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.