Indian shares followed world markets higher on Tuesday, after three straight sessions of declines, spurred by gains in Bharti Airtel and positive data from an early trial of a potential COVID-19 vaccine.
The NSE Nifty 50 index has slid 9% in May so far, with sharp falls in the last three sessions, as India's economic relief measures disappointed markets and domestic COVID-19 infections rose steadily.
On Tuesday, the blue-chip Nifty 50 was up 2.09% at 9,007.20 by 0500 GMT, while the S&P BSE Sensex was 2.12% higher at 30,665.07.
Other Asian shares also climbed and oil extended gains after very early data showed U.S.-based Moderna Inc’s experimental COVID-19 vaccine produced protective antibodies in a small group of healthy volunteers.
Shares in Bharti Airtel Ltd jumped 9% and hit a record high as the telecoms firm reported a 15% rise in revenue. The stock was the biggest boost to the Nifty 50.
Banking stocks were the next biggest boost to the Nifty 50, following a bruising Monday that saw the sector record its worst day in two weeks. HDFC Bank and mortgage lender HDFC gained over 2% each.
“There are apprehensions in terms of asset quality in the banking sector. These are medium- to long-term concerns,” said Mayuresh Joshi, head of equity research at William O’Neil India in Mumbai.
“If such short-term moves happen, there is a high probability that shorts are getting covered,” he said, of the banking stocks’ rise on Tuesday.
Betting on a security’s price to fall, short sellers borrow a stock with a view to buy it back later at a lower price to cover the bet and make a profit.
The banking index is down 44% this year and is among the worst performers in 2020, with the industry staring at more defaults by businesses hit by the COVID-19 pandemic, raising concerns of a fresh bout of bad loans.
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