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Lenders boost Indian stocks after US election sparks volatility
Volatility in Indian stocks has increased for four straight days, the longest streak since June, and may surge further on the back of the US election and a Federal Reserve meeting on Thursday.
India stocks were lifted by better than expected quarterly results for the nation’s largest mortgage lender, after swinging between gains and losses as investors braced for the results of the upcoming US Presidential election.
The S&P BSE Sensex advanced 0.4% to 39,757.58 in Mumbai, after losing as much as 0.7% earlier, while the NSE Nifty 50 Index added 0.2%. Both gauges last week capped their worst weekly decline since the end of September. Banks were the top performers among nineteen sector sub-indexes compiled by BSE Ltd, rising 4.2%.
Volatility in Indian stocks has increased for four straight days, the longest streak since June, and may surge further on the back of the US election and a Federal Reserve meeting on Thursday. Fresh lockdowns in Europe are also clouding the outlook for a global economic recovery.
“Investors are anxious about the outcome of the US election, but India is likely to be a beneficiary regardless of the result,” said Deven Choksey, a managing director at KRChoksey Investment Managers Pvt. in Mumbai. “The volatility is real, and any correction should be bought into.”
As earnings season continues, 18 of the 32 companies on the Nifty 50 index that have reported earnings so far have beaten or matched estimates.
Meanwhile, a pickup in consumer spending during India’s festive season and a good monsoon point to a recovery in Asia’s third-largest economy, even as it continues to deal with the world’s second-highest number of coronavirus cases.
The yield on the benchmark 10-year government bond increased by one basis point to 5.89%, while the rupee weakened 0.4% to 74.43 per dollar.
