Markets soar 6% on hopes of stimulus

nMUMBAI: After a tumultuous ride, Indian stock markets gained nearly 6% on Friday, the biggest single-day rise in six months, as investors hoped for a government package to boost the economy amid the Covid-19 crisis. Global equities also lent support. The BSE Sensex ended the day at 29,915.96, up 1627.73 points, or 5.75%, while the Nifty was at 8,745.45, up 482 points, or 5.83%.

“Indian markets bounced back on the back of positive global cues. Central banks across the world have announced various fiscal and monetary measures to cushion the impact of coronavirus. The news flow on the spread of coronavirus continues to be mixed with an exponential jump in new cases in the US though there is improving trend in China. Thus, the volatility could persist in the near term,” said Gaurav Dua, head, capital market strategy and investments, Sharekhan by BNP Paribas.

Markets in China, Hong Kong, Korea and Australia were up 1-7%. Markets in Japan were closed on Friday. China’s loan prime rates (LPR) on Friday were kept unchanged from their February levels, with both the 1-year and 5-year LPR steady at 4.05% and 4.75%, respectively. Central banks across the globe have reduced interest rates and announced plans to buy bonds, as governments worldwide try to combat the economic impact of the coronavirus outbreak.

On Friday, union finance minister Nirmala Sitharaman held a meeting of a task force formed to assess the impact of the pandemic and to find ways to tackle it.

According to Shrikant Chouhan, executive vice-president, equity technical research, Kotak Securities, the main reasons for the positive close of equity mar

kets were the precautionary measures taken around the world against coronavirus and fiscal stimulus announcements by the central banks. “After 10 days, India Vix has taken a breather. From 22 it jumped to 73 but closed at 66.75 today, which shows the market is showing signs of exiting the uncertainties.” However, analysts warned that the unabated spread of Covid-19 and the extent of its impact continued to worry investors.

The Indian rupee closed at 75.20 down 0.28% against the dollar on Friday.