Today's top business news: Aviation stocks rally as passenger flights to resume soon, oil continues to rally, Singapore joins the negative rate club, and more

A Virgin Australia plane is seen at Kingsford Smith International Airport in Sydney. File

A Virgin Australia plane is seen at Kingsford Smith International Airport in Sydney. File   | Photo Credit: Reuters

News updates from the world of economy, markets, and finance

The Nifty and the Sensex were up again this morning as lockdown restrictions continue to be eased across the country.

Meanwhile, analysts continue to gauge the road to economic recovery after the end of the lockdown.

Join us as we follow the top business news through the day.

4:30 PM

JPMorgan casts doubt on coronavirus lockdowns

 

4:00 PM

Sensex rises 114 points; FMCG, auto stocks rally

The benchmark indices were range-bound today after opening with modest gains.

PTI reports: "Equity benchmark Sensex rose 114 points on Thursday as investors accumulated FMCG, auto and IT stocks amid gradual reopening of the economy.

After rising to an intra-day high of 31,188.79, the 30-share index settled 114.29 points or 0.37 per cent up at 30,932.90. The broader NSE Nifty advanced 39.70 points, or 0.44 per cent, to 9,106.25.

ITC was the top gainer in the Sensex pack, rallying over 7 per cent, followed by Asian Paints, Hero MotoCorp, Maruti, Bajaj Auto, Sun Pharma, TCS and HCL Tech.

On the other hand, IndusInd Bank, NTPC, Bajaj Finance, HDFC and L&T were among the laggards.

Buying was seen in frontline stocks of sectors like auto, IT, metals and FMCG as traders took note of gradual opening of the economy, raising hopes of economic recovery, said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi.

However, at the fag-end of the session, some selling was witnessed as negative global cues continued for the second straight day and traders booked profits as weekly expiry neared, leading to indices losing majority of the gains, he added.

Concerns over the long-term impact of COVID-19 and worsening China-US relations too kept investors on the edge, traders said."

3:30 PM

Corporate revenues drop over 25% during lockdown; normalcy may take over 1 year to return

A survey-based estimate of the impact of the coronavirus-induced lockdown on businesses.

PTI reports: "Majority of high-ranking business managers confirm that corporate revenues have already declined by over 25 per cent during the lockdown and businesses will take more than a year to return to normalcy, according to a survey.

The survey titled ‘Covid-19 and Your Wealth’, conducted by online investment provider Scripbox, reveals the impact of the lockdown on company revenues and job losses.

Nearly 67 per cent of top bosses, business owners and founders surveyed said that company revenues have already declined by more than 25 per cent during the lockdown.

Further, all respondents believe that business will return to normal only by 2021, while 22 per cent business leaders expect it to take more than a year, from when the lockdown ends.

The online survey was conducted with Scripbox customers during May 1-15, 2020. Nearly 1,200 respondents consisting of business leaders took part in the survey. Of these, 54 per cent work in large corporates, 32 per cent in small and medium-sized enterprises (SMEs) and 14 per cent in startups."

3:00 PM

Shares tread water with stimulus, central bank meetings in focus

It looks like the rally in emerging market stocks may be losing steam as new risks emerge.

Reuters reports: "Emerging market shares trod water on Thursday as a rally on Wall Street looked set to fizzle out, with attention turning to a key policy gathering in China and central bank rate decisions from Turkey and South Africa.

Hong Kong and China mainland fell about 0.5% each ahead of a parliamentary session that could see more stimulus deployed across the world's second largest economy.

South African shares broke a four-session winning streak, and most emerging central European bourses traded in the red as well. Wall Street futures also pointed to a weaker open.

However, a surprise pick-up in export orders in Taiwan and easing curbs on air and rail travel in India , along with gains in Turkish stocks saw the overall emerging markets stocks benchmark trade flat, near last session's three-week highs.

“Risk is not firing on all cylinders this morning,” said Stephen Innes, Chief Global Markets Strategist at AxiCorp. He pointed to concerns about China's trade relations with Australia and United States, and investors holding back in the event that Beijing disappoints on stimulus."

2:30 PM

MF schemes being wound up can be listed, says SEBI

The Securities and Exchange Board of India (SEBI) has allowed listing of units of mutual fund schemes that are in the process of winding up so that investors get an exit option.

“As per MF regulations, there are several steps envisaged with respect to winding up of mutual fund schemes before the scheme ceases to exist. During this process, such units can be listed and traded on a recognised stock exchange, which may provide an exit to investors,” stated a SEBI circular issued on Wednesday, while highlighting the fact that close-ended schemes and units of segregated portfolio are allowed to list on the bourses.

Trading via the stock exchange mechanism will not be mandatory for investors; rather, they may avail an optional exit channel, it added. SEBI also directed stock exchanges to submit the operational modalities of the mechanism within seven days.

