Sensex, Nifty rise as RBI outlines relief measures
BENGALURU (Reuters) – Indian shares gained on Wednesday, led by heavyweight financials, as the central bank rolled out a series of measures to support the coronavirus-ravaged economy, including allowing certain small borrowers more time to repay loans.
Reserve Bank of India (RBI) Governor Shaktikanta Das said the central bank has asked lenders to provide fresh moratorium to certain small borrowers, which will be available to individuals and small and medium enterprises that did not avail any restructuring in 2020.
“Small businesses and financial entities at the grassroot level are bearing the biggest brunt of the second wave of infections,” Das said, as he announced a slew of other measures to enhance liquidity and boost lending to various needy sectors.
“While financial conditions remain comfortable unlike the first COVID-19 wave, the monetary response function has focused on … helping banks manage their asset quality and support stressed borrowers, especially micro, small and medium enterprises,” said Madhavi Arora, lead economist at Emkay Global Financial Services.
By 0529 GMT, the blue-chip NSE Nifty 50 index was up 0.63% at 14,588.40, while the benchmark S&P BSE Sensex rose 0.60% to 48,544.21.
Both indexes had closed at their lowest in more than a week on Tuesday, as domestic coronavirus cases surged past the grim milestone of 20 million.
However, the RBI governor said the second COVID-19 wave was not “insurmountable” and that the future remained “bright”.
In Mumbai trading, financial stocks were the biggest boosts. The Nifty Bank Index rose 1.30%, while the Nifty PSU Bank Index gained 2.26%.
HDFC Bank Ltd advanced 1.2% and was the top boost to the Nifty 50.
India’s benchmark 10-year bond yield dipped to 5.9602% during the RBI governor’s address, before recovering to 5.99% by 0511 GMT, while the rupee was largely unchanged at 73.8 against the dollar.
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