Indian shares jumped more than 3% on Thursday and were set for their best month in nearly 11 years, as sentiment improved on promising early results from a COVID-19 drug trial, while heavyweight Reliance Industries gained ahead of its results.
The NSE Nifty 50 index advanced 3.11% to 9,850.3 by 0455 GMT, while the benchmark S&P BSE Sensex was up 3.1% at 33,734.26. Both indexes were on course for their fourth straight session of gains in a holiday shortened week.
The indexes are also set to close the month about 14% higher, gains last seen in May 2009, rebounding from a near 23% slump in March as the coronavirus hammered markets.
Wall Street and Asian stock markets rallied after early results from U.S.-listed Gilead’s trial of its drug remdesivir showed on Wednesday it helped speed recovery from the illness caused by the coronavirus.
“We are seeing hope trading on the positive news about Gilead’s drug and expectations that the lockdown will ease soon. It will be difficult to sustain the rally unless the economy actually opens up,” said Samrat Dasgupta, CEO at Esquire Capital Investment Advisors.
“This may also be an expiry trade, because there were a lot of shorts in this expiry, and they are getting covered in the last couple of days.”
India is due to end its strict coronavirus lockdown this weekend, but a rising number of cases and deaths have presented the government with a difficult decision on how to exit the lockdown. Some countries around the world have eased the restrictions.
Asia’s third biggest economy is also yet to roll out a long-awaited stimulus package to help mitigate the damage from the health crisis.
Oil-to-retail conglomerate Reliance Industries Ltd rose 3.3% ahead of its quarterly results due after the bell, also supported by an over 10% surge in oil prices on signs of a recovery in U.S. fuel demand.
Top private-sector lender HDFC Bank Ltd provided the biggest boost to the indexes, rising as much as 3.9%. The Nifty Private Bank index climbed 4.2% to a six-week high.
IT shares also moved higher, with Infosys Ltd rising as much as 6.2% and the Nifty IT Index up 4.6%.
Shares of Glenmark Pharmaceuticals Ltd rose nearly 9% after the drugmaker said it got the Indian drug regulator’s approval to conduct clinical trials of antiviral drug favipiravir, seen as a potential treatment for COVID-19.
Automaker Tata Motors Ltd was the biggest percentage gainer on the Nifty 50, rising nearly 15% in its sharpest intraday gain since October 2019.
Consumer goods giant Hindustan Unilever Ltd slipped 1% ahead of its quarterly results.