Markets shed Covid-19 pessimism with biggest single-day gain since 2009

Sentiment improves as virus spread shows signs of slowing

The Indian markets jumped nearly 9 per cent on Tuesday amid optimism that the spread of coronavirus was slowing in key global hotspots. 

Most global markets rallied sharply for a second day in a row as investor sentiment improved after encouraging signs from a few countries severely hit by Covid-19, and comments from President Donald Trump that the pandemic was beginning to level off in the US. The US markets soared 8 per cent on Monday and futures markets indicated another day of strong gains. The Dow Jones was up about 2.5 per cent as of 11:15 pm IST on Tuesday.

While the Indian markets were shut for a holiday on Monday, they more than made up by posting the biggest single-day gain in 11 years on Tuesday. The Sensex closed at 30,067, up 2,476 points, or 9 per cent, while the Nifty rallied 708 points, or 8.8 per cent, to end at 8,792 — the biggest single-day gains for both the indices since May 2009. 

 

 

The strong rally was underpinned by buying by overseas investors. On Tuesday, foreign portfolio investors (FPIs) were net buyers after many months, buying shares worth Rs 740 crore. 

While the absolute amount was relatively small, market players said the positive number was a huge sentiment booster. In March, FPIs pulled out a record Rs 62,000 crore from domestic equities. Experts said some investors had turned bullish as the lockdown measures had proved effective in containing the spread of the virus. 

“Until a few days ago, the markets closely tracked the change in daily new cases, but they are now focusing on the rate of change of daily new cases, which is decelerating,” Abhiram Eleswarapu, head of equities, BNP Paribas India, said.