India’s stock index rose on Thursday following strong earnings from U.S. tech companies, but the energy crisis in Europe and China’s prolonged shutdown maintained a cautious mood pushing the dollar closer to a two-decade high as investors sought safety and yields.
The BSE Sensex 30-stock index rose more than 200 points to about 57,025, and the broader NSE Nifty rose more than 17,100. Both benchmarks declined nearly 1 percent in the previous session.
On Tuesday, the Sensex had jumped nearly 800 points to around 57,356, while the Nifty rose nearly 1.5 percent to about 17,200, after both indices slipped more than 1 percent on Monday.
The uncertainty is expected to continue as concerns over global economic growth, the Russia-Ukraine conflict and a slowdown in demand in China due to an increase in cases, continue.
Asian stocks rose, with MSCI’s broad index of Asia-Pacific stocks outside Japan up 0.5 percent, led by a 1 percent bounce in Australian stocks from a one-month trough Wednesday.
“The real question is, whether this is really important for a lasting recovery in a global environment fraught with other conditions,” Vishnu Varathan, chief economist at Mizuho Bank in Singapore, told Reuters
“Volatility is still high … although not directly fearful, the fear is hard to let go of the continuing uncertainty from the war in Ukraine, which continues to threaten with wider economic pain,” he added.
Russia’s decision to cut off gas supplies to Bulgaria and Poland on Wednesday caused tremors in European energy markets and hurt global financial markets.
That has added to the sour mood among investors already shaken by China’s COVID surge and renewed tight sanctions.
Flight-to-safety trading helped the dollar index to a five-year high of 103.28 and a further push above 103.82 will see it to a level not visited since late 2002.
“With COVID lockout concerns in China exaggerating the risk of a dollar rise, we are aware of the possibility of a stronger dollar for the long term,” Jane Foley, Head of FX Strategy at Rabobank, told Reuters.