India stocks recorded their worst week since the global financial crisis even after surging the most in eleven years yesterday, amid concern that the coronavirus outbreak could derail the nation’s fragile economy.
The S&P BSE Sensex Index marked its biggest weekly decline since October 2008, after entering into a bear market in the previous week. The gauge surged 5.8%, the most in a single session since May 2009 yesterday, tracking gains in riskier assets globally as investors reviewed unprecedented stimulus measures to contain the damage from the virus.
The rebound yesterday from a three-year low trimmed the weekly loss to 12% for the Sensex index from 18% at its extreme point, which would have marked the gauge’s worst weekly fall since at least 1979.
India has reported 195 infections so far, with experts warning that containment measures that proved successful in some Asian countries may not work in the world’s second-most populous nation.
Prime Minister Narendra Modi on Thursday urged India’s 1.3bn citizens to stay indoors to protect themselves from the fast-spreading virus, hours after barring all international flights from landing in the country for a week starting March 22.
The central bank this week announced measures to boost liquidity but held back from following global peers with a rate cut. India’s government is considering offering easier loan repayment terms and tax breaks for smaller companies, a person with knowledge of the matter said, while Reuters reported that policy makers are considering stimulus worth as much as $1.6bn for the aviation sector, citing officials it didn’t identify.
A measure of Indian stock volatility is at levels last seen during the 2008 financial crisis, indicating investors are rushing to hedge against further wild price swings.
“There is some bargain hunting and short covering following the rebound in global equities and amid hopes of some stimulus measures by the government,” said Sameer Kalra, founder of Target Investing in Mumbai. “The trend, however, remains down.”
An employee sweeps the floor inside the Bombay Stock Exchange (BSE) building in Mumbai (file). The S&P BSE Sensex Index marked its biggest weekly decline since October 2008, after entering into a bear market in the previous week. The gauge surged 5.8%, the most in a single session since May 2009 yesterday.
