Sensex, Nifty surge as lockdowns ease; Reliance, automakers gain

BENGALURU (Reuters) – Indian shares bounced on Monday, tracking a surge in Asian peers, as phased easing of coronavirus lockdowns at home and elsewhere spurred hopes of an economic recovery.

A strict lockdown in Asia’s third-largest economy has caused a steep downturn in economic activity, putting thousands out of work and leaving many businesses without revenue.

To ease the pressure, the government will allow passenger trains to partially resume operations from Tuesday, and is also expected to unveil a second stimulus package.

India’s blue-chip NSE Nifty 50 rose 1.32% to 9,373.60 by 0500 GMT, while the benchmark S&P BSE Sensex was 1.29% higher at 32,050.76. The Nifty 50 rebounded from March’s sharp losses in April, but has lost 5% so far in May.

Gains on Monday were also supported by easing of coronavirus restrictions by some European countries. Although there was a fresh jump in cases in Germany and South Korea, and a steady rise in infections in India, where cases crossed 67,000.

“There are some instances of new COVID-19 cases emerging again. But markets are at this point ignoring them,” said Saurabh Jain, assistant vice president of research at SMC Global Securities in New Delhi.

“The gradual re-opening of the economy is providing momentum to sectors which were beaten down heavily.”

India’s benchmark 10-year bond yield also rose sharply on Monday following the government’s decision to increase market borrowing on the back of the coronavirus outbreak.

Automotive stocks were among the top performers in the blue-chip index and were set for their best one-day gain since late April.

The index has fallen 32% so far this year as the pandemic shut production and hit revenue – major automakers such as Maruti Suzuki reported zero monthly sales in April.

Shares in Maruti were up 4.2% on Monday, while Tata Motors Ltd gained the most in the Nifty 50, rising 5.9%.

Reliance Industries Ltd, India’s largest company by market value, was the biggest boost to the NSE Nifty 50 with a 2.4% jump.

The stock has gained 5.6% this year, as Reliance struck three deals in the past few weeks for some $8 billion in investments into its digital arm.

Shares in ICICI Bank Ltd, one of India’s largest private-sector lenders, fell nearly 2% even as it posted a higher March-quarter profit.