Indian stocks gained yesterday, trimming their worst weekly performance in five, as investors weighed the prospect of government stimulus to counter the economic damage from the coronavirus pandemic.
After touching an intraday high of 32,088.51 points, the benchmark Sensex settled 199 points or 0.6% higher at 31,642.70 yesterday. The Nifty advanced 52 points or 0.57% to close at 9,251.50. For the week, the benchmark index dropped 6.2%, marking its worst fall since April 3, as the extended nationwide lockdown to curb virus infections threatens an already fragile economy.
Prime Minister Narendra Modi so far hasn’t pledged a big fiscal stimulus package to restart activity in Asia’s third-largest economy. The government has committed less than 1% of gross domestic product, lower than many major economies, to contain the damage from the pandemic, prompting economists and industrialists to pitch for more support.
There is still hope that the government can unveil a bigger stimulus as “the government keeps saying that the discussions are on,” said Sameer Kalra, an investment strategist at Mumbai-based Target Investing. Investors will need to watch how efficiently the stimulus is given and to whom – companies or households, he added.
India’s services industries, which make up half of the economy, have crashed, millions have lost their jobs, and government tax collections have dwindled. The nation so far has seen 56,351 cases with fatalities at 1,889, according to data compiled by Johns Hopkins University. Most of the Nifty companies that have announced quarterly results so far have missed estimates.
India’s sovereign bonds rallied after the government sold a new 10-year note at a yield lower than market expectations. The rupee strengthened against the US dollar. Twelve of 19 sector sub-indexes compiled by BSE Ltd fell, led by a gauge of power stocks. Hindustan Unilever Ltd and Nestle India Ltd are the top gainers on the benchmark index.
Reliance Industries Ltd contributed the most to the index’s rise after the company said Vista Equity Partners will buy a 2.3% stake in its Jio Platforms unit for Rs113.7bn ($1.5bn). The conglomerate is also considering selling its stake in India’s largest paint maker for $989mn, according to people familiar with the matter.
Meanwhile the rupee surged yesterday against the US dollar in the backdrop of firm domestic equities and a broad strengthening of other Asian currencies. The rupee today opened at 75.44 per US dollar and rose to 75.26 at day’s high as compared to previous close of 75.77. Domestic stock market benchmark Sensex rose about 500 points, tracking higher Asian equities.
The US dollar today slipped against a basket of six other currencies. The dollar index was down 0.15% to 99.75. The US dollar has surged over the past few sessions amid a flight to safety amid US-China tensions over the origin of coronavirus and worries over deeper recession even as countries across the world took steps to ease the lockdown.
Asian shares rose yesterday as investors focused on talks between US and Chinese trade officials and solid corporate earnings. Foreign institutional investors were net buyers in the capital market on Thursday, as they bought equity shares worth Rs19,056 crore, according to provisional exchange data.
However, traders said investor sentiment remains fragile amid concerns over the impact of Covid-19 pandemic on the domestic as well as global economy.
In India, the death toll due to Covid-19 rose to 1,886 and the number of cases climbed to 56,342, according to the health ministry. Meanwhile, India is taking its first baby steps to tackle a growing offshore market for its currency. Two exchanges, India International Exchange (IFSC) and NSE IFSC, began trading foreign-exchange settled rupee derivatives, part of a push to bring the market back home.
from Gulf Times https://ift.tt/3cgRRBh
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