BENGALURU, Aug 24 (Reuters) - Indian shares closed just shy of their six-month highs on Monday, powered by a rally in private-sector banks as more businesses resumed operations after lockdowns and hopes of a treatment for COVID-19 brightened.
The NSE Nifty 50 index ended 0.83% higher at 11,466.45, while the benchmark S&P BSE Sensex was up 0.95% at 38,799.08. The rupee jumped 0.7% to 74.31 against the U.S. dollar, its best level since March 18.
India on Sunday issued guidelines for restarting its entertainment industry even as total infections crossed 3 million. Health ministry data released on Monday showed cases in the country climbed by 61,408 to 3.11 million.
“The reopening of industries is signalling that things are coming back to normal,” said KK Mittal, investment adviser at Venus India Asset Finance in New Delhi.
“Domestic markets are being driven by ample liquidity within the global system. Global cues are also supportive, with positive news coming from the COVID-19 treatment front.”
Global markets gained for a second straight session as risk appetite got a boost after the U.S. Food & Drug Administration authorised the use of blood plasma from recovered patients as a treatment option for COVID-19.
Indian equities have rebounded around 50% after plumbing multi-year lows in March, but experts say the liquidity-driven rally could lose steam as it does not reflect the real condition of the coronavirus-battered economy.
On Monday, top private-sector lender HDFC Bank Ltd was the biggest boost to the benchmark indexes, ending 2.9% higher at its best close in a month and pushing the Nifty Private Bank Index up 2.5%.
Smaller rivals ICICI Bank Ltd and Kotak Mahindra Bank Ltd climbed 2.5% and 3.6%, respectively, while India’s most valuable company Reliance Industries Ltd rose 0.7%. (Reporting by Chris Thomas in Bengaluru; Editing by Anil D’Silva and Uttaresh.V)
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