Stocks have opened positive this morning and signals coming from the government suggest a significant easing of lockdown restrictions soon.
The second economic stimulus package which has been eagerly awaited by many, however, still seems to be in the works.
Join us as we follow the top business news through the day.
India can't take the generosity of markets for granted, says former RBI Governor
GDP growth pegged between -0.9% and 1.5%: CII
Confederation of Indian Industries on Thursday said it expects India’s economy to grow at a much slower pace, ranging from a contraction of 0.9% to a growth of 1.5%, in the current financial year, due to the COVID-19 outbreak and the subsequent nationwide lockdown.
“Given the extent of the damage to the economy from the disruption to business, the GDP growth in FY21 will likely be the lowest in many decades,” Chandrajit Banerjee, Director General at CII said.
Noting that by the time the second phase of lockdown ends on May 3, it will have extended for 40 days, the industry body said the economic costs of the lockdown are rising each passing day with the impact being felt across sectors. “The situation requires immediate, across the board intervention from the government,” it added.
Sensex jumps over 483 points; Nifty tops 9,300
The benchmark indices opened with gains this morning and witnessed strong buying throughout the day.
PTI reports: "Equity benchmark Sensex surged over 483 points on Thursday, tracking gains in IT and banking stocks as expectations of another stimulus package from the government enthused investor sentiment.
The 30-share index ended 483.53 points or 1.54 per cent higher at 31,863.08. The broader NSE Nifty advanced 126.60 points, or 1.38 per cent, to settle at 9,313.90.
Kotak Bank was the top gainer in the Sensex pack, rallying over 8 per cent, followed by TCS, Infosys, ICICI Bank, HCL Tech and ONGC.
On the other hand, Titan, HUL, PowerGrid, NTPC and Nestle India were among the laggards.
Indian markets opened on a positive note tracking mostly positive global markets as oil prices were seen rebounding after catastrophic falls a few days back amid some decline in volatility, said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi.
Market participants also anticipate another stimulus package from the government in the wake of the COVID-19 outbreak, he added."
RBI to simultaneously buy, sell g-sec worth Rs 10,000 crore each on Apr 27
In what is seen as an attempt to influence the shape of the yield curve, the RBI will be buying and selling government bonds next week.
PTI reports: "The Reserve Bank of India (RBI) will simultaneously purchase and sell government securities worth Rs 10,000 crore each through a special open market operation (OMO) on April 27.
In a statement, the central bank said special OMO of simultaneous purchase and sale of government securities (g-sec) will done using the multiple price auction method.
“On a review of current and evolving liquidity and market conditions, the Reserve Bank has decided to conduct simultaneous purchase and sale of government securities under OMO for Rs 10,000 crores each on April 27, 2020,” it said.
The RBI further said it reserves the right to decide on the quantum of purchase/sale of individual securities and accept or reject any or all the bids and offers either wholly or partially without assigning any reasons."
Govt did not want to give one big package, many medium size packages likely
That's the signal coming from the Principal Economic Adviser to the government amid criticism that the government has done very little to help the economy in the midst of the lockdown.
IANS reports: "The government did not want to give one big package unlike other countries and many medium size packages are likely to be announced and response will be sooner than anticipated, according to Sanjeev Sanyal, Principal Economic Adviser, Finance Minister.
In a call hosted by Elara Capital on Wednesday, Sanyal said the government wants to direct more resources in the rebuilding phase. A spokesperson from Elara Capital refrained from commenting on the call.
In the fiscal response, he indicated that more measures will come. Sanyal said the government is preparing for the long haul and keeping the powder dry. “Most other countries have responded in a knee jerk fashion and have nearly exhausted their ammunition. Govt in India knows that we are in this for a long haul and hence more pronounced responses will be needed over next few months as the full scale of economic impact becomes visible,” he added.
He indicated the packages will come “in reasonable time”. “Within reasonable limits the government shall make allowances for the current fiscal situation. We got to be sure that the government doesn’t spend all our ammunition at one go”, he said.
He emphasized that India has taken a different approach to fight the covid pandemic and is mindful of the repercussions if the epidemic is not controlled."
