India investors bank on economic recovery
INDIAN stocks rose on the expectation that a slowdown in economic expansion has bottomed out and growth will recover in 2020 on the back of Finance Minister, Nirmala Sitharaman’s planned $1.5tn infrastructure push.
The S&P BSE Sensex climbed 0.1 per cent to 41,306.6 at the 3.30 pm close in Mumbai. The NSE Nifty 50 Index also advanced by 0.1 per cent, Bloomberg reported on Wednesday.
Stocks had largely priced in a slowdown that had seen the country’s economy growing at the slowest pace since 2013. Focus was shifting to whether a rally in the benchmark indexes would broaden out to the wider market, and which industries were most likely to benefit from a potential revival in Gross Domestic Product growth in India as well as globally.
“Information technology and bank stocks were some of the best ways to play the economic recovery,” said Prakash Pandey, who oversees investments and research at Plutus Advisors & consulting Ltd in New Delhi.
“In IT, there is not much of a debt problem, compared to other sectors. Growth in business will go straight to the bottom line. Midcap banks also have a lot of potential to gain this year, partly by capitalising on non-bank lenders’ struggles.”
Ten of 19 sector sub-indexes compiled by BSE Ltd gained, led by a gauge of power companies
Half of the Sensex’s 30 shares rose.
HDFC contributed the most to the index advance, increasing 0.8 per cent, while Power Grid had the largest gain, climbing 2.8 per cent.
Indusind Bank was the biggest drag on the index, declining 1.7 per cent, Titan co. had the biggest drop, falling 2.8 per cent.