Sensex rallies 542 points to 38,686, Nifty jumps 171 points in opening session; Sun Pharma, Tata Steel, RIL among top gainers

Sensex was trading 533.37 points, or 1.40 percent, higher at 38,677.39, and the NSE Nifty jumped 179.75 points, or 1.61 percent, to 11,312.50

FP Staff March 03, 2020 10:31:49 IST
Sensex rallies 542 points to 38,686, Nifty jumps 171 points in opening session; Sun Pharma, Tata Steel, RIL among top gainers
  • Sensex was trading 533.37 points, or 1.40 percent, higher at 38,677.39, and the NSE Nifty jumped 179.75 points, or 1.61 percent, to 11,312.50

  • Global shares and oil prices extended their rebound on Tuesday on mounting speculation policymakers around the world would move to ease the economic fallout from the spreading coronavirus, ahead of a conference call by Group of Seven heads

  • The Indian rupee appreciated by 33 paise to 72.43 against the US dollar in early trade on Tuesday tracking positive opening in domestic equities.

The Sensex surged over 500 points in the opening session on Tuesday tracking firm gains in global stocks amid hopes that policymakers across the world would take measures to ease the economic fallout from the coronavirus outbreak.

Finance ministers and central bank chiefs from G7 countries will hold talks later in the day to discuss ways to coordinate their responses to cushion the epidemic's impact on the global economy, PTI said.

The 30-share index was trading 533.37 points, or 1.40 percent, higher at 38,677.39, and the NSE Nifty jumped 179.75 points, or 1.61 percent, to 11,312.50.

All Sensex components were trading on a positive note. Top gainers included Sun Pharma, Tata Steel, Reliance Industries, Hero MotoCorp, ICICI Bank and HCL Tech.

In the previous session, the 30-share BSE barometer closed 153.27 points or 0.40 percent lower at 38,144.02, and the broader Nifty closed lower by 69 points or 0.62 percent at 11,132.75.

Further, on a net basis, foreign institutional investors (FPIs) sold equities worth Rs 1,354.72 crore, while domestic institutional investors bought shares worth Rs 1,138.74 crore on Monday, data available with stock exchanges showed.

According to traders, domestic benchmarks followed global equities that rallied on hopes of stimulus from global policymakers to lessen the impact of coronavirus on their economies, ahead of the talks between G7 finance ministers and central bank heads.

Sensex rallies 542 points to 38686 Nifty jumps 171 points in opening session Sun Pharma Tata Steel RIL among top gainers

Persistent foreign fund outflow too weighed on domestic investor sentiment, they added.

Stock exchanges in Shanghai, Hong Kong, Seoul and Tokyo were trading with firm gains in their morning sessions.

Bourses in the US too ended on a strong note on Monday.

Global oil benchmark Brent crude futures rose 2.43 per cent to USD 53.16 per barrel.

Rupee up

The Indian rupee appreciated by 33 paise to 72.43 against the US dollar in early trade on Tuesday tracking positive opening in domestic equities.

At the interbank foreign exchange the rupee opened at 72.50, then gained further ground and touched a high of 72.43 against the US dollar, registering a rise of 33 paise over its previous close.

The domestic currency, however, could not hold on to the gains and was trading at 72.64 against the American unit at 1002 hrs, PTI said.

On Monday, the rupee had settled at 72.76 against the greenback.

Meanwhile, investor sentiment remained fragile amid concerns over the impact of coronavirus outbreak after two fresh cases of novel coronavirus were detected in India.

India on Monday reported two new cases of the novel coronavirus , including one from the national capital, the Union Health Ministry said as the government stepped up its efforts to detect and check the infection.

The coronavirus outbreak that started in China's Wuhan city in December has killed over 3,000 people in that country with total confirmed cases crossing 80,000 as it continues to spread to new countries around the world.

Meanwhile, domestic bourses opened on a positive note on Tuesday with benchmark indices Sensex trading 458.88 points higher at 38,602.90 and Nifty up by 158.90 points at 11,291.65.

Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold equity shares worth Rs 1,354.72 crore on Monday, according to provisional exchange data.

