Indian shares rose for the third straight session on Thursday, as investors awaited a domestic stimulus to fight the impact of the coronavirus outbreak on an already slowing economy, and the U.S. Senate passed a $2 trillion virus relief bill.
Broader Asian equities rose and MSCI's broadest index of Asia-Pacific shares outside Japan was up 4.5%.
"There were some hiccups, but the U.S has passed the bill," said Neeraj Dewan, director at Quantum Securities in Mumbai. "Now the cry for a good domestic package is getting stronger and anticipation is building." As India began the second day of a three-week nationwide lockdown, the NSE Nifty 50 was 3.21% higher at 8,584.45 by 0428 GMT, while the S&P BSE Sensex rose 3.41% to 29,503.22.
The Nifty has climbed 9% in the last two sessions as global sentiment improved as governments considered stimulus plans, but the blue-chip index is still down some 30% since the start of this year as markets everywhere are pummelled by the crushing impact of the virus on business.
The U.S. Senate on Wednesday overwhelmingly backed a $2 trillion bill aimed at helping unemployed workers and industries hurt by the coronavirus epidemic, as well as providing billions of dollars to buy urgently needed medical equipment. Reuters reported on Wednesday that India was likely to unveil an economic stimulus package of more than 1.5 trillion rupees ($19.6 billion) to fight the pandemic-fueled downturn in the country. India was likely to announce the package by the end of the week, sources said.
The stimulus package comes as growth in Asia's third largest economy has slowed to multi-year lows, with five successive interest rate cuts by the central bank last year so far doing little to boost the economy.
The outbreak has infected over 550 Indians and killed 10, and the country is in the midst of a 21-day lockdown that has seen factories and businesses come to a halt. Pharmaceutical and IT stocks led gains in India. The Nifty pharma index was up 2.67% and on track to gain for a third straight day, while the Nifty IT index climbed 4.02%.
IndusInd Bank, down more than 70% this year, was at the top of the Nifty 50 with a 15% advance. Meanwhile, the rupee was stronger by 0.26% at 75.8450 against the dollar but still hovered around its all-time lows that it hit earlier this week.