Nifty, Sensex gain on hopes of government aid to tackle virus impact

Shares rose on Wednesday after the finance minister said the government would announce measures to tackle the financial fallout from the coronavirus outbreak amid a fall in new cases in China.

The broader NSE Nifty50 indexwas up 0.93 per centat 12,1014 by 0401 GMT, while the benchmark S&P BSE Sensexrose 0.6per centto 41,121.51.

Both the indexes declined nearly 1per centin the last two sessions due to the rising financial impact of the epidemic.

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Finance minister Nirmala Sitharaman met more than 200 business leaders to assess the impact of the coronavirus on Tuesday and said the government would unveil measures to help businesses.

However, she did not elaborate on what measures the government would take to limit the impact.

"If the coronavirus threats die down the markets may see a short-term bounce back," said Naveen Kulkarni, head of research at Reliance Securities.

"Corporate earnings have been weak. There are big challenges with regards to the resolution the banking industry has to see. There are banks that are still struggling to raise capital and there are more long-term challenges."

India's industrial output unexpectedly contracted in December, according to data released this month, showing that Asia's third-largest economy remains under pressure.

The blue-chip Nifty 50 index has fallen about 2.6per centfrom its Jan. 20 record intraday high of 12,430.50, weighed down by the impact of the outbreak and as the annual federal budget failed to address key concerns among investors.

Yes Bankfell 1.4per centafter the National Stock Exchange said on Tuesday it will drop the lender's shares from the blue-chip index.

The biggest gainer in the Nifty 50 was Bharti Infratel Ltd, up 7.1 per cent, followed by NTPC Ltd, which gained 3.5 per cent.