India’s equities rose, with benchmarks heading toward new records, as optimism about vaccine approvals spurred buying.
The S&P BSE Sensex advanced 0.4% to 44,774.30 as of 10:04 a.m. in Mumbai, while the NSE Nifty 50 Index rose by the same magnitude. Both measures on Tuesday closed at new peaks.
Foreign net equity purchases of $16.6 billion this year through Dec. 1 are already the most since 2013 as funds have poured into emerging markets chasing returns. The relative strength index on both the Sensex and Nifty is around 70, a level that some traders read as a signal that they’re overbought.
“If the vaccine works to a decent level, more money will flow to emerging markets,” said Sameer Kalra, a strategist at Target Investing in Mumbai. “We are now seeing value stocks, like banks and industrials, starting to catch up after under performing the market.”
Measures of mid and small cap stocks climbed for a fifth consecutive session, headed for their first annual gains in three years.
India’s central bank will probably keep interest rates unchanged on Friday for a third straight meeting, based on estimates by economists in a Bloomberg survey. Inflation remains elevated in Asia’s third-largest economy due to supply constraints, while economic growth is showing signs of resuming.
The rupee weakened 0.1% to 73.85 per U.S. dollar, while the yield on the 10-year government bond was little changed at 5.92%.