Markets score second weekly gain on easing lockdown; Sensex up nearly 1%

Equities rose, with the benchmark index scoring a second week of gains, as Asia’s third-biggest economy continued easing a nationwide lockdown.

The Sensex Index advanced 0.9 per cent while and NSE Nifty 50 Index rose 1.1 per cent at the close in Mumbai. Both gauges rose for a seventh day in eight to close at their highest levels in almost three months. For the week, both indexes advanced about 6 per cent each.

“There will be an increase in consumption because of the pent up demand during the lockdown,” said Deven Choksey, a strategist at KRChoksey Investment Managers in Mumbai. “We are likely to see a steady market.” India’s easing lockdown will see malls, restaurants, and places of worship reopening from June 8 as the country attempts to revive an economy that’s headed for its first full-year contraction in more than four decades. The economic effect from the shutdown has been so severe that economists are struggling to estimate how long it will take to recover.

Profits at Nifty50 companies fell about 15 per cent last quarter from the same period last year, the worst drop since at least 2014. Of the index members that have announced results so far this season, most have missed estimates, according to data compiled by Bloomberg.

Still, India’s services sector activity picked up in May, according to data published by IHS Markit, even as coronavirus infections continued to climb. Despite a rebound from a low in March, the Sensex remains down 17 per cent this year, more than double the slide in the regional MSCI Asia Pacific Index.

The rupee was little changed against the US dollar, giving up earlier gains and the yield on the most-traded 5.79 per cent 2030 bond rose 2 basis point to 5.82 per cent.