India Stocks Rebound as Grim Services Data Boost Stimulus Bets
Indian Stocks Drop For Third Day as Market Awaits More Stimulus
(Bloomberg) -- Indian stocks rose in volatile trading, rebounding from their lowest level in almost two weeks as data showing a record contraction in the nation’s services industry in April underlined the need for more support measures from the government.
The S&P BSE Sensex rose 0.7% at the close in Mumbai, reversing earlier losses of as much as 0.9%. The NSE Nifty 50 Index advanced by the same magnitude. The gauges declined more than 6.5% in the previous two sessions after Prime Minister Narendra Modi Saturday extended stay-at-home orders for two weeks from May 4, while easing some restrictions.
India’s services purchasing managers index plunged by 43.9 points to 5.4 in April, hitting single digits for the first time and signaling a massive contraction in the economy during a 40-day lockdown. The government has committed less than 1% of GDP to contain the economic damage from the pandemic, prompting economists and industrialists to pitch for a bigger stimulus package.
“Investors are weighing if the government can give more stimulus as economic conditions are worsening everyday and the pace of infections is increasing,” said Chokkalingam G, chief investment officer at Equinomics Research & Advisory Pvt. in Mumbai.
The Sensex and the Nifty gauges logged their biggest monthly gains since 2009 in April, and have rebounded more than 20% from lows touched a month earlier. India has so far reported 49,400 Covid-19 infections and 1,693 deaths, data compiled by Johns Hopkins University show.
The Numbers
- Twelve of 19 sub-indexes compiled by BSE Ltd. rose, led by a gauge of financial stocks.
- Mahindra & Mahindra Ltd. and Bajaj Finance Ltd. were the top gainers on the benchmark index.
- ITC Ltd. and Axis Bank Ltd. were among the top losers on the Sensex Index after the Economic Times reported that the government intends to raise 220 billion rupees ($2.9 billion) from selling its stakes in the two companies.
Market-related stories
- World’s Worst PMI Signals 15% Contraction in India’s Economy
- Biggest Job Creator Short of Labor Amid Vast India Unemployment
- India Aims to Raise 220b Rupees From ITC, Axis Stake Sale: ET
- India’s Ailing Credit Market Shows the Limits of Central Bankers
- India Raises Special Tax on Fuel as Deficit Set to Breach Target
©2020 Bloomberg L.P.
