Sensex Today: Antiviral drug success opens pathway to gains

Sensex Today: Antiviral drug success opens pathway to gains

A positive result for a treatment for COVID-19 is fuelling substantial gains in Asian markets, setting up Indian stocks for a strong open.   

The Singapore Exchange (SGX) Nifty futures – an early indicator of the NSE Nifty index – soared as much as 202.85 points to reach 9,752.00 levels ahead of the opening of Indian markets. 

Asian markets are surging on the final day of the month on optimism about an experimental drug that could help the world fight the coronavirus pandemic. Test results for the use of Gilead Sciences’ antiviral drug remdesivir showed potential to help patients recover from the disease.  

Japan’s benchmark Nikkei index, which was closed on Wednesday due to a national holiday, led gains regionally. The Nikkei 225 jumped 2.49 per cent as shares of robot maker Fanuc soared about 6 per cent. The Topix index was also up 1.65 per cent. Mainland Chinese stocks rose in early trade, with the Shanghai Composite up about 0.8 per cent while the Shenzhen Composite added 0.847 per cent.

The S&P/ASX 200 in Australia also rose 1.31 per cent.

Overall, the MSCI Asia ex-Japan index traded 0.62 per cent higher.

Markets in Hong Kong and South Korea are closed today on account of a holiday.

US stocks posted significant gains at the closing bell in New York, reflecting traders’ optimism about the promising coronavirus drug.

The Dow Jones Industrial Average was up 2.21 per cent or 532 points to close at 24,633.

The S&P 500 rose 2.66 per cent, or 76 points and closed at 2,939, while the Nasdaq climbed 3.57 per cent, or 307 points, to close at 8,914.

US Treasury earnings soared on Wednesday after the Federal Reserve said it would do all it can to support the economy hit by the pandemic.

Official figures released on Wednesday reveal that the gross domestic product or GDP fell at an annual rate of 4.8 per cent in the first quarter due to the shutdowns.

European markets also traded higher on Wednesday, as nations on the continent begin relaxing restrictions imposed to combat the spread of the new strain of coronavirus.   

London’s FTSE index led the way, trading 2.63 per cent higher at the end of the day, while Paris’s benchmark index, the CAC 40, closed 2.22 per cent higher. Germany’s DAX posted a 2.89 per cent gain on Wednesday.   

Oil prices also are recovering on signs the US crude glut is not growing as rapidly as expected and that gasoline demand battered by COVID-19 restrictions is starting to pick up. 

US benchmark West Texas Intermediate (WTI) crude soared to a high of $16.25 a barrel and were up 7.2 per cent, or $1.08, at $16.14 at 0147 GMT. The US benchmark surged 22 per cent on Wednesday.

Brent crude, the international benchmark, rose 3.9 per cent, or 88 cents, to $23.42 a barrel in light trading, with the June contract expiring today. The contract hit a high of $23.65 in early trading, having posted a 10 per cent gain on Wednesday.

The WTI contract for May delivery crashed to historic lows below zero last week, but recovered the next day to expire at $10.01 a barrel. The June contract for the US benchmark is now holding above $16 a barrel, and market strategists said while the market is expected to remain volatile, it may be closer to an equilibrium price between $15 and $20.