Banks, pharma lift Indian shares after cenbank unveils relief measures
BENGALURU (Reuters) – Financial and healthcare stocks pushed Indian shares higher on Wednesday after the central bank announced measures to help the sectors tide over a ferocious coronavirus wave in the country.
Reserve Bank of India Governor Shaktikanta Das announced relief to individual borrowers and small businesses by including one-time debt restructuring for loans, and unveiled a special liquidity window of up to 500 billion rupees ($6.76 billion) for banks to lend to the healthcare sector.
“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.
India’s healthcare system has been worn down by a massive surge in coronavirus cases and several states have been forced to enter lockdowns. The country accounted for nearly half of the COVID-19 cases reported worldwide last week, the World Health Organization said on Wednesday.
However, the RBI governor said the second COVID-19 wave was not “insurmountable” and that the future remained “bright”.
“Given the extent of the second wave of the pandemic and the suffering it has caused, the Reserve Bank of India has announced some timely liquidity measures that will provide relief to the most vulnerable by ensuring credit flow to individuals, small businesses and MSMEs…,” Shanti Ekambaram, group president – consumer banking, Kotak Mahindra Bank, said in a note.
On Wednesday, the blue-chip NSE Nifty 50 index closed 0.84% higher at 14,617.85, while the benchmark S&P BSE Sensex advanced 0.88% to 48,677.55.
The Nifty Bank Index rose 1.59%, while the Nifty PSU Bank Index, which tracks state-run banks, gained 1.47%.
Pharmaceutical stocks got the biggest boost from the RBI’s measures, with the Nifty Pharma index closing 4.12% higher.
Sun Pharmaceutical Industries jumped 5.9% and was the biggest percentage gainer on the benchmark Nifty 50.
India’s benchmark 10-year bond yield saw a low of 5.9602% during the RBI governor’s address and ended down 3 bps on day at 5.98%, while the rupee was slightly weaker at 73.91 against the dollar.
($1 = 73.9700 Indian rupees)
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