Indian Stocks Rebound Sharply, But Suffer Worst Week Since 2009

Indian stocks recovered strongly from an initial plunge to close about 4 per cent higher on Friday, as investors picked up beaten-down stocks amid rising hopes of coordinated stimulus measures to contain the impact of the coronavirus outbreak.

The indexes plummeted more than 10 per cent earlier in the session, triggering a trading halt for the first time since 2009, as panic over the pandemic gripped global markets.

The indexes swung wildly after trading resumed at 10:20 am following a 45-minute halt, before staging the third biggest intra-day recovery in Indian market history with a 16.36 per cent surge from the day's low.

Still, the NSE Nifty 50 index and the benchmark S&P BSE Sensex logged their worst week since 2009 as the holiday-shortened week was dominated by fears that the rapidly spreading virus could trigger a global recession.

"Global stocks have recovered, this is helping our markets. The 45-minute breather gave people time to think and value buying emerged," said Siddhartha Khemka, head of retail research at Motilal Oswal Securities.

The Nifty closed 3.81 per cent higher at 9,955.2 on Friday, while the Sensex climbed 4.04 per cent to 34,103.48. The indexes closed down more than 9 per cent each for the week.

India's volatility index closed up 25.1 per cent, easing from a decade high hit earlier in the session.

The rupee reversed losses to trade about 0.6 per cent stronger at 73.84 against the dollar by 3:48 pm. It had fallen to a record low of 74.5075 earlier in the session.

Helping turn the sentiment was moves by central banks from the United States to Australia to pump liquidity into their financial systems and as hopes grew that US Democrats and Republicans could pass a stimulus package on Friday.

"US stimulus hopes have helped arrest losses for the moment," Mr Khemka said.

MSCI's broadest index of Asia-Pacific shares outside Japan clawed back earlier losses to trade a touch higher, while European and US stock futures were in positive territory.

"Markets are acknowledging that they are in the oversold zone, so there is some buying support coming in," said Sujan Hajra, chief economist at Anand Rathi Securities.

Lender Housing Development Finance Corp Ltd led the recovery in Mumbai, closing 10.2 per cent higher in its best day in nearly 11 years.

HDFC Bank Ltd jumped 4.8 per cent, following a 10 per cent slide earlier in the session, while public sector peer State Bank of India surged 13.8 per cent, topping gains on the indexes.

Tata Steel Ltd was a close second gainer, closing up 13.7 per cent.