Market volatility has shot up once again today with stocks down over 7% at open amid the coronavirus scare.
The rupee too has plunged to a record low against the US dollar as investors continued to aggressively sell domestic assets.
RBI extends liquidity support to Yes Bank
To avoid a possible depositor run, the RBI has extended an emergency credit line to Yes Bank. The RBI moratorium that limited deposit withdrawal from Yes Bank, it is worth noting, was lifted last evening.
PTI reports: "To tide over liquidity issue, the Reserve Bank of India (RBI) has extended Rs 60,000-crore credit line to Yes Bank so that it meets obligation of depositors, sources said.
This is in line with assurance given by RBI Governor Shaktikanta Das on Monday saying the regulator was ready to offer liquidity if required after lifting of moratorium.
As per Section 17 of RBI Act 1934, the central bank can provide liquidity support to any lender in the form of loans and advances against collateral such as stocks, funds and securities (other than immovable property) in which a trustee is authorised to invest trust money by an Act of Parliament."
Stocks trim losses
The benchmark stock indices were down over 2% at the end of trading today. The Sensex lost nearly 600 points while the Nifty was trading below 8,300.
In the morning session, both the Sensex and the Nifty were trading at a loss of over 7% just minutes after open.
The economic impact of the shutdown ordered by the government has rattled stocks in various sectors including airlines, automobiles etc.
Airline industry may not survive without state aid, says Lufthansa
Travel bans imposed by governments to tackle the spread of the coronavirus pandemic threaten to completely down the airline industry.
Reuters reports on the threat: "Lufthansa said that the airline industry may not survive without state aid if the coronavirus epidemic lasts for a long time, as it throws everything at bringing home stranded travellers and keeping industrial supply chains open.
The German airline group has slashed capacity, proposed short-time working and suspended its dividend, saying it was impossible to forecast the impact of coronavirus on profitability.
The desperate outlook came as airline turmoil deepened on Thursday, with Australia's Qantas Airways Ltd telling most of its 30,000 employees to take leave and India preparing a $1.6 billion rescue package to aid carriers."
The 2008 crisis saw Wall Street banks being bailed out by governments using taxpayer money. Will 2020 witness a similar bailout of airlines?
Sebi allows delayed filing of 4th quarter results amid coronavirus scare
The chief markets regulator has come up with a few relief measures to ease the pain on companies affected by the coronavirus shutdown.
PTI offers details: "Markets regulator Sebi on Thursday gave relaxation of 45 days to companies for filing fourth quarter financial results and one-month extension to file results for 2019-20.
Besides, relaxation of one month has been given for filing quarterly corporate governance report and three week each for shareholding patten and statement of investor complaint reports, the regulator said in a circular.
The decision has been taken in the wake of coronavirus pandemic, which has resulted in many restrictions, including free movement of people, thereby hampering businesses and day-to-day functioning of companies."
Rupee weakens past 75/USD mark
Manojit Saha reports from Mumbai:
The rupee came under pressure on Thursday amid a weak equity market and crossed the psychological barrier of 75 a dollar mark.
The rupee opened weak at 74.96 a dollar as compared to previous close of 74.23 a dollar. It was trading at 75.07 a dollar after touching 75.16 in afternoon deals.
About 25 million jobs could be lost worldwide due to coronavirus: UN
Nearly 25 million jobs could be lost worldwide due to the coronavirus pandemic , but an internationally coordinated policy response can help lower the impact on global unemployment, according to a UN agency.
In its preliminary assessment report titled “COVID-19 and world of work: Impacts and responses”, the International Labour Organization (ILO) calls for urgent, large-scale and coordinated measures across three pillars — protecting workers in the workplace, stimulating the economy and employment, and supporting jobs and incomes.
ECB announces stimulus to counter coronavirus effect
It looks like European bonds, many of which are already trading at negative yields, will witness further demand from the European Central Bank, pushing yields even lower.
