Indices rise for a third day on robust US, China data

Shares traded near four-month highs on Friday, tracking gains in broader Asian markets after robust data from the US and China bolstered hopes of a global economic rebound, but a record spike in domestic coronavirus cases capped gains.

The benchmark indices rose for a third day, the Nifty50 index surged 0.53 per cent to 10,607.35 and the Sensex settled at 177.72 points, 0.50 per cent, higher at 36,021.42.

“People on the ground have started realising that many people in their first degree of connection are now coming down with Covid19, and the fear of what another lockdown will do to industries is the biggest overhanging worry for investors,” said Nikhil Kamath, cofounder and chief investment officer, Zerodha.

The Nifty and Sensex have rebounded sharply from a virusled crash in March, but remain around 13 per cent lower for the year. “There is clearly a disconnect between India’s economic fundamentals and markets,” said V K

Vijayakumar, chief investment strategist at Geojit Financial Services. “Markets are being driven by liquidity.”

Broader Asian markets rose after data showed China’s services sector in June expanded at the fastest pace in over a decade, and US non-farm payrolls saw a betterthan-expected jump. But higher infections in the US capped gains.

Among individual shares, Reliance Industries rose as much as 1.4 per cent to its highest since June 22 after saying Intel would buy a 0.39 per cent stake in its digital unit, Jio Platforms, for ~18.95 billion. Cadila Healthcare gained as much as 4.6 per cent after getting an approval from Indian regulators to begin human studies for its Covid-19 vaccine contender.

HDFC Life Insurance Company jumped 5.1 per cent to its highest since February 25 after the NSE said the firm would replace Vedanta in the Nifty50 index from July 31. Vedanta was the biggest loser on the Nifty50, falling as much as 1.7 per cent.