(Bloomberg) -- Indian equities extended their rally for a fourth day on optimism the new central bank governor will ally with the government to ease lending controls to spur economic growth. Key indexes reversed earlier declines and headed for a weekly gain.
The benchmark S&P BSE Sensex gained 0.1 percent to 35,980.91 as of 10:21 a.m. in Mumbai. The NSE Nifty 50 Index rose 0.2 percent to 10,807.85. Both are headed for their second weekly advance in the past three weeks, rising at least 0.9 percent in the five-day period.
The Reserve India board is scheduled to meet Friday and the new Governor Shaktikanta Das may be more amenable to the government’s requests to ease lending restrictions on state-run banks and hand over more of its capital to the state.
Read here for details on the RBI board meeting
Strategist Views
- “Markets will be watching the plan of action to be adopted by the new governor in terms of handling the resolution of the IL&FS default, related liquidity conditions and the sensitive topic of the RBI reserves,” said Jagannadham Thunuguntla, senior vice president and head of research for wealth at Centrum Broking Pvt. in Mumbai.
- Investors can remain with quality stocks backed by strong fundamentals and low debt, he said.
- “Given the ongoing political dynamics and possibility of a change in government at the center, investors would likely settle for safety and quality until May 2019,” Kim Eng Securities India Pvt. said in an investor note on Dec. 12.
- Any positive returns in 2019 could only be back ended as uncertainty would seemingly preclude a major rally in the first half, analysts Jigar Shah, Neerav Dalal and Vishal Periwal wrote.
The Numbers
- Eighteen of the 19 sector indexes rose, paced by a gauge of telecom shares. An India tribunal accepted the wireless carriers’ requests against the telecom regulator and directed it to reconsider definition of significant market player and predatory pricing.
- Telecom firm Bharti Airtel Ltd. rose the most among Sensex members, climbing 3.5 percent.
Analyst Notes
- Bandhan Bank Rated New Sell at Ambit; PT 280 Rupees
- United Breweries Rated New Buy at Citi; PT 1,550 Rupees
