(March 24): India’s benchmark stock index erased this year’s losses as early signs of a pickup in government spending and monetary easing buoy sentiment.

The NSE Nifty 50 Index climbed as much as 1.3% on Monday and is set for a six-day winning streak, the longest since September last year.

Signs of a turnaround in sentiment are visible with global banks, including Citigroup Inc, signalling in recent days that the market’s selloff since September has eased concern around its expensive valuation. The central bank’s liquidity infusion and rate cut at the last meeting also drove optimism.

“Confidence is coming back. We are seeing a convincing recovery in various stocks and this rally definitely seems to have legs,” said Sonam Srivastava, founder of Wright Research in Mumbai. “There is an expectation of earnings bottoming out,” she added.

The Nifty is up about 7% from its lows made in the first week of March, after declining as much as 16% from its September high. An economic downturn and persistent foreign selling led to the downturn.

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