India stocks rise as RBI unveils support to cope with Covid-19

Bloomberg

India stocks rise after the central bank unveiled measures to further support the economy as coronavirus cases continue to surge.
The S&P BSE Sensex gained 0.4% to 48,452.56, as of 11:33 am in Mumbai, while the NSE Nifty 50 Index advanced by the same magnitude. Thirteen of the 19 sector sub-indexes compiled by BSE Ltd climbed, led by a gauge of healthcare companies.
Additional liquidity of 500 billion rupees ($6.8 billion) to banks for lending to vaccine makers, hospitals and providers of health services, as well as lending measures for small businesses were among measures outlined
by Reserve Bank of India
Governor Shaktikanta Das.
“There has not been any major impact from an equity market perspective,” said Nikhil Kamath, chief investment officer at True Beacon, an India-based hedge fund. “However, the term liquidity facility for access to emergency health services is
positive overall.”
A gauge of healthcare stocks climbed as much as 2%, set for a record close, while the S&P BSE Bankex snapped three day losses to add 1.3%. The benchmark 10-year yield was down 3 basis points to 5.98% as Das announced a second tranche of bond purchases for May 20. The rupee was largely steady at 73.85 to a dollar.
The benchmark sensex had declined for the previous three sessions as coronavirus cases climb to new records. The Covid-19 wave will probably worsen before it starts to taper off sometime later this month, forecasters warn.
Sovereign bonds gained, with the yield on benchmark 10-year notes falling two basis points to 5.99%. Banking shares rose 1.1%, outperforming a 0.6% gain in the bellwether stocks index.
The rupee weakened to 73.97 versus the dollar.
Localised lockdowns imposed by Indian states to flatten the world’s fastest-rising pandemic curve have already started to impact businesses and jobs, with the potential to increase the number of problem loans.