Indian equity market indices on Tuesday surged in the pre-opening session as BSE Sensex rallied by 1,450 points while Nifty also surged over 300 points. However, both benchmarks quickly failed to hold gains as the domestic stock market continues to remain volatile.
BSE Sensex jumped over 1,450 points at the opening bell while NSE Nifty crossed the 8,000 point mark. But soon after trading started, both benchmarks gave up most of the gains.
At around 9:35 am, Sensex was trading 225 points or 0.87 per cent higher at 26,206.45 while Nifty was by 51 points or 0.68 per cent at 7,661.70. And just 20 minutes later, Sensex had already entered negative territory.
Market conditions remain volatile despite improvement in Asian stock markets as uncertainty continues over the possible economic impact of Covid-19 pandemic in India.
IT stocks were leading the early rally with companies such as Infosys, Tech Mahindra, HCL Tech gaining more than 6 per cent. Hindustan Unilever (HUL) also gained during morning trade.
Likewise, the Nifty IT Index was up almost five per cent while Nifty Pharma went up by almost 4 per cent. However, Nifty Bank gave up all gains and slipped into negative territory.
While most governments and central banks around the world have formally announced major relief packages to tackle Covid-19, the broader industry in India is still awaiting a formal announcement from the government regarding a financial package to help them.
Indian businesses, especially smaller ones, are expected to go through a period of extreme stress as the lockdown to prevent the virus has been extended to 548 districts.
The pressure on the companies could reflect on the stock market, say analysts and add that the volatility may continue until the situation normalises.
Given the situation, all eyes will be on the government’s economic action task force, which is expected to shortly announce a relief package for the wider industry apart from sector-specific relief measures.
ALSO READ | Coronavirus: From Covid-19 to pandemic, some key terms explained
ALSO WATCH | India fights coronavirus: Here’s all you need to know