India Stocks Trim Worst Losses in Five Weeks on Stimulus Hopes
India Stocks Trim Worst Losses in Five Weeks on Stimulus Hopes
(Bloomberg) -- Indian stocks gained on Friday, trimming their worst weekly performance in five, as investors weighed the prospect of government stimulus to counter the economic damage from the coronavirus pandemic.
The S&P BSE Sensex and the NSE Nifty 50 Index rose by 0.6% each. For the week, the benchmark index dropped 6.2%, marking its worst fall since April 3, as the extended nationwide lockdown to curb virus infections threatens an already fragile economy.
Prime Minister Narendra Modi so far hasn’t pledged a big fiscal stimulus package to restart activity in Asia’s third-largest economy. The government has committed less than 1% of gross domestic product, lower than many major economies, to contain the damage from the pandemic, prompting economists and industrialists to pitch for more support.
There is still hope that the government can unveil a bigger stimulus as “the government keeps saying that the discussions are on,” said Sameer Kalra, an investment strategist at Mumbai-based Target Investing. Investors will need to watch how efficiently the stimulus is given and to whom - companies or households, he added.
India’s services industries, which make up half of the economy, have crashed, millions have lost their jobs, and government tax collections have dwindled. The nation so far has seen 56,351 cases with fatalities at 1,889, according to data compiled by Johns Hopkins University.
Most of the Nifty companies that have announced quarterly results so far have missed estimates.
India’s sovereign bonds rallied after the government sold a new 10-year note at a yield lower than market expectations. The rupee strengthened against the U.S. dollar.
The Numbers
- Twelve of 19 sector sub-indexes compiled by BSE Ltd. fell, led by a gauge of power stocks.
- Hindustan Unilever Ltd. and Nestle India Ltd. are the top gainers on the benchmark index.
- Reliance Industries Ltd. contributed the most to the index’s rise after the company said Vista Equity Partners will buy a 2.3% stake in its Jio Platforms unit for 113.7 billion rupees ($1.5 billion). The conglomerate is also considering selling its stake in India’s largest paint maker for $989 million, according to people familiar with the matter.
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