Factors behind biggest single day Sensex gain

Lucknow, April 07 (HS) The mood was upbeat in stock markets on Tuesday in the country and outside for different reasons. Steady fall in Corona casualty rates in Italy and Spain, many in this part of the country believe, was one of the reasons for the rally in other parts.

Two factors played key roles in the country. First, several states are studying the proposal to ease the lockdown imposed on March 24-25. Some of them excepting states like Maharashtra have given an indication of being opposed to the extension.

Shops and offices may reopen after April 14 with certain restrictions in these parts giving a sigh of relief to businessmen and others. Some of the losses may be made good. This hope coupled with factors like a new circular issued by the apex bank also helped. The Reserve Bank has now said, “The 3-month moratorium should be given to all unless a borrower informs the bank or NBFC that he/she is not interested in availing the facility ”.

This runs counter to what was told by some of the banks earlier. Many banks had given the option of deferring the payment of loan interest and principal only to borrowers who specifically had asked for it. The bank had taken a number of measures last month to provide relief to financially stressed sectors. The reduction of repo rate by 75 basis points was one of them. Three-month moratorium on payment of installments on all term loans was another.

The reports of Foreign Portfolio Investments to the tune of over 9900 crores could be also behind the rise of market sentiment as also removal of the restriction on some exports. The result of all this was probably that 30-share Sensitive Index or Sensex gained nearly 2476 points closing at 30,067.21. It was the biggest single-day gain in the last ten years. Investors got richer by over Rs seven lakh crores. The banking sector was one of the major gainers.