(Bloomberg) — Indian stocks gained, rebounding from record slides Monday, as some investors began picking out stocks that may have fallen too far, too quickly, even as much of the world’s second-most populous nation goes into lockdown in an effort to contain the spread of the deadly coronavirus.
The S&P Index advanced 1% to 26,239.96 as of 9:47 a.m. in Mumbai, and the NSE Nifty 50 Index also rose 1%. Both gauges fell 13% in the previous trading session — their biggest ever one-day decline — as the country’s coronavirus-linked cases surpassed 400. The MSCI Asia Pacific Index gained 3.4% on Tuesday as regional stocks rebounded.
Watch Mobius video: Our Excitement About India Has Not Diminished at All
Prime Minister Narendra Modi and state leaders over the weekend imposed an almost complete lockdown, which will probably worsen an economy already growing at its slowest pace in more than a decade. India has 467 virus cases so far, including seven deaths. But experts say the country could be on the same trajectory as Italy, where the outbreak quickly escalated, causing hospitals to overflow.
Read more: World’s Biggest Lockdown Prompts Tycoons to Seek India Rate Cuts
Oxford Economics has slashed India’s growth forecast for January to April to 3%, a number not seen even during the worst of the global financial crisis, even as the government weighs the possibility of a fiscal stimulus to support the economy. Meanwhile, the central bank last week announced measures to boost liquidity while holding back from following global peers with a rate cut.
In an effort to support the domestic market, the Securities and Exchange Board of India has lowered the compliance burden on market participants, including extending risk management framework deadlines for mutual funds. The regulator last week raised margin requirements and capped derivatives exposure for a month in a bid to subdue market volatility.
Foreign investors have sold $6.7 billion worth of Indian equities in March, on track for a record monthly withdrawal, according to data compiled by Bloomberg dating back to 1999.
Strategist View
“It’s a great time to pick up bargains in markets like India,” Mark Mobius, co-founder and partner at Mobius Capital Partners LLP, said in an interview with Bloomberg Television. “Many companies around the world, not only in India, are not going to be harmed that much by what is happening now.”
The Numbers
- Twelve of the 19 sector sub-indexes compiled by BSE Ltd. rose, led by a gauge of IT stocks.
- Infosys Ltd. was the top gainer on the Sensex index, up 7.5%, and gave the benchmark its biggest boost.
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