Govt freezes inflation-linked salary hike to combat coronavirus
The Centre, suffering from a drop in tax revenues owing the lockdown, has chosen to freeze salary hikes for its employees till the second half of next year.
Reuters reports: "India on Thursday froze inflation-linked hikes of salaries and pensions of federal employees and pensioners as part of efforts to generate resources to combat coronavirus outbreak, a government statement said.
The decision will be effective from Jan. 1, 2020 to July 2021, the statement said, and is likely to impact more than five million employees and pensioners."
Eurozone PMI plunges to lowest level on record
Oil surges as producers trim output to respond to demand loss
Oil prices have surged today following signs of further supply cuts, but analysts still aren't optimistic about oil prices going forward given poor demand.
Reuters reports: "Oil surged on Thursday amid signs that producers are cutting production to weather a collapse in demand as the coronavirus outbreak ravages world economies, while the U.S. state of Oklahoma also moved to help oil firms pump less.
Analysts warned the rise could be temporary as storage tanks fill around the world, but prices recovered ground as investors reassessed the resiliance of the world's economy amid the global health emergency.
Brent crude was up 99 cents, or 15%, at $21.36 a barrel by 0506 GMT after rising more than 5% on Wednesday.
U.S. West Texas Intermediate (WTI) futures were up 98 cents, or more than 7%, at $14.76 a barrel, having risen around a fifth in the previous session. U.S. crude futures fell to below minus $40 on Monday on concerns that buyers were running out of storage space to take deliveries.
“As long as we have that inventory overhang in the market it is going to be difficult for crude prices to rally sustainably,” said Lachlan Shaw, head of commodities research at National Australia Bank in Melbourne."
Housing sales falls 26% in Jan-Mar in 9 top cities, new supply plunges 51%
The lockdown has had a devastating impact on the real estate sector with both demand and new supply plunging.
PTI reports: "Real estate developers sold 26 per cent less apartments during January-March period across nine major cities as economic slowdown and coronavirus outbreak affected demand, News Corp-backed PropTiger said.
In its report ‘Real Insight: Q4 FY20’, the housing brokerage firm said “a total of 69,235 units were sold during the quarter ending March as against 93,936 units sold during the same quarter last fiscal.”
New launches too fell by more than a half to 35,668 units from 72,932 flats during the period under review.
Reports by other brokerages and consultants too pointed out that sales have been hit by 30-40 per cent in the first three months of 2020.
“The adverse impact of the coronavirus is visible on housing sales in the last quarter of the previous fiscal because March is usually one of the biggest months for sales, said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and PropTiger.com."
Lockdown puts India in similar position that led to US oil WTI crash
With very little domestic demand for the output of oil refiners, could India be staring at a sharp crash in wholesale fuel prices?
IANS reports: "India is staring at a WTI moment with refiners flooding the market with petroleum products that has not enough takers in the absence of demand in the present lockdown and storage facilities reaching their capacity.
Officials in state run oil marketing companies said that with demand for petroleum products, primarily petrol and diesel, shrinking by almost 60 per cent in the first half of April on COVID-19 related lockdown and projections that overall product demand will be over 30 per cent lower in the first quarter of FY21, they were left with no option to cut production with refinery run almost dipping by 50 per cent now.
To add to the problem is almost full storage capacity at fuel stations and at sites created by refiners. Analysts estimate that almost entire 85 million barrel storage capacity with the state-run companies is full. This means that if the production continues at normal pace, products would either have to be disposed off to whosoever wants it at whatever prices or stored at floating or leased storage abroad at high cost.
“We are in similar position to what led to collapse of WTI crude by more than 300 per cent to negative $37 a barrel on Monday. Since that price is not an option with us, the only thing that can be done is to cut production, which has already started at several of the refineries,” said the official of the oil company quoted earlier."
China plans to boost state reserves with US crops amid coronavirus
China is adding more commodities to its strategic reserve to safeguard supplies as well as make good on its commitment to purchase American goods.
