Stock markets on Tuesday staged a modest recovery amid positive global cues and expectations of a stimulus package by the government and the Reserve Bank of India. However, indices came down from the day’s high levels after Finance Minister Nirmala Sitharaman said an economic package was still underway even as she announced several compliance measures.
The Sensex which rallied 1,480 points at one stage, came down later and closed with a gain of 693 points, or 2.67 per cent, at 26,674.03. The NSE Nifty Index rose by 190.80 points, or 2.51 per cent, at 7801.05 despite the lockdown across the country. The rupee too gained 26 paise at 75.94 against the dollar.
Earlier, the investor sentiment got a boost after the US Federal Reserve on Monday rolled out several measures to support the US economy, including purchases of corporate bonds. On Monday, the BSE Sensex plummeted 3,935 points, or 13.15 per cent to 25,981.24 in the biggest daily crash in the history of the capital market.
Vinod Nair, Head of Research at Geojit Financial Services, said, “Markets seemed to breathe a sigh of relief today after the crash yesterday, in sync with the global markets. In addition to the huge relief package by the US Fed yesterday, there were also expectations of a fiscal package by the government.”
Analysts said market came off its highs after the Finance Minister made no significant announcement and the fact that the economic package was still in development. European and US manufacturing activity data due later, which may indicate the impact of Covid-19 on economies, could influence markets tomorrow, they said.
“After a sharp decline in the previous session, the Indian markets witnessed healthy buying interest led by positive global cues and rising hopes of a stimulus package from the government. The Nifty index ended higher by 2.5 per cent,” said Ajit Mishra, VP – Research, Religare Broking.
The broader markets underperformed wthe the BSE Midcap ending higher by 1.6 per cent whereas BSE Smallcap ended flat. On the sectoral front, except capital goods and realty, all the other indices ended with healthy gains. The IT index was the top outperformer gaining nearly 7 per cent followed by FMCG and Healthcare (up 2-3 per cent).
Though the announcement of relaxation of regulatory deadlines is definitely positive, markets are keenly awaiting a stimulus package from the government, analysts said. “Nonetheless, we believe the update on the spread of Coronavirus cases would be the single biggest factor dictating the market trend,” said an analyst.
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