Markets rally 9% on global cues, hopes of easing virus spread

MUMBAI: Indian stock markets saw a massive rally on Tuesday, riding on optimism that the spread of the covid-19 outbreak may be slowing in a few countries. Gains in other global peers also fuelled Indian equities and raised expectations that the virus may have peaked in some of the worst-hit countries.

Indian markets surged nearly 9%, its biggest single-day gain since May 18, 2009. The Sensex ended at 30,067.21, up 2,476.26 points or 8.97%, while the 50-share index Nifty was at 8,792.20, up 708.40 points or 8.76%. In absolute terms, markets on Tuesday staged their biggest single-day gains ever, adding investor wealth of ₹7.89 lakh crore.

Markets in other parts of Asia such as Japan, China, Hong Kong, and Korea were up around 2% each. Globally, equity markets responded favourably to a slowing rate of new covid-19 cases, especially in the US and Europe, according to Gaurav Dua, head, capital market strategy and investments, Sharekhan by BNP Paribas.

“The daily addition has dropped to below the 10% level in the last couple of days and is showing a flattening of the curve in hotspot countries such as Italy and Spain. However, it is too early to call out the bottom. Deep corrections usually see bounces followed by waves of selling or correction. Importantly, the news turned positive after a long time and the breath of markets improved significantly which is an encouraging change in itself,” he said. Investors are also building expectations to see increase foreign fund flow to India if MSCI Emerging Markets index increases the weightage of India.

From April 1, 2020, India moved into a new regime on foreign limits whereby the foreign portfolio investment limit has been increased.