The Indian equity indices look set for a bounce today after witnessing their sharpest 1-day fall in the previous session. The SGX Nifty ticked up over 300 points, in line with other Asian stocks which also rallied after the US Federal Reserve’s sweeping pledge to spend whatever it took to stabilise the financial system.
In its latest drastic step, the Fed offered to buy unlimited amounts of assets to steady markets and expanded its mandate to corporate and municipal bonds.
investors in Asia were encouraged enough by the Fed's measures to lift Japan's Nikkei by 4.9 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan added 1.2 per cent. South Korea and Australia also recouped a little of their recent losses.
The US Fed's move, however, proved insufficient to sooth Wall Street investors' fears about the coronavirus amid mounting death toll from the virus as more US states went into the lockdown. Moreover, investors had hoped the US Senate would clear a far-reaching coronavirus economic stimulus package over the weekend but Democrats and Republicans failed to reach agreement and on Monday the $2 trillion package failed to advance in the Senate.
In the end, the Dow Jones Industrial Average tumbled 3.04 per cent, while the S&P 500 lost 2.93 per cent overnight. The Nasdaq Composite dropped 0.27 per cent.
Oil prices also bounced after recent savage losses, and Brent crude firmed 53 cents to $27.56 a barrel.
While investors the world over are still calculating the impact of the measures taken by the US Fed and other central banks and governments on the global economy which is struggling against the fast spreading coronavirus, the virus itself continues to spread, with the total number of infected cases reaching over 3.7 lakh and 16,500 deaths. In India, all domestic flights were suspended from midnight Tuesday as the government stepped up a nationwide lockdown after the number of coronavirus cases rose to 471 on Monday.
At the bourses, benchmark indices suffered their worst single-day crash yesterday on growing fears of the coronavirus epidemic. The Sensex tanked 3,935 points to close at 25,981 and the Nifty fell 1,135 points to end at 7,610.
Besides, the Rupee's tumble continued and the currency crossed 76 a dollar for the first time yesterday and closed at 76.20 a dollar.