Indian stocks pared gains yesterday driven by optimism around the country entering the first phase of opening up its economy, with hotels, restaurants and shopping malls permitted to function after more than two months of lockdown.
The S&P BSE Sensex rose 0.2% at the close in Mumbai, trimming an advance of as much as 1.9%. The NSE Nifty 50 Index gained 0.3%.
Indian equities capped a second week of gains on Friday as global funds stepped up purchases after the government began easing curbs to revive an economy that’s set for its first full-year contraction in more than four decades. The resumption of a global rally in risk assets has seen foreigners pour more than $4bn into local shares so far this quarter, the most in Asia.
“Optimism has built up over the opening up of the economy and forecast of a good monsoon,” said Sudip Bandyopadhyay, who oversees investments at Inditrade Capital Ltd in Mumbai. “The bigger reason has been the supportive global rally and foreigners buying heavily.”
The yield on the most-traded 6.45% 2029 bond was little changed at 6.02% yesterday, while the rupee strengthened marginally to 75.5437 per US dollar.
Twelve of 19 sector sub-indexes compiled by BSE Ltd gained, led by a gauge of oil and gas companies
Infosys Ltd contributed most to the Sensex advance, adding 2.4%; IndusInd Bank Ltd rose the most, gaining 6.9%; HDFC Bank Ltd lost 1.9% and was the biggest drag, while Mahindra & Mahindra Ltd’s 2.8% fall was the steepest.
Shares of State Bank of India (SBI) extended gains yesterday, rising 5.3%, as the lender reported a surge in its March quarter net profit to Rs3,580.81 from Rs838.4 in year-ago period.
Shares traded at Rs193.10, up 2.8% from its previous close, while the benchmark Sensex was up 1.3% at 34751.17. The stock had risen 8% on Friday.
Total income at the lender rose 0.4% to Rs76,027.51 crore in the quarter under review.
Analysts at Emkay Global Financial, in a note to clients, said, “Gross slippages were lower at Rs8,300 crore due to absence of lumpy corporate Non Performing Assets(NPA), but NPAs were far higher at Rs5,200 crore. The bank, among Public Sector Banks, has strong liability profile, higher retail orientation and reasonable capital position, while valuations 0.3 times FY2202E core absolute book value also look attractive”, they added. The brokerage has a buy rating on the stock.
HDFC Securities said, “Asset quality improved, even if one adjusts for the standstill classification impact, but this improvement was aided by higher with outstandings. The moratorium percentage is unusually low against peers and the related disclosures were ambiguous. With current valuations and a strong deposit it is trading at 0.75 times FY2022E of the absolute book value.” The brokerage has a buy rating on the stock.
Meanwhile the rupee settled on a muted note, up 3 paise, at 75.55 (provisional) against the US dollar yesterday as dollar-buying by banks as well as importers and rebounding crude prices restricted gains of the local unit. 
Forex traders said positive domestic equities, sustained foreign fund flows and the revival of business activity are supporting the rupee, but dollar demand and rising crude oil prices are weighing on the domestic unit. 
The rupee opened at 75.59 against the US dollar and finally settled at 75.55, registering a rise of 3 paise over its previous close. 
It had settled at 75.58 against the greenback on Friday. During the four-hour session, the rupee saw an intra-day high of 75.50 and a low of 75.64.