Indian stock markets witnessed a smart recovery on 20th March, when BSE Sensex increased by more than 1627 points and NSE NIFTY 50 improved by 482 points. What does it indicate ? Are the Indian markets witnessing recovery because of regulatory ban on short covering or the markets have now discounted the corona virus threat ?
Indian Government is seen to be taking stringent measures to control the threat from the corona virus and the recovery is expected to start showing the results from the first week of April. Indian Prime Minister announced the Janata Curfew to fight the threat of the corona virus on Sunday, 22nd March. According to some experts, the life of Corona Virus is just 12 hours and if the strict curfew is observed under the Prime Minister’s Guidance it is expected the end the corona spreading story in India.
However, this may not be the only reason for the market to witness the smart recovery in today’s session.
The Securities and Exchange Board of India (SEBI) on March 20 announced measures to make short-selling of stocks difficult in order to counter the market volatility tiggered by the coronavirus outbreak.
Taking note of the continued abnormally high volatility in the market, the markets regulator said it discussed with stock exchanges, clearing corporations and depositories appropriate measures that may be taken in the existing circumstances.