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Indian stocks up 6.4 pct on global recovery hopes

Indian stocks up 6.4 pct on global recovery hopes

India's benchmark Sensex index surged 6.4 percent Monday on hopes that a global recovery would drive more foreign capital back into Indian equities.
The Sensex gained 731.5 points in a broad rally to close at 12,143.75.
The market is up 48.8 percent since a March 9 low of 8,160.40.
Markets across Asia rose sharply Monday as investors took solace from positive manufacturing data out of China and the U.S., suggesting the U.S. economy _ a vital export market _ might be stabilizing.
Foreign institutional investors are regaining their appetite for risk and have started to put their cash back in emerging markets, said Amitabh Chakraborty, president of equities at Mumbai's Religare Securities.
He predicts India will account for 18 percent of global growth this year and China at 39 percent.
"It's very difficult for any investor to ignore China and India," he said.
Foreign institutional investors have invested a net of $126.1 million in Indian equities this year, after pulling out $12 billion last year, according to India's securities regulator.
Better-than-expected corporate earnings have also buoyed markets, Chakraborty said. Quarter on quarter profits for 52 companies he follows grew 4.8 percent for the January-March period, against an expected uptick of 0.8 percent, he said.
But many question whether the rally will be sustainable, given its speed as well as deep uncertainties about the outcome of national elections this month and growing instability in Pakistan.
Dhirendra Kumar, chief executive of Value Research in New Delhi, said the spike was unexpected and unwarranted.
"I don't see any fundamental variables powering this kind of rise," he said. He doubts such sharp, large foreign inflows are sustainable.
"It's not a healthy sign and it doesn't point to sustainability," he said. "The market has gone up at such a brisk pace at this stage, I don't think it's still at a bargain value."


Updated : 2021-04-20 07:15 GMT+08:00