India Sensex’s Rebound Cut Short on Report of New Virus Cases

(Bloomberg) -- Indian stocks declined after the health ministry reported new novel coronavirus cases, taking the total number of infections in the nation to 28.

The S&P BSE Sensex dropped 0.6% to 38,409.48 in Mumbai after earlier swinging between gains and losses. It fell as much as 2% in the session. The index rebounded Tuesday, snapping the worst seven-day rout in almost five years that took it below a technical indicator that some investors read as a signal to buy stocks. The NSE Nifty 50 Index declined 0.5% today.

Fifteen Italian tourists and their Indian driver were tested positive for the virus, health minister Harsh Vardhan said Wednesday. Globally, infections rose above 93,000, with the death toll reaching 3,201.

India's central bank said it's ready to shield the economy from the effects of the virus that's disrupting global supply chains. With outbreaks in a slew of countries, the Federal Reserve cut rates in a bid to boost sentiment. The India NSE Volatility Index closed near a nine-month high.

Strategist View

• “The U.S. Fed action is more to boost sentiment,” said Anita Gandhi, Mumbai-based investment adviser at Arihant Capital Markets. “We will have to watch if the rate cut drives foreign investors into emerging markets or the risk-off sentiment persists.”
• “Policy action like the unexpected 50 basis point Fed rate cut may only help prevent financial turbulence, not drive economic revival,” Credit Suisse Group AG's equity strategists including Neelkanth Mishra wrote in a note.

The Numbers

• Sixteen of 19 sector indexes compiled by BSE Ltd. fell, led by a gauge of lenders
• HDFC Bank Ltd. fell 2.7% to be the biggest drag on the Sensex in weighted terms, while IndusInd Bank Ltd.'s 3.9% drop was the steepest.

Market-related stories

• Shadow Banks in India Face Their Biggest Funding Test Yet
• SBI Accepts Resolution Plan for RCom's Debt: Business Standard
• India's RBI Chief Sees Rate Cut as Option Amid Virus Threat

To contact the reporter on this story: Nupur Acharya in Mumbai at nacharya7@bloomberg.net

To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Margo Towie, Kasper Viita

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