Read more
 

2:00 PM

Govt stimulus package does not address immediate concerns of healthcare system

The Centre may not have done enough through its stimulus package to boost India's healthcare system, believes Fitch.

PTI reports: "Fitch Solutions has said that the latest stimulus package does not address immediate concerns of the healthcare system which is reeling under the pressure of COVID-19 pandemic.

On March 11, the Ministry of Finance increased allocation - 0.008 per cent of the country’s GDP - to the health services division to support an expansion of healthcare spending, Fitch Solutions Country Risk and Industry Research (a unit of Fitch Group) said.

It is to be noted that this is not a new budgetary allocation, but only a rerouting of existing expenditure, it said, adding that the stimulus package is lacking in addressing the immediate concerns of the healthcare system .

The unprecedented crisis due to COVID-19 has highlighted the need to increase investment in the healthcare sector in the country.

Despite several healthcare reforms, India is badly placed to tackle the rapid spread of coronavirus.

The continued lack of medical funding and healthcare infrastructure suggests that the impact of further spread of the disease will be worse in India if it is not adequately contained, it said."

1:40 PM

Payments on PayPal skyrocket during lockdown

The lockdown currently in force across the country has made people to change their transaction behaviour. Disruptions such as demonetisation have been responsible for payment platforms, such as PayPal and Paytm etc, to witness a geometric rise in the number of digital transactions in India.

U.S.-headquartered digital payments-enabling platform, PayPal has on Wednesday revealed some interesting numbers in digital payments and trends it is observing that have emerged post the lockdown imposed after the pandemic.

According to Sri Shivananda, SVP and CTO, PayPal, there has been an unprecedented demand for online transactions over the past one month as usage of cash has reduced and share of digital money gone up drastically due to apprehension that currency notes or coins could be carriers of the virus.

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1:20 PM

Crude prices continue to rise, Brent above $36/bbl

The gradual easing of the global lockdown is turning out to be bullish for oil.

IANS reports: "Crude oil prices continued gaining momentum on Thursday on improved demand amid opening up of economies globally. Further, declining stocks in the US also supported the prices, analyst said.

Currently, the July contract of Brent crude on the Intercontinental Exchange (ICE) is trading at $36.70 per barrel, 2.66 per cent higher than the previous close.

Similarly, the WTI crude also surged on Thursday. On the NYMEX, the July delivery contract of WTI is currently trading at $34.33 per barrel, higher by 2.51 per cent from the previous close.

The easing of lockdown restrictions across countries has lifted the demand for transportation fuels. Further, the implementation of the output cut agreement by Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, has also supported the prices, analysts said.

OPEC and its allies led by Russia had last month agreed to reduce output by 9.7 million barrels per day (bpd) for May and June.

The recovery in oil prices comes after the freefall in April on concerns of decline in the storage capacity as supply surged although the demand remained nearly standstill.

In April, the WTI crude fell below zero and turned negative for the first time ever owing to the lack of storage."

 

1:00 PM

Singapore joins the negative rate club

 

12:00 PM

Cabinet approves ₹3 lakh crore funding for MSMEs

The Union Cabinet on Monday approved additional funding of up to ₹3 lakh crore to micro, small and medium enterprises (MSME) that was announced by Finance Minister Nirmala Sitharaman last week as part of the ₹20 lakh crore economic package.

Under the scheme, 100% guarantee coverage will be provided by National Credit Guarantee Trustee Company Limited (NCGTC) to eligible MSMEs and interested borrowers of the MUDRA scheme, in the form of a Guaranteed Emergency Credit Line (GECL) facility, the government said.

The tenure of loan under this scheme will be four years with a moratorium period of one year on the principal amount. No guarantee fee will be charged by NCGTC. Interest rates on loans extended by banks and financial institutions will be capped at 9.25%, and 14% for those extended by non-banking financial companies (NBFCs). The scheme would be applicable to all loans sanctioned under GECL till October 31, or till an amount of ₹3 lakh crore is sanctioned, whichever is earlier.

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11:40 AM

Aviation stocks rally as domestic passenger flights to resume from Monday

Airline stocks, which have been the worst hit due to the lockdown, are seeing a relief rally after the Centre's decision to resume air travel.

PTI reports: "Aviation stocks on Thursday rallied up to 10 per cent in opening trade after the government announced that domestic passenger flight services will resume from May 25 in a calibrated manner.

InterGlobe Aviation shares zoomed 9.88 per cent to Rs 1,002 on the BSE.

SpiceJet also jumped 4.88 per cent to Rs 42.95 -- its upper circuit limit.

Domestic passenger flight services will resume from May 25 in a calibrated manner, Civil Aviation Minister Hardeep Singh Puri said on Wednesday.

All scheduled commercial passenger flights have been suspended in India since March 25, when the government imposed a lockdown to curb the spread of the novel coronavirus.

“Domestic civil aviation operations will recommence in a calibrated manner from Monday, May 25, 2020. All airports and air carriers are being informed to be ready for operations from 25th May,” Puri said on Twitter."

