Reopening the economy is like a ray of hope for the companies. This might very well turn the tables around soon. For example, another less than 2% rallying up in the S&P BSE Sensex and it will be able to wipe out all the losses for the year.
Despite India racing to top the list of countries with most coronavirus cases, Stock investors are taking heart from India’s efforts to open its economy.
The S&P BSE Sensex had hit a more than two-month low but it rallied up approximately 11% on 24th September. According to the data from Bloomberg, this was the best performance among the world’s national equity benchmark. Another less than 2% rallying up and it will be able to wipe out all the losses for the year.
Activities in India have already reached 93% of the pre-COVID levels according to the Jefferies Financial Group Inc. Model that tracks economic recovery. Also, India is going to further tone down the restrictions with schools and multiplexes opening from 15th October.
With the central bank showing signs of more policy easing and announcing a slew of liquidity steps to support the economy, the Sensex capped its best week on Friday since early June. The investor sentiment was boosted by the mild improvements in some economic indicators, as shown by the data, and also by the optimism over earnings.
Maruti Suzuki Ltd., India’s biggest carmaker, posted its highest monthly sales in two years. This happened because the lockdown restrictions were toned down and the dealerships wanted to stock up before the festive season crowd started flowing in. End of November will see the third-quarter growth being announced by Asia’s third-largest economy. People and economists are looking forward to that after the record contraction of the economy in the second quarter.
Mahesh Nandurkar and Abhinav Sinha, Jefferies strategists, wrote last week, “The Indian government has pursued a gradual re-opening and the COVID peak seems to be behind now.”