Indian shares up for 3rd straight session after US passes virus-relief bill

Indian shares rose for the third straight session on Thursday, as investors awaited a domestic stimulus to fight the impact of the coronavirus outbreak on an already slowing economy, and the US Senate passed a $2 trillion virus relief bill. Broader Asian equities rose and MSCI's broadest index of Asia-Pacific shares outside Japan was up 4.5 per cent.

"There were some hiccups, but the US has passed the bill," said Neeraj Dewan, director at Quantum Securities in New Delhi. "Now the cry for a good domestic package is getting stronger and anticipation is building."

As India began the second day of a three-week nationwide lockdown, the NSE Nifty 50 was 3.21 per cent higher at 8,584.45 by 0428 GMT, while the S&P BSE Sensex rose 3.41 per cent to 29,503.22.

The Nifty has climbed 9 per cent in the last two sessions as global sentiment improved as governments considered stimulus plans, but the blue-chip index is still down some 30 per cent since the start of this year as markets everywhere are pummelled by the crushing impact of the virus on business.

The US Senate on Wednesday overwhelmingly backed a $2 trillion bill aimed at helping unemployed workers and industries hurt by the coronavirus epidemic, as well as providing billions of dollars to buy urgently needed medical equipment.

Investors were encouraged by reports that the US Senate has passed a $2 trillion coronavirus relief package while a separate report said the Indian government was likely to agree an economic stimulus package of more than Rs 1.5 trillion to fight the downturn caused by the coronavirus outbreak.

The stimulus package comes as growth in Asia's third largest economy has slowed to multi-year lows, with five successive interest rate cuts by the central bank last year so far doing little to boost the economy.

The outbreak has infected over 550 Indians and killed 10, and the country is in the midst of a 21-day lockdown that has seen factories and businesses come to a halt.

Pharmaceutical and IT stocks led gains in India. The Nifty pharma index was up 2.67 per cent and on track to gain for a third straight day, while the Nifty IT index climbed 4.02 per cent. IndusInd Bank, down more than 70 per cent this year, was at the top of the Nifty 50 with a 15 per cent advance.

Meanwhile, the rupee was stronger by 0.26 per cent at 75.8450 against the dollar but still hovered around its all-time lows that it hit earlier this week.

 

The government is likely to agree an economic stimulus package of more than Rs 1.5 trillion ($19.6 billion) to fight a downturn in the country that is currently locked down to stem the spread of coronavirus, two sources familiar with the matter told Reuters.

The government has not yet finalised the package and discussions are ongoing between Prime Minister Narendra Modi's office, the finance ministry, and Reserve Bank of India (RBI), said both the sources, who asked not to be named as the matter was still under discussion.

One of the sources, a senior government official, said the stimulus plan could be as large as Rs 2.3 trillion, but final numbers were still in discussion.