Indian shares slid on Thursday as an initial government stimulus to boost a coronavirus-hit economy failed to excite investors, while a dour outlook from the chief of the US Federal Reserve added to weak sentiment.
At 12:15 pm, the Sensex was down 637.89 points, trading at 31,370.72 and Nifty had shed 180.40 points to trade at 9,203.15. Bothe the indices are down two per cent.
Banking and IT stocks fell the most as markets parsed India’s announcement of nearly $60 billion of loan guarantees for small businesses, shadow banks and power companies.
The measures announced on Wednesday and part of a wider 20-trillion-rupee ($266 billion) fiscal and monetary package could help boost growth over the long term, but an immediate impact may not be felt, analysts said.
“The expectations were very high. It is a good scheme, but it will not have an immediate boost to the economy,” said A K Prabhakar, head of research at IDBI Capital in Mumbai.
Besides, a top World Health Organisation (WHO) official said the virus may never go away.
Except for Nifty FMCG and pharma, all sectoral indices at the National Stock Exchange were in the negative zone with Nifty IT down by 2.3 per cent, auto by 1.6 per cent and financial service by 1.4 per cent.
Meanwhile, Asia’s stock markets fell as worries about the second wave of coronavirus infections dashed hopes for a quick recovery.
US Fed Chair Jerome Powell warned of an extended period of weak economic growth and called for additional fiscal spending to stem the fallout from the pandemic.
MSCI’s broadest index of Asia Pacific shares outside Japan fell by 1 per cent while Japan’s Nikkei fell about 0.7 per cent. Benchmark indexes in Hong Kong, South Korea and China too dropped by about 1 per cent.
