The country is expected to get a normal monsoon this year, which is expected to boost income in rural India that contributes 53 percent to the GDP. The forecast of a normal monsoon, the lifeblood of Indian agriculture, has been supporting the market. The Nifty50 has gained 5 percent from recent lows, though it is still some distance from the record highs seen in February.
A good harvest would go a long way in taming inflation, which has been a growing concern as the second coronavirus wave rips through the country threatening the nascent economic recovery, say experts.
"It should be good for crops and thus the economy as a whole, especially given the current backdrop of the second wave of COVID-19 cases," brokerage Motilal Oswal said.
Tractors, two-wheelers, auto, rural financing, agrochemical and select FMCG companies are likely to benefit from a good monsoon, the brokerage said.