Reuters reports on the details of the ECB's bond purchase program: "The European Central Bank (ECB) announced a public and private bond-buying program worth 750 billion euros ($817 billion) to counter the risks posed by the coronavirus pandemic to its monetary policy.
Purchases made under the new Pandemic Emergency Purchase Program “will include all the asset categories eligible under the existing asset purchase program”, Efe news quoted the statement as saying.
The ECB said it would explore all options and contingencies to support the economy and expressed its willingness to revise some of its self-imposed limits that might come in the way of actions the entity needed to take in order to fulfil its mandate."
E-tailers see spike in ‘corona’ sales
E-tailers are reporting a sudden surge in sales volumes in the last two weeks, after a large number of shoppers took to online shopping to avoid stepping into malls, super markets and crowded open bazaars.
Redseer Management Consulting, a firm which tracks consumer internet space, said there had been a clear 20% spike in e-tailing with grocery sales alone witnessing a huge uptick at 50% in the last weekend.
Rupee drops to record low as investors rush for exit
As foreign investors continue to sell Indian assets amid the pandemic scare, the rupee is taking a heavy beating dropping more than 1%
PTI reports on the rupee crash: "The Indian rupee plunged 70 paise to 74.96 against US dollar in early trade on Thursday as investors fretted over the sharp rise in coronavirus cases in the country and its impact on the economy.
Traders said there is a sense of anxiety among investors as they see the global as well as domestic economy plunging into a deep crisis due to coronavirus (Covid-19) pandemic that has killed nearly 9,000 and sickened lakhs of people around the globe.
Foreign investors remained net sellers in Indian capital markets as they pulled out more than Rs 5,085.35 crore on Wednesday, market data showed."
Investors seek safety in cash amid market turmoil
As stocks across the world continue to crash in what is termed as the sharpest bear market in history, investors aren't turning to bonds, or even gold for safety.
Instead, they are turning towards cash.
Reuters reports: "Stocks, bonds, gold and commodities fell as the world struggles to contain coronavirus and investors and businesses scramble for hard cash.
Nearly every stock market in Asia was down and circuit breakers were hit in Seoul, Jakarta and Manila. Traders reported huge strains in bond markets as distressed funds sold any liquid asset to cover losses in stocks and redemptions from investors.
Benchmark 10-year sovereign bond yields in Australia, New Zealand, Malaysia, Korea and Singapore and Thailand surged as prices tumbled. Gold fell 1% and copper hit its downlimit in Shanghai.
“We're in this phase where investors are just looking to liquidate their positions,” said Prashant Newnaha, senior interest rate strategist at TD Securities in Singapore."
Stocks crash at open
The Nifty and the Sensex are down over 7%, just minutes after open, as the coronavirus scare continues to rattle markets.
Ashish Rukhaiyar reports from Mumbai:
"Benchmark equity indices lost over 7% in the first few minutes of the trading session on Thursday with the Nifty falling below the 8,000-mark for the first time since December 2016.
At 9:25 AM, the Nifty was trading at 7,861, down 608 points or 7.18%. The Sensex plunged 2,119 points or 7.34% to fall below the 27,000-mark at 26,750.
More than 1,100 stocks lost ground during the morning session as against less than 150 declines.
All the 30 constituents of the Sensex pack were in the red with stocks like IndusInd Bank, HCL Technologies, Bajaj Finance and Kotak Mahindra Bank all shedding more than 10% each."
Yes Bank back in business, extends hours
The moratorium on Yes Bank, which came into effect from March 5 with cash withdrawals capped at ₹50,000, was lifted at 6 p.m. on Wednesday, allowing the lender to resume all operations including digital payment channels such as Immediate Payment Service (IMPS) and National Electronic Funds Transfer (NEFT), among others.
“Our banking services are now operational. You can now experience the full suite of our services. Thank you for your patience and co-operation,” the private sector lender said.
