover on Friday touched a record ₹1.47 lakh crore.
MSCI on November 11 added a dozen Indian stocks to its indices, including Kotak Mahindra Bank, attracting more investors.
Foreign investor inflows in November were a record $8.32 billion, totalling $14.87 billion so far in 2020.
Among sectoral indices, IT and banking indices were among the biggest gainers since April, while telecom and FMCG firms were laggards.
Market experts say enthusiasm for Indian stocks may last for some time as earnings are also seen as favourable.
September quarter earnings showed a sharp improvement in operating profits, despite expectations to the contrary.