The Indian markets surged about 7 per cent on Wednesday as risk sentiment got a boost from the $2-trillion stimulus bill in the US. Hopes of a multi-billion-dollar relief package by the Indian government also kept investors’ mood buoyant.
The Sensex jumped 1,862 points to end at 28,536, while the Nifty50 index rallied 517 points, or 6.6 per cent, to settle at 8,318 — the biggest single-day gains for the benchmark indices since May 2009.
The $2-trillion package is touted as the world’s biggest fiscal response to a crisis. It includes unemployment insurance, small business loans, and loans for distressed companies.
“A lot of other countries have gone through this phase earlier in terms of total lockdown, whereas things have just started peaking in India,” said Andrew Holland, CEO, Avendus Capital Alternate Strategies.
The sharp gains in the domestic markets came a day after Prime Minister Narendra Modi announced a 21-day nationwide lockdown to contain the spread of COVID-19. While market players welcomed the move, they said it should be backed by relief measures.
“We are still waiting for a stimulus package from the Indian government. The US is on its course to unveil the biggest stimulus package in history, most of Europe has done large bailouts,” said Jyotivardhan Jaipuria, founder, Valentis Advisors, adding that investors would keenly watch the developments for further cues.
On opening, the benchmark indices had slipped into the red, even as some Asian markets jumped as much as 7 per cent, as the economic toll of the 21-day lockdown weighed on sentiment. However, sharp gains in index heavyweights such as Reliance Industries, HDFC Bank, and HDFC ensured that the markets ended the day on a high. Many stocks saw large block deals at lower levels. This led to a spurt in shares of Axis Bank, ICICI Bank, and Nestle India from their day’s lows.
All the Sensex stocks, barring four, ended the session with gains. Reliance Industries was the best-performing Sensex stock, gaining 14.6 per cent on reports that Facebook was eyeing a 10 per cent stake in Reliance Jio.