Market clocks best 3-day rally in years

BSE gauge Sensex surged 1,410.99 points and investor wealth rose Rs 11.12 lakh crore in three days; stimulus measures calm investor jitters amid lockdown

By Author  |  Published: 26th Mar 2020  9:47 pm
ZOOMING AHEAD: Banking stocks were the top gainers with IndusInd Bank rallying up to 46 per cent.

Mumbai: Equity benchmarks surged for the third straight session on Thursday, logging their best three-day gains in years, after the government’s much awaited stimulus measures for coronavirus lockdown-hit segments lifted sentiments.

The BSE gauge Sensex surged 1,410.99 points or 4.94 per cent to settle at 29,946.77; while the NSE barometer Nifty shot up 323.60 points or 3.89 per cent to 8,641.45. After the worst-ever crash on Monday, the Sensex has recovered by 3,965.53 points or 15.26 per cent over the last three sessions. Likewise, the NSE Nifty has regained 1,031.20 points or 13.55 per cent in three days.

On the Sensex chart, IndusInd Bank was the top gainer, rallying up to 46 per cent. Other winners were Bharti Airtel, L&T, Bajaj Finance, Kotak Mahindra, Bajaj Auto, HUL and HDFC — rising up to 10 per cent. On the other hand, Maruti Suzuki, Tech Mahindra, Sun Pharma and Reliance Industries closed with losses.

All sectoral indices ended with gains with BSE telecom, capital goods, bankex, finance, realty and FMCG indices surging up to 10 per cent. The broader markets also gained momentum with the Nifty Midcap and Smallcap indices rising 3 per cent each.

In an effort to cushion the economic blow of the 21-day lockdown in wake of the Covid-19 pandemic, Finance Minister Sitharaman announced a slew of measures worth Rs 1.70 lakh crore to help citizens survive the crisis. Paras Bothra, President of Equity Research, Ashika Stock Broking, said, “Domestic markets zoomed for the second day on the trot driven by optimism on USD 2 trillion package to US economy and also in anticipation of an economic package for the Indian economy.

“Finance Minister indeed announced Rs 1,75,000 cr package for the poor and needy, however measures addressed to corporate or SMEs are still missing. Perhaps this will be followed by monetary stimulus by RBI along with forbearance on loan repayments.”

The Rs 1.70 lakh crore economic package involves free food grains and cooking gas to poor for the next three months, one-time doles to women and poor senior citizens, higher wages to workers and measures to boost liquidity of employees. The scheme will be implemented with immediate effect.

“This is a package for lockdown impacted segments,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, adding that the government is prioritising. “Industry-specific measures are likely to be announced in the next package. This can go a long way in implementing the lockdown,” he said.

According to traders, volatility remained during the day as March derivatives contracts expired. In a positive news for India’s fiscal health, the crude oil prices continued to trade below $30 a barrel amid steep fall in demand due to COVID-19 led lockdowns in major parts of the world.

International oil benchmark, Brent crude futures fell 2.15 per cent to $26.80 per barrel. Meanwhile, bourses in Shanghai, Hong Kong, Tokyo and Seoul ended significantly lower. Benchmarks in Europe were also trading in the red. The number of COVID-19 cases climbed to 649 in India and the death toll rose to 13, with one death reported each from Gujarat, Tamil Nadu and Madhya Pradesh, according to the Health Ministry.

Bank consolidation to take effect from April: FM

New Delhi: The government on Thursday said the mega bank consolidation plan is very much on track and will take effect from April 1 despite the onslaught of coronavirus pandemic throwing the country out of gear.

The Union Cabinet earlier this month approved amalgamation of 10 public sector banks into four global size lenders, beginning next financial year. Asked if the government is considering extending the deadline for merger of public sector banks, Finance Minister Nirmala Sitharaman said “at the moment there is nothing on that”.

Banking Secretary Debasish Panda said the merger process is very much on track and expressed hope that the banking sector would be able to meet the challenges thrown by the pandemic. “That is very much on the track. It’s parallel activity going on. As far as fund transfers etc are concerned, necessary arrangements will be made,” Panda said.

The statement assumes significance as there has been demand from some quarters for deferring the deadline due to coronavirus outbreak. All India Bank Officers’ Confederation (AIBOC) on Wednesday requested Prime Minister Narendra Modi to defer mega merger exercise of banks in view of coronavirus outbreak.

Banking services across the country are impacted due to COVID-19 as the lockdown is being observed across the country. Following the consolidation, there will be seven large public sector banks (PSBs), and five smaller ones. There were as many as 27 PSBs in 2017.

As per the mega consolidation plan, Oriental Bank of Commerce and United Bank of India will merge into Punjab National Bank; Syndicate Bank into Canara Bank; Andhra Bank and Corporation Bank into Union Bank of India; and Allahabad Bank into Indian Bank.

The merger will result in creation of seven large PSBs with scale and national reach, with each amalgamated entity having business of over Rs 8 lakh crore and it would help create banks with scale comparable to global banks and capable of competing effectively in India and globally.

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