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Sensex jumps 480 points; 4 factors that drove market rally

​RBI has said that it is ready to take appropriate actions to preserve financial stability

Last Updated: Mar 03, 2020, 05.43 PM IST
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RBI also added that they are monitoring global and domestic developments closely
NEW DELHI: Energised by RBI's statement on coronavirus, talks of relief measures by major economies and a scheduled conference call by Group of Seven finance ministers revived the market sentiments, pushing domestic equity indices higher.

BSE flagship Sensex gained 479.68 points to 38,623 while NSE benchmark Nifty added 170 points to close at 11,303.

Here are top factors that are pushing markets higher:

RBI ready to take appropriate measures
With an objective to boost confidence among the market participants after the recent selloff, the Reserve Bank of India (RBI) said that the spillovers to financial markets in India have largely been contained.

RBI also said it is ready to take appropriate actions to ensure orderly functioning of financial markets, maintain market confidence and preserve financial stability.

The central bank also added that it is monitoring global and domestic developments closely.

Relief measures coming?
Market took positive cues from the speculations on the Street that policymakers around the world would move to ease the economic fallout due to rapidly spreading coronavirus, ahead of a conference call by Group of Seven heads. Finance ministers from the group are expected to hold a conference call today.

A constant chatter from central banks for easing also helped the sentiments. The European Central Bank on Monday joined the chorus of central banks signalling a readiness to deal with the growing threats from the outbreak.

Earlier messages from the US Federal Reserve also said that it was prepared to act.

Coronavirus drug soon?
Efforts on developing drugs for treating Covid-19 are showing some results. Drugs to treat the novel coronavirus could be available by this summer or fall, US Vice President Mike Pence said on Monday.

Pfizer Inc. said that it has identified certain antiviral compounds it had in development that have the potential to inhibit coronaviruses and is engaging with a third party to screen the compounds.

The Gilead drug remdesivir has already been used to treat one infected patient in the US as part of a trial, and the intravenous antiviral is also being deployed in trials in Asia.

Other notable potential treatments include one being developed by Regeneron that uses monoclonal antibodies to fight the infection. The same strategy has been shown to be effective against Ebola.

Global markets rally
Buoyant global markets also energised the bulls in India. US markets saw the biggest daily jump since 2009. The Dow Jones Industrial Average jumped 5.09 per cent to end at 26,703.32 points, while the S&P 500 surged 4.60 per cent to 3,090.23. The Nasdaq Composite added 4.49 per cent to 8,952.17.

The improved sentiment helped U.S. S&P 500 futures climb up as much as 1 per cent in Asian trade on Tuesday but they trimmed gains to 0.1 per cent following news on the G7 draft statement.

European markets also opened with gains of over 2 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.7 per cent, paring the day's gains but still marking the second straight session of rises.

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