Sensex, Nifty rebound; govt measures to aid coronavirus-hit economy, lend much-needed boost to markets
Infosys, Adani Ports, Britannia Industries, Bajaj Finance and HUL were among major gainers on the Nifty.
Equity benchmark indices failed to retain the sharp recovery in the afternoon trade on Tuesday despite Finance Minister Nirmala Sitharaman announced several relief measures for the industry. But the market recovered from the previous session's historic losses and ended in the green.
MarketAtClose | Frontline indices end with gains of 1-3% after a volatile trading session; Nifty gains 191 points to 7,801 & Sensex 693 points to 26,674 pic.twitter.com/6vsLd0aqOm
— CNBC-TV18 (@CNBCTV18Live) March 24, 2020
The Sensex closed 692.79 points or 2.67 percent higher at 26674.03, while Nifty was up 190.80 points or 2.51 percent at 7801.05.
After gyrating 1,823.97 points, the BSE barometer gave up some gains to end 692.79 points or 2.67 percent higher at 26,674.03. It hit an intra-day high of 27,462.87 and a low of 25,638.90.
Similarly, the NSE Nifty settled 190.80 points, or 2.51 percent, down at 7,801.05.
In the Sensex pack, Infosys was the top gainer which rallied 12.69 percent. Other major gainers included Bajaj Finance, Hindustan Unilever, Maruti, HCL Tech, Reliance Industries, Nestle India, ICICI Bank, Kotak Bank, Titan, Asian Paints and Sun Pharma.
Mahindra and Mahindra, IndusInd Bank, ITC and PowerGrid were the losers.
On Monday, the Sensex crashed 3,935 points or 13.15 percent to 25,981 while the Nifty 50 tumbled by 1,135 points or 12.88 percent to 7,610. Both Nifty 50 and Nifty bank witnessed their biggest fall in absolute terms in the previous session.
On Tuesday, the market recovered sharply though it started in the red. Both Sensex and Nifty staged a sharp recovery after reports of possible announcement of an economic stimulus package by Sitharaman in the afternoon.
Infosys, Adani Ports, Britannia Industries, Bajaj Finance and HUL were among major gainers on the Nifty, while losers included Yes Bank, M&M, Grasim, IndusInd Bank and Power Grid Corp.
As many as 927 shares advanced, 1,310 shares declined, and 145 shares are unchanged on Tuesday.
Except realty all other sectoral indices ended in the green. BSE Midcap up 1.5 percent, while Smallcap index ended flat.
According to experts, a major package from the government of India and the Reserve Bank is expected shortly, and the market is likely to remain hugely volatile with rising possibility of V shaped recovery occasionally.
Global equities rebounded almost 2%
Global equities rebounded almost 2 percent on Tuesday, off near four-year lows, and the dollar slipped as investors pinned hopes on unprecedented stimulus steps by the US Federal Reserve and other policymakers to ease strains in financial markets.
While the measures such as the Fed’s offer of unlimited bond-buying won’t immediately mitigate the economic devastation inflicted by the coronavirus outbreak, they will launch more dollars into world markets, allowing companies, funds and banks to access cash to pay creditors, supplier and end-investors.
The prospect had not cheered Wall Street for very long on Monday, with losses of 2-3 percent on major indexes, but the mood improved on Tuesday, possibly as many other central banks and governments looked set to join the fray. Wall Street futures pointed to stocks opening 4% higher, while a pan-European equity index also rallied a similar amount.
“Today there is a strong recovery connected to the move that the Fed has introduced this massive weapon,” said Francois Savary, CIO of wealth manager Prime Partners, noting the Fed had needed to resolve funding markets seize-ups as a priority.
The Fed will not only buy unlimited amounts of assets but also expand its mandate to corporate and municipal bonds and backstop a series of other measures that analysts estimate will deliver $4 trillion-plus in loans to non-financial firms.
There were also signs of progress in Congress on a $2 trillion U.S. stimulus deal, which Treasury Secretary Steven Mnuchin hoped was “very close”.
Other countries are unveiling their own measures - South Korea's ravaged market climbed 8.6 percent after the government doubled a planned economic rescue package to 100 trillion won ($80 billion).
In China, mainland stocks posted their biggest gain in three weeks with a rise of almost 3 percent while Japan's Nikkei soared 7 percent, its biggest daily rise since February 2016.
Not everyone was optimistic the buoyant mood would last noting, for instance, that global coronavirus infections now top 350,000 with scores of countries in lockdown. China too posted a rise in new infections brought in from abroad.
“Markets are continuing to bounce up on the latest policy announcements and then sliding back down as the economic reality of the situation re-emerges,” Deutsche Bank strategist Jim Reid said.
Still, the plan calmed nerves in bond markets, where yields on two-year Treasuries hit their lowest since 2013. Ten-year yields were at 0.8339 percent, from last week’s peak of 1.28 percent. Yields inched higher on Tuesday as equities rallied.
Oil jumps 5% to over $28
Oil jumped 5 percent on Tuesday to above $28 a barrel, supported by steps by the US Federal Reserve to bolster the economy and hopes the United States will soon reach a deal on a $2 trillion coronavirus aid package.
The Fed on Monday rolled out an array of programmes including backing for the first time corporate bond purchases. US Treasury Secretary Steven Mnuchin voiced confidence that a deal on the aid package would be reached soon.
Brent crude was up by $1.44 a barrel, or 5.3 percent, to $28.47. The global benchmark fell to $24.52 on Wednesday, its lowest level since 2003.
US West Texas Intermediate gained $1.26, or 5.4 percent, to $24.62.
“Oil is clawing its way higher, mainly on the back of the weaker dollar that stemmed from the Fed’s unprecedented measures,” said Edward Moya, senior market analyst at broker OANDA.
The expected stimulus pushed the U.S. dollar lower against other currencies .DXY. A weaker dollar tends to support the price of oil and other dollar-denominated commodities.
-- With inputs from agencies
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