Global shares extend rebound on hopes of G7 support

Global shares and oil prices extended their rebound on Tuesday on mounting speculation policymakers around the world would move to ease the economic fallout from the spreading coronavirus , ahead of a conference call by Group of Seven heads, according to Reuters.

Finance ministers from the group are expected to hold a conference call on Tuesday (1200 GMT), sources said, to discuss measures to deal with the economic impact of the coronavirus outbreak.

“There are hopes that G7 countries will take some sort of coordinated actions to fight the virus, possibly including fiscal spending,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

The European Central Bank on Monday joined the chorus of central banks signalling a readiness to deal with the growing threats from the outbreak.

Earlier messages from the US Federal Reserve that it was prepared to act weighed on the greenback against many other major currencies.

The improved mood supported US S&P 500 futures, which rose 0.3 percent in early Asian trade on Tuesday, a day after the S&P 500 gained 4.60 percent, the biggest gain since December 2018.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.0 percent.

South Korea’s Kospi added 1.3 percent and Australian shares advanced 1.6 percent ahead of an expected rate cut by the Reserve Bank of Australia.

Japan’s Nikkei lost steam after short-covering ran its course, trading almost flat having given up earlier gains of 1.8 percent.

The rout in global stocks last week had already prompted Fed Chair Jerome Powell and Bank of Japan Governor Haruhiko Kuroda to flag a readiness to move.

Money markets are fully pricing in a cut of at least 0.25 percentage point to the current 1.50 percent-1.75 percent target rate at the Fed’s March 17-18 meeting as well as a 0.10 percentage point cut to the ECB’s key rate at March 12 meeting.

The frantic moves by policymakers reflected growing fears that the disruption to supply chains, factory output and global travel caused by the new epidemic could deal a serious blow to a world economy trying to recover from the US-China trade war.

The Organisation for Economic Cooperation and Development (OECD) on Monday cut its forecast of global economic growth this year to 2.4 percent, the lowest since 2009 and down from a forecast of 2.9 percent in November.

Coronavirus is now spreading much more rapidly outside China than within the country, leading the world into uncharted territory, although the World Health Organization (WHO) has so far stopped short of calling it a pandemic.

In the United States, six people in the Seattle area have died of the illness caused by the new coronavirus , as authorities across the country scrambled to prepare for more infections.

“It would be myopic to think that (economic) policy actions alone will bring back calmness to markets. The reality is, the coronavirus is still spreading,” said Takehiko Masuzawa, head of sales trading for Japanese clients at Macquarie in Tokyo.

Fed rate cuts

The rebound in global stock prices saw U.S. bond yields roll back some of their sharp falls.

The 10-year US Treasuries yield retreated to 1.135 percent from a record low of 1.030 percent marked on Monday. The rate-sensitive two-year notes yield jumped back to 0.859 percent from Monday’s 3 1/2-year low of 0.710 percent.

Still, the 10-year and two-year yields are down more than 40 and 50 basis points, respectively, from about two weeks ago.

April Fed funds rate futures still price in about 80 percent chance of a 0.50 percentage point cut this month and a total of almost 1 percentage point cuts by the end of year.

Expectations of Fed rate cuts prompted investors to cut their exposure to the dollar.

Against the yen, the dollar lost 0.3 percent to 107.97 yen, slipping towards a five-month low of 107 set on Monday.

The euro stood at $1.1139, having hit an eight-week peak of $1.1185.

The Australian dollar dropped 0.3 percent to $0.6517, less than a cent above an 11-year low of $0.64345 set on Friday.

Australia’s central bank is widely expected to cut the policy interest rate to 0.5 percent from 0.75 percent, already at a record low.

Oil prices bounced back further after a jump of more than 4 percent on Monday, reversing an early decline to multi-year lows.

Hopes of a deeper output cut by the Organization of the Petroleum Exporting Countries and central banks’ policy measures countered fears of slower growth.

US West Texas Intermediate (WTI) crude futures rose 2.6 percent to $47.96 a barrel, up sharply from Monday’s low of $43.32 a barrel, which was the lowest since December 2018.

While the coronavirus continues to dominate investor attention, focus has also swung to Super Tuesday in the United States, the biggest day in the Democratic primary elections to choose a challenger to President Donald Trump.

--With agency inputs

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