The long-awaited deal for another round of US stimulus package has been sealed at a cap of $900 billion and comes down to $600 per week of direct unemployment benefits to each and every beneficiary.
Besides, funds for family, child welfare and government support programmes have been provided separately.
Overall, the package after protecting the American paychecks, has provisions to support the food stamps programme, educational institutions, small business, specific industries and funds for the Federal government.
It comes after the US Congress reached an agreement to pass the booster stimulus dosage which is the second-largest economic relief bill in history of the US after the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act.
This time, as well, the CARES Act will be used to channelise the stimulus funds to intended beneficiaries.
It is expected to provide fast and direct economic assistance, especially, given the Christmas holiday timing in the US.
Furthermore, the massive money flow is expected to percolate its way through to the emerging markets such as India, given the record low interest rates in developed economies.
Lately, healthy FIIs inflows have powered a rally in equities and gave an appreciation push to the rupee.
The FIIs were net buyers last week, investing around Rs 12,000 crore in the equity segment, while, in the week before, they pumped in around Rs 15,000 crore.
"The news coming out of the UK regarding the new strain of Covid-19 virus is really unnerving especially if it spreads to other countries. This will impact global growth which has just started to revive and may keep the markets subdued for a couple of sessions," said Deepak Jasani, Head of Retail Research at HDFC Securities.
"However, later depending on the evolving situation and the stimulus announcement which has already been factored in will lead to some more upswing in our market."
Anuj Gupta, Deputy Vice President, Angel Broking, said: "The latest US stimulus package will support the US market in terms of providing unemployment benefits, Covid vaccine distribution expense, education and health related measures."
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"It will also lend supports to the emerging economy. However due to this inflation may rise and US dollar may depreciate."
On Monday, a new mutant strain of Covid-19 discovered in the UK spooked global investors and saw India's stock markets plunge to their biggest single-day fall in the last seven months.
The two key indices -- S&P BSE Sensex and NSE Nifty50 - fell by over 3 per cent. The day's carnage saw Sensex losing a total market capitalisation worth around Rs 7 lakh crore. It is speculated that 'Basket' selling by FPIs likely triggered the sharp fall in Indian markets.
Foreign investors pulled-out liquidity worth Rs 323.55 crore on Monday. In addition, high valuation and absence of any positive trigger added weight to the slide.