Indian stocks close lower in spite of RBI’s bazookas; Corona virus does not spare UK PM
Even as Reserve Bank of India announced several relief measures, including a whopping 75 basis points cut in the repo rate, bringing it down to 4.4 per cent, Indian stocks failed to maintain their momentum today.
The fall indicated that a spectacular three-day rally that had the benchmarks surging could be losing steam as concerns over an impending recession heightened.
After opening significantly higher, the 30-share BSE barometer shed131.18 points or 0.44 percent at 29815.59. Sensex hit a high of 31,126.03 and a low of 29,346.99 in day trade. On the other hand, the broader Nifty closed 18.80 points, or 0.22 per cent, higher at 8,660.25.
As many as 16 stocks out of 30 Sensex stocks finished trade in red today with Hero MotoCorp tanking upto 8 per cent, followed by Bajaj Finance, Airtel and IndusInd Bank. Axis Bank, ITC, NTPC and M&M were among the top gainers.
Announcing the decisions of the Monetary Policy Committee (MPC), RBI governor Shaktikanta Das said the projected annual growth of 4.7 per cent for the fourth quarter of 2019-20 and 5 per cent for the whole fiscal was at risk due to the COVID-19 pandemic,
Online traders at Wisdom Capital noted that despite massive rate cuts, the repo cut – the lowest in at least 15 years –the markets turned red on concerns over the annual economic growth amid rising uncertainty over the COVID-19 pandemic.
Further, the RBI slashed the cash reserve ratio (CRR) for all banks by 100 basis points to 3 per cent unlocking Rs 1.37 lakh crore primary liquidity across the banking system. The reverse repo rate, too, was lowered by 90 basis points.
The central bank also allowed banks to put on hold monthly instalment payments on all term loans for three months.
Wisdom Capital analysts agreed that the macro economic fundamentals of the Indian economy are sound.
However, analysts felt instead of three months, a moratorium of six months would have helped borrowers, including businesses and people, cope with economic pressure better as they face massive loss of income due to lockdown in the country.
The coronavirus outbreak that has thrown global financial markets out of gear continues to spread with 550,300 infected across the world and causing 24,903 deaths. The total number of coronavirus cases in India has surged to 724 and the death toll now stands at 17 as on Friday afternoon.
Nearly a third of the world’s population is living under coronavirus-related restrictions, including India’s 1.3 billion on 21-day lockdown. The United States now leads the world in confirmed cases after surpassing China’s reported total.
Meanwhile, Asian stocks mostly rose. Japan’s Nikkei was higher at 1.9 per cent. South Korea was flat but benchmarks rose 0.6 per cent in Hong Kong and 0.8 per cent in China.
Gains in Asian shares, however, did not carry over into Europe.
London stocks had extended losses by midday on Friday after three days of gains, as it emerged that Prime Minister Boris Johnson had tested positive for the coronavirus, but is only experiencing mild symptoms.