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India: benchmarks hit record highs second straight day

Indian stock indices turned in positive performance on Thursday, October 26, hitting new all-time highs for the second straight session. Market participants were upbeat about the Finance Ministry’s statement that state-run lenders will manage the USD 32 bn to be injected into the banking sector, so this plan will not likely be included in the budget deficit.

In addition, investors remained focused in quarterly earnings, while awaiting the outcome of the ECB policy meeting. Notably, Indian players Yes Bank, Mangalore Chemicals and Fertilisers are due to release their earnings by the end of the day.

In sectoral terms, metals, financial, industrial, commodity names as well as FMCG suppliers logged gains, while telecom and technology stocks as well as durable goods suppliers underperformed the broader market.

Recapping the benchmarks, the Nifty 50 rose 0.47% to 10,343.80, and the BSE Sensex firmed 0.32% to 33,147.13.

By 10:54 GMT, the USD/INR currency pair advanced 0.09% to 64,805, while EUR/INR traded down 0.17% to 76.5680. The 10-year Indian government bond yield narrowed to 6.804%.

State Bank of India corrected down 1.4% after spiking 28% in the previous session on news that the bank recapitalization plan was approved.

Larsen & Toubro, Asia’s leading engineering company in terms of market capitalization, picked up 1.6%, extending yesterday’s uptrend as the government announced a plan to invest INR 6.92 tn (USD 106.82 bn) in road construction over the next five years.

The daily chart shows that the BSE Sensex has approached the upper line of Bollinger bands, while the Slow Stochastic Oscillator is in overbought territory. As a result, the benchmark can be expected to trend lower in the short term.