Sensex jumps on Prime Ministers stimulus announcement

Domestic benchmark indices finally ended their continuous streak of volatile trading sessions as today, Sensex jumped by 2.03 per cent, which is by 637.49 points to close at the level of 32,008.61 while, Nifty inched up by 2.03 per cent, which is 187 points to reach the level of 9,383.55.

The positivity in the stock markets can be attributed to Prime Minister Narendra Modi’s address to the nation on May 12, wherein he announced a mega stimulus package of Rs 20 lakh crore, aimed towards supporting the economy which is shaken due to the long nationwide lockdown imposed for combating the spread of COVID-19. The package is said to be equivalent to 10 per cent of the country’s gross domestic product (GDP).

The new financial stimulus announced is combined together with the previously announced packages. Despite this economic booster, the domestic stock markets seemed to be shy today since Prime Minister’s announcement of ‘lockdown 4.0’ and may be also because he left the details of the package unknown in his speech. With market experts eagerly waiting to see the details of the economic package, the jump in futures is a classic case of ‘buy on rumour and sell on news’. The performance by domestic indices remained to be moderate by taking cues from weak global indices such as the fall in Hang Seng and Nikkei by 0.27 per cent and 0.49 per cent, respectively. Also, European indices such as FTSE 100, CAC 40 and DAX are trading in red, down by 0.88 per cent, 1.43 per cent and 1.28 per cent each. Fear of another wave of Coronavirus kept global stock prices on the lower side and the fear also resulted in a drop in oil prices.  

Gains across most sectors except that for pharmaceutical stocks pushed the markets higher, which was mainly led by strong buying interest in financial, banking and automobile shares. Sensex gainers included Axis Bank-up by 7.02 per cent, L&T-up by 5.98 per cent, ICICI Bank increased by 5.04 per cent, SBI gained by 4.44 per cent, M&M increased by 4.39 per cent, etc.

In Sensex basket of 30 stocks, four stocks declined namely Bharti Airtel fell by 0.70 per cent, HUL fell by 0.80 per cent, Sun Pharmaceuticals dropped by 2.47per cent and Nestle fell by 5.38 per cent.

As for sectoral indices, Bankex gained by 3.88 per cent while, Realty rose by 3.57 per cent and Finance saw an increase by 3.32 per cent. Apart from indices such as Telecom which fell by 0.09 per cent, FMCG which dropped by 0.61 per cent and Healthcare that closed in red, down by 0.82 per cent; all other BSE sectoral indices ended on a positive note.