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Pharma powers Indian shares to three-month closing high

Indian shares closed at a three-month high on Monday as domestic regulatory approvals to manufacture COVID-19 drugs lifted pharmaceutical stocks, outweighing the impact of a surge in domestic as well as global coronavirus cases over the weekend.

The NSE Nifty 50 index, which has recovered ground after taking a hit from worries about a violent border clash with China last week, ended up 0.65% at 10,311, its highest since March 11.

Indian and Chinese military commanders held a second round of talks to ease the tensions, with many Indians calling on the government to deliver a military and economic riposte to China following the worst clash in over five decades.

“The risk appetite has come back to the table along with foreign institutional buying … The cheer from pharma companies over drugs has also helped,” said Neeraj Dewan, director at Quantum Securities in New Delhi

“Whenever there is a gush of liquidity in global markets, emerging markets get their share. The major risk hanging over markets is once the pent-up demand from opening up of economies is exhausted, further pick up in demand is going to be challenging,” he added.

The Nifty Pharma index ended up 2.2%, while the bank index rose 1.74%.

Shares of Cipla Ltd ended up 3.2% after India’s drug regulator gave the green light for the manufacture and sale of their generic version of Gilead Sciences Inc’s experimental COVID-19 treatment remdesivir.

Shares of Glenmark Pharmaceuticals Ltd spiked 27% after the drugmaker received Indian regulatory approval on Friday to make and sell oral antiviral drug favipiravir for treating mild-to-moderate COVID-19 infections in the country.

India’s total COVID-19 cases stand at 425,282 with 13,699 deaths, the health ministry said.

Bajaj Auto Ltd ended up 7.1% and was the top gainer in Nifty 50 index.

The benchmark S&P BSE Sensex rose 0.52% to 34,911.32.

Meanwhile, the threat of rising coronavirus infections in parts of Europe and the United States kept global markets subdued. –Reuters

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