Indian shares scale new high as financials, Reliance gain

BENGALURU: Indian shares hit an all-time high on Tuesday, powered by gains in banks and Reliance Industries, as optimism about a swift global economic recovery boosted investor sentiment globally.

Domestic benchmark indexes have climbed 13% this month after a high-spending federal budget and strong corporate earnings, which have signalled that Asia's third largest economy could bounce back quickly from a pandemic-induced slowdown.

The NSE Nifty 50 index was up 0.52% at 15,394.05 by 0500 GMT, while the S&P BSE Sensex was 0.39% higher at 52,358.10. Earlier in the day, both indexes hit record highs for the second consecutive session.

"The mood has been surprisingly, incredibly positive," said V.K. Vijaykumar, chief investment strategist at Geojit Financial Services.

"We were a little bit sceptical initially, because of the economy-markets disconnect. We had other worries also: new (COVID-19) strains, inflation, tensions on the border. Now, all these have become non-issues."

Adding to the upbeat mood was a report from S&P that said India was on track for an economic recovery in 2021/22, supported by falling COVID-19 cases, a pickup in government spending and strong agriculture sector performance.

Among individual stocks, Kotak Mahindra Bank and conglomerate Reliance Industries were the top two boosts to the Nifty 50.

The Nifty PSU bank index that tracks state-run lenders jumped 2.82% after Reuters reported that the government had shortlisted four banks for potential privatisation.

Metal stocks rose 4.1%. Tata Steel jumped 4.9%, while Jindal Steel climbed 7.2%.

Other Asian stock markets were also trading higher, putting world equities on course to extend their bull run for a 12th consecutive session.