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Bangalore: Indian stocks fell on Thursday after the government received a poorly received initial stimulus to help companies affected by the coronavirus, while a bleak outlook from the head of the US Federal Reserve. USA It further weakened the feeling.
India’s premier NSE Nifty 50 index erased its 2% gain since Wednesday, when markets applauded Prime Minister Narendra Modi’s announcement of an economic stimulus of Rs 20 trillion ($ 266 billion).
But initial details of the plan, which includes nearly $ 60 billion in loan guarantees for small businesses, shell banks, and power companies, failed to enthuse investors who expected more.
Economists said that although the measures described amounted to political support of Rs 5.9 trillion, the fiscal impact on the government budget would be less than Rs 250 billion.
“People were carried away by the hype created by the prime minister,” said Deepak Jasani, head of retail research for HDFC Securities in Mumbai.
“The cash infusion to boost the economy is very limited. There are questions about whether this will help in any way, at least in the short term.”
Still, Finance Minister Nirmala Sitharaman is expected to reveal more steps Thursday around 1600 local time (1030 GMT) and in the coming days, including possible land and labor reforms.
India has been under lockdown for several weeks that has affected the livelihoods of millions of workers, leaving many companies without income. Coronavirus infections have steadily increased in the country and on Thursday exceeded 78,000, with more than 2,500 deaths.
The NSE Nifty 50 Index finished 2.57% lower at 9,142.75, while the S&P BSE Sensex closed with a 2.77% drop to 31,122.89.
World markets also fell after an alarming warning from the World Health Organization that the coronavirus will never go away and US Fed President Jerome Powell’s prediction of a “prolonged period” of weak economic growth.
In India, shares of IT services fell further. The Nifty IT Index returned 3.5%, with Infosys Ltd falling 5.2%.
Reliance Industries Ltd, the petroleum-to-telecommunications conglomerate, was the biggest drag on the Nifty 50, down 4%.
HDFC Bank Ltd, down 3.6%, was the next biggest hurdle. The Nifty Bank Index fell 2.9%.
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