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Indian shares rise on downward trend in COVID-19 cases

BENGALURU, June 1 (Reuters) - Indian shares extended gains on Tuesday, as investors took hope from a downward trend in daily COVID-19 cases while taking cues from a global rally in equities.

The blue-chip NSE Nifty 50 index rose 0.18% to 15,611.30 by 0345 GMT, while the benchmark S&P BSE Sensex climbed 0.19% to 52,026.39. Both the indexes closed 1% higher on Monday, building up on gains posted last week.

“The ongoing bull run in the market has taken even the incorrigible optimists by surprise,” said V K Vijayakumar, chief investment strategist at Geojit Financial Services.

India on Tuesday reported its lowest daily increase in new infections since April 8 at 127,510, and staying below the 200,000-mark for the fifth day.

Meanwhile, the country’s economic growth picked up to 1.6% year-on-year in the January-March quarter, better than the 1.0% growth forecast of analysts in a Reuters poll.

However, economists are increasingly pessimistic about the current quarter after a huge second wave of COVID-19 infections hit the country last month.

Goldman Sachs on Tuesday cut its second-quarter GDP forecast for India, and said it now expects a 27.6% annual contraction in the quarter from 20.5% in the earlier forecast.

Financials stocks provided support, with mortgage lender HDFC Ltd and Kotak Mahindra Bank Ltd being among the top boosts to the Nifty 50, rising 1.6% and 0.6%, respectively.

Globally, equities have risen in the past week on improved investor sentiment after U.S. inflation outlook. In Asia, markets rose on Tuesday ahead of European and U.S. data this week that may offer cues on global economic health. (Reporting by Rama Venkat in Bengaluru; editing by Uttaresh.V)

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