Indian markets extended its rebound to the third day after the government today announced a ₹1.7 lakh crore economic package for the poor amid a nationwide lockdown. The Sensex finished 1,410 points higher at 29,946, extending its gains to about 4,000 points or 15% in three days in its biggest rally of recent years. The broader Nifty settled 4% higher at 8,641.
Two days into a 21-day nationwide lockdown to contain the spread of the coronavirus outbreak, Finance Minister Nirmala Sitharaman today announced relief for the poor that included direct cash transfers and food security measures. Aiding the sentiment across global financial markets was a $2 trillion virus relief bill approved by the US Senate.
Financial stocks were among the biggest gainers today with shares of Indusind Bank Ltd closing nearly 45% higher. The Nifty Bank index finished the day over 6% higher. The rupee also rose sharply today to close about 100 paise higher at 75.15 per dollar.
Here are comments from some market experts:
Ajit Mishra, VP – Research, Religare Broking
“The Indian markets continued its positive momentum led by supportive global cues and announcement of relief package from the government. The Finance Minister announced a relief package of Rs. 1.7 lakh crore which was largely focused on the vulnerable and underprivileged sections of the society.
The announcements from the government are positive but markets are anticipating more measures to reduce the impact of coronavirus on the economy. On the global front, government and central bank measures have kept the sentiments positive. This rebound in the expiry week has certainly relieved the participants but the sustainability of the move would depend on how the situation pans out on coronavirus front.”
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking
“Going by technical observations if Nifty manages to stay beyond 8750-8800 levels then we may see extension of the rally towards 9000-9300. Obviously we need not forget that current situation is different due to pandemic across the globe and hence, a possibility of whipsaws cannot be rules out. As far as supports are concerned, 8500 followed by 8300 would be seen as immediate supports. Although markets are at present witnessing a good relief move, traders should avoid aggressive bets and keep booking profits regularly on momentum trades.”
Vinod Nair, Head of Research at Geojit Financial Services
“The key takeaway from govt’s relief package is that it will provide a support to rural and semi-rural economy due to high amount of benefit in term of food, cash in hand and job safety. Regarding the market it will provide safety to defensive stocks like the staple industries but does not provide any relief to corporates like banks, hospitality and others. It seems that the majority of the benefits announced is factored in the market given more than 15% bounce from the recent low. The recovery of the market will continue if number of new virus cases reduces.”
Santosh Meena, Senior Analyst, TradingBells
The finance minister came out with some announcements in terms of relief package which was majorly attributed to poor people and farmers who are facing major problems during lockdown but there was no major thing which can boost market sentiments. The market has already rallied significantly in last 2-3 days in anticipation of some kind of announcements. There are some signs that we have made a probable bottom around 7,500 level as the market has discounted almost worst-case scenario but volatility will continue in tandem will global markets where the trend in coronavirus cases globally and locally will dictate the further direction of the market. Technically 8,900-9,000 will act as an immediate supply zone. In the downside 8100- 8000 has become an immediate and strong support area.”