Despite the nationwide lockdown, markets rallied on strong buying support, mainly driven by banks and financials. (File Photo)
Stock markets on Wednesday posted their best single-day rise in over 10 years in percentage terms aided by a strong rally in the global markets and expectations of a stimulus package by the government to revive the economy hit by the coronavirus pandemic. The BSE Sensex skyrocketed 1,861.75 points, or 6.98 per cent, to settle at 28,535.78 and the NSE Nifty zoomed 516.80 points, or 6.62 per cent, to end at 8,317.85.
Despite the nationwide lockdown, markets rallied on strong buying support, mainly driven by banks and financials. “Global markets have been trading in the green, driven by expectations of stimulus measures to support the respective economies ... A more stable rally can happen only after any news regarding virus containment comes in,” said an analyst.
Finance Minister Nirmala Sitharaman Tuesday said the Centre will soon announce a fiscal package to help the economy come out of the virus shock. Bourses in Shanghai, Hong Kong, Tokyo and Seoul rallied up to 8 per cent. Benchmarks in Europe were also trading up to 4 per cent higher.
Markets pin hopes on stimulus announcement
The clearing of the $2 trillion stimulus by leaders in the US has turned the sentiments positive globally. Markets in India, meanwhile, are keenly awaiting the stimulus package being planned by the government to bail out the economy.
Deepak Jasani, head—retail research, HDFC Securities, said Asian and European markets surged after the White House and the Senate reached an agreement over a stimulus to shore up the US economy against coronavirus. The deal aims to buttress the teetering economy by giving roughly $2 trillion to health facilities, businesses and ordinary Americans buckling under the strain of the pandemic.
“While there is a lot of momentum in the risk-on rally, volatility remains on overdrive and 2-3 consecutive days of gains are still awaited across the globe even as news on virus front does not moderate in terms of its worst outcomes,” he said.
S Ranganathan, head of research at LKP Securities, said, “Markets today mirrored the buoyancy displayed by Dow on expectations of a stimulus package. All sectoral indices on the BSE ended in the green.”