BSE Sensex and Nifty are likely to stay volatile on Wednesday.
BSE Sensex and Nifty are likely to stay volatile on Wednesday.

Markets seen volatile as investors nervous about 21-day nationwide lockdown

  • On Wall Street, the Dow Jones Industrial Average soared 11.37%, its biggest one-day percentage gain since 1933
  • MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.3% with Australian shares rising 4.5%

Indian stock markets are likely to stay volatile on Wednesday after Prime Minister Narendra Modi declared a nationwide lockdown for 21 days, which will further hit the slow-moving economy.

In an unprecedented move, Modi said that there will be a three-week nationwide “complete lockdown" from midnight Tuesday in the world’s largest such exercise aimed at stemming the spread of coronavirus (COVID-19) that has infected over 500 people and claimed 10 lives in the country.

Asian shares extended their rally on Wednesday in the wake of Wall Street's big gains as US Congress appeared closer to passing a $2 trillion stimulus package to curb the coronavirus pandemic's economic toll.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.3% with Australian shares rising 4.5% and South Korean shares gaining 4.0%. Japan's Nikkei added 2.0%.

On Tuesday, MSCI's gauge of stocks across the globe gained 8.39%, the largest single-day gain since the wild swings seen during the height of the global financial crisis in October 2008.

On Wall Street, the Dow Jones Industrial Average soared 11.37%, its biggest one-day percentage gain since 1933.

US stock futures were down 0.5% in early Asian trade.

Investor fears about a sharp economic downturn are easing after the US Federal Reserve's offer of unlimited bond-buying and programs to buy corporate debt.

Back home, urban India is staring at a possible spike in food prices and scarcity of fruits and vegetables in the coming days, as transport curbs and pandemic fears open up a wide chasm between the farm and the fork. Major crop-growing states like Maharashtra, Madhya Pradesh, Rajasthan, Karnataka and Uttar Pradesh have imposed lockdowns or curfews in a desperate attempt to curb the spread of the novel coronavirus.

Facebook is in talks to buy a multibillion-dollar stake in Mukesh Ambani’s digital operation Reliance Jio to expand its presence in the Indian digital market, according to a report by the Financial Times, citing people with knowledge of the discussions.

The COVID-19 pandemic induced stock market carnage coupled with high debt levels has put Future Group promoter Kishore Biyani in a tight spot. Biyani, whose business appeared to be cruising along well, having struck several deals across group companies with the likes of Amazon, private equity firm Blackstone and Japan’s Nippon group in the last six months and whose group raised its first offshore bond in January, has seen his business upended in the last few weeks.

In the currency market, the dollar has slipped as a greenback liquidity crunch loosened slightly. The euro traded at $1.0798 after four straight days of gains.

The dollar stayed firmer against the yen due to dollar demands at the March 31 end of the Japanese financial, trading at 111.33 yen near a one-month high of 111.715 touched the previous day.

Gold soared almost 5%, its biggest gains since 2008, on Tuesday and last stood at $1,633, in part helped by concerns lockdowns in major producer South Africa could disrupt supply.

Still, the course of the market is still largely dependent on how much countries can slow the pandemic and how quickly they can lift various curbs on economic activity.

Confirmed cases are now topping 400,000 globally with New York City suffering another quick and brutal rise in the number of infections to around 15,000.

Oil prices steadied as hopes for US stimulus offset fears from falling global demand.

India, the world's third largest oil consumer, ordered its 1.3 billion residents to stay home for three weeks, the latest big fuel user to announce restrictions on social movement, which have destroyed demand for gasoline and jet fuel worldwide.

The market remained pressured by a flood of supply after Saudi Arabia started a price war earlier this month, a move that dealt a crushing blow to markets already reeling from the epidemic.

US crude futures rose 1.8% to $24.45 per barrel.

(Reuters contributed to the story)

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