April 23, 2020 / 5:52 AM / a month ago

Banks, IT stocks buoy Indian shares as stimulus hopes support

(Updates shares, adds analyst comment)

By Chris Thomas

BENGALURU, April 23 (Reuters) - Indian shares rose in line with Asian markets on Thursday as oil prices recovered from a collapse earlier in the week, while hopes of a new stimulus package to mitigate the economic damage caused by the coronavirus outbreak lifted sentiment.

The NSE Nifty 50 index advanced 0.75% to 9,255.65 by 0542 GMT, while the benchmark S&P BSE Sensex gained 0.65% to 31,584.47.

IT and financial stocks led the gains in Mumbai, with Tata Consultancy Services Ltd rising for a second straight day, up about 3.3%.

Private-sector lender Kotak Mahindra Bank Ltd climbed 4.6%, while larger rival ICICI Bank Ltd gained 2.7%.

Asian markets rose after Wall Street ended higher as oil prices rebounded and the U.S. Senate approved nearly $500 billion more in aid to help small businesses weather the health crisis.

Hopes of new measures to jump-start growth buoyed domestic market sentiment, even as a senior minister said after a cabinet meeting on Wednesday that a package would be announced as and when it is designed.

A two-day meeting of the government's key economic advisory council starts on Thursday to discuss measures to boost the economy, the business newspaper Livemint reported here

“Markets are expecting some sort of stimulus from the government and there is also optimism that it will come forward to support the industry,” said Siddharth Purohit, Research Analyst at SMC Global Securities Ltd.

“But my concern is that if the government doesn’t act fast enough, the rally will fizzle out. Also, the Reliance-Facebook deal has brought in hope that FDI inflow will continue once the lockdown is lifted.”

While Western governments have spent trillions of dollars to contain the fallout of the crisis, India has so far announced only one round of stimulus worth about $23 billion, which included providing free cooking gas cylinders, grains and some cash to the country’s poor.

Consumer goods company Britannia Industries Ltd was among the top boosts to the Nifty, up nearly 10%, ahead of its quarterly results later in the day. The company is expected to benefit from consumers stockpiling on essentials during the lockdown, which has been extended into May.

Vodafone Idea Ltd surged 13.9% after parent Vodafone Group Plc said it had accelerated payment of $200 million to the company to provide liquidity to manage its operations.

Glenmark Pharmaceuticals Ltd jumped 9% to a near three-month high after a report said the company was seeking regulatory approval to conduct clinical trials for its version of Favipiravir - a drug being used globally to treat COVID-19.

Broadcasting firm Zee Entertainment Ltd soared 14.2% and was the top gainer on the Nifty 50.

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