11:20 AM

Rupee rises 13 paise to 75.67 against U.S. dollar in early trade

The rupee appreciated 13 paise to 75.67 against the U.S. dollar in early trade on Thursday tracking positive opening of domestic equities.

Forex traders said a positive start of domestic stocks supported the local unit, while sustained foreign fund outflows and concerns over coronavirus outbreak weighed on the local unit.

At the interbank foreign exchange, the rupee opened at 75.70, then gained ground to touch 75.67, registering a rise of 13 paise over its previous close.

On Wednesday, the rupee had settled at 75.80 against the dollar.

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11:00 AM

Franklin Templeton investors mull action

Franklin Templeton Mutual Fund, which was forced to wind up six debt schemes with assets worth nearly ₹26,000 crore last month, may well have initiated the process to refund investor money, but investors are mulling their own options to act against the fund house.

According to persons familiar with the development, a few investors are contemplating moving the high court or writing to the Securities and Exchange Board of India (SEBI), while some are even planning to make a representation to the Securities and Exchange Commission (SEC) for the parent entity’s alleged lack of supervision.

On April 23, Franklin Templeton MF announced abrupt closure of six debt schemes, attributing the decision to underlying illiquidity in the market for low-rated debt instruments. Thereafter, in a note to investors on May 15, Sanjay Sapre, president, Franklin Templeton Asset Management (India), said while the decision to wind up the schemes was the only “viable way to preserve value”, the fund house was “committed to ensuring an orderly and equitable exit for all investors at the earliest possible.”

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10:40 AM

World Bank names Harvard professor as chief economist

Carmen Reinhart, co-author of the classic work 'This Time is Different', now has a new work assignment.

IANS reports: "World Bank Group President David Malpass announced that Harvard University professor, Carmen Reinhart has been appointed as its new vice president and chief economist, effective on June 15.

“I am very pleased to welcome Carmen to the World Bank Group, as we boost our efforts to restore growth and meet the urgent debt and recession crises facing many of our client countries,” Malpass said in a statement on Wednesday.

“Carmen has dedicated her career to understanding and surmounting financial crises in both advanced and developing economies in order to achieve growth and higher living standards,” he said.

Reinhart, an economist on international finance and financial crises, is widely known for her award—winning scholarly history book on financial disasters, “This Time is Different: Eight Centuries of Financial Folly”, written with Harvard economist Kenneth Rogoff, reports Xinhua news agency.

The appointment came after the World Bank announced Tuesday that its emergency operations against COVID-19 have reached 100 developing countries, home to 70 per cent of the world’s population."

 

10:20 AM

Most will not order from restaurant for next 30 days: survey

Even as two major online food delivery platforms viz. Zomato and Swiggy recently laid off employees due to impact of COVID-19 outbreak on business, a new survey has found that 65% of the respondents will not order restaurant food for delivery at least for the next 30 days.

According to the survey by Local Circles, which saw participation from 14,347 individuals, 16% respondents said they will order food 1-2 times via food delivery apps in the next 30 days, 6% said they will do so 3-4 times, and 3% will be ordering more than four times. While 10% respondents were unsure of what they will do, 65% said they will not order restaurant food for delivery.

“This means that 25% citizens will order restaurant food once or more via food delivery apps in the next 30 days, and these numbers will likely increase with time,” the survey said.

Read more
 

10:00 AM

Sensex jumps over 150 points in opening trade; Nifty tops 9,100

The benchmark indices have opened the day with some minor gains amid continuing uncertainty over the coronavirus pandemic.

PTI reports: "Equity benchmark Sensex rose over 150 points in opening session on Thursday as investors accumulated index heavyweights HDFC twins, Kotak Bank and Reliance Industries amid mixed cues from global markets.

After rising to 30,989.03, the 30-share index was trading at 157.82 points or 0.51 per cent higher at 30,976.43

Similarly, NSE Nifty rose 38.45 points, or 0.42 per cent, to 9,105.

Bajaj Auto was the top gainer in the Sensex pack, rallying around 6 per cent, followed by Hero MotoCorp, Kotak Bank, HDFC Bank, Asian Paints and Maruti.

On the other hand, NTPC, ONGC, ITC and Tech Mahindra were among the laggards.

In the previous session, the BSE barometer climbed 622.44 points or 2.06 per cent to settle at 30,818.61, while the broader Nifty rose 187.45 points, or 2.11 cent, to 9,066.55.

Foreign portfolio investors offloaded equities worth Rs 1,466.52 crore in the capital market on Wednesday, provisional exchange data showed.

According to traders, market was trading higher tacking gains in select index heavyweights.

However, concerns over the long-term impact of COVID-19 and worsening China-US relations kept investors on edge."

 

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Printable version | May 31, 2020 10:11:24 AM | https://www.thehindu.com/business/businesslive-21-may-2020/article31638197.ece

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