March 25, 2020 / 7:29 AM / 4 days ago

UPDATE 1-Indian stocks recover as Asian shares stabilise on U.S. stimulus

(Updates levels)

By Chandini Monnappa

BENGALURU, March 25 (Reuters) - Indian shares rose 4% in mid-day trade on Wednesday, as U.S. senators and Trump administration officials reached an agreement on a massive economic stimulus bill to cope with the fallout from the coronavirus outbreak.

Broader Asia shares advanced with MSCI’s broadest index of Asia-Pacific shares outside Japan gaining 3.4%.

The NSE Nifty 50 index was up 3.9% at 8,103.05 by 0720 GMT while the S&P BSE Sensex rose 4.1% to 27,760.20.

“Gains in global markets are supportive and expectations of domestic stimulus have now gone up,” said Neeraj Dewan, director at Quantum Securities.

The Indian finance minister said on Tuesday the government would soon announce a fiscal package to help the economy face the hit from the virus outbreak.

In India, on day one of a 21-day lockdown ordered by the country’s Prime Minister Narendra Modi to contain the virus outbreak, stock markets swung between gains and losses.

Volatility will remain in the short-term and will be driven by news flow, said Arun Kumar, head of research at FundsIndia.

Both indexes opened higher and fell over 1% in early trade before returning to positive territory.

On Tuesday evening, Modi asked India’s 1.3 billion people to not leave their homes for the next three weeks sending people scrambling for essential items, as authorities across several countries move to keep people home and prevent the virus from spreading.

Despite the nation-wide shutdown, stock exchanges continue to function as usual. Indian financial markets have been battered in March as fears over the pandemic’s impact on an already slowing economy sent investors into a selling frenzy.

India so far has reported nearly 500 cases of the virus and 10 deaths.

On Mumbai’s main stock indexes, shares of Reliance Industries led gains, surging over 9%. A media report on Tuesday said Facebook Inc was in talks to buy a multi-billion dollar stake in the company’s telecom unit Jio.

Some financial stocks staged a recovery. The NSE Bank index which slipped over 2% in early trade was up nearly a percent.

Rupee and bond markets in India were closed on Wednesday for a local holiday. (Reporting by Chandini Monnappa in Bengaluru; Additional reporting by Derek Francis; Editing by Shounak Dasgupta)

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