Reuters reports: "China is preparing to buy more than 30 million tonnes of crops for state stockpiles to help protect itself from supply chain disruptions due to the coronavirus pandemic and make good on pledges to buy more U.S. crops, three sources told Reuters.
China plans to add about 10 million tonnes of soybeans, 20 million tonnes of corn, and 1 million tonnes of cotton to its state reserves, said two of the sources who were briefed on the government plan.
The bulk of the crops would be imports, and mainly from the United States, as China works to fulfil its commitment under the Phase 1 trade deal signed in January, the sources said.
“The main message from (Beijing) is to secure people's livelihood. It is a good time to build up reserves, especially when prices of the goods are at quite low levels,” said one of the sources."
Vodafone Group makes about ₹1,530 crore accelerated payment to Vodafone-Idea
British telecom giant Vodafone PLC on Wednesday said it has advanced infusion of $200 million (about ₹1,530 crore) in its Indian joint venture with Aditya Birla Group, that is facing a humongous liability of past statutory dues.
The amount is relatively small when seen in the context of over ₹58,000 crore liability that the cash-strapped Vodafone-Idea Ltd faces just on account of past statutory dues as a fallout of a Supreme Court decision .
Vodafone Group, in a statement, said it has “accelerated this payment to provide Vodafone Idea with liquidity to manage its operations, and to support the approximately 300 million Indian citizens who are Vodafone Idea customers as well as the thousands of Vodafone Idea employees during this phase of emergency health measures, taken as a result of the COVID-19 pandemic .”
Vodafone Idea shares jump 15% after Rs 1,530 crore accelerated payment
Vodafone-Idea investors are enthused by news of fresh investment by the Vodafone Group in its Indian subsidiary, which has been at the edge of closing operations.
PTI reports: "Shares of Vodafone Idea Ltd on Thursday jumped nearly 15 per cent after British telecom giant Vodafone Plc said it has advanced infusion of USD 200 million (about Rs 1,530 crore) in its Indian joint venture with Aditya Birla Group, that is facing a humongous liability of past statutory dues.
The scrip advanced 14.89 per cent to Rs 4.55 on the BSE.
At the National Stock Exchange, it climbed 13.92 per cent to Rs 4.50.
Vodafone Group, in a statement, said it has “accelerated this payment to provide Vodafone Idea with liquidity to manage its operations, and to support approximately 300 million Indian citizens who are Vodafone Idea customers as well as the thousands of Vodafone Idea employees during this phase of emergency health measures, taken as a result of the COVID-19 pandemic.”
“Vodafone Group announces that it has accelerated a payment of USD 200 million to Vodafone Idea, which was due in September 2020 under the terms of the contingent liability mechanism with Vodafone Idea,” the statement said."
Fitch Ratings sees India growth slipping to 0.8% in FY21
One more drastic cut in growth forecast for FY21, although this one projects a sharp rebound the next year.
PTI reports: "Fitch Ratings on Thursday slashed India’s economic growth projections to 0.8 per cent in the current 2020-21 fiscal saying an unparalleled global recession was underway due to disruptions caused by the outbreak of coronavirus pandemic and resultant lockdowns.
In its Global Economic Outlook, Fitch Ratings said India’s gross domestic product (GDP) growth will slip to 0.8 per cent for the year April 2020 to March 2021 (FY21) as compared to an estimated 4.9 per cent growth in the previous fiscal.
Growth is, however, expected to rebound to 6.7 per cent in 2021-22.
The rating agency predicted two consecutive quarters of contraction or negative year-on-year growth in current fiscal -- (-)0.2 per cent in April-June and (-)0.1 per cent in July-September. This compares to 4.4 per cent estimated growth in January-March.
Growth is expected to rebound to 1.4 per cent in the last quarter of 2020 calendar year.
Fitch said the slump in FY21 growth was mainly due to a projected fall in consumer spending to just 0.3 per cent in FY21 from 5.5 per cent a year back and a 3.5 per cent contraction in fixed investment."
Rupee rises 48 paise to 76.20 against US dollar in early trade
An update on the rupee, which has made some gains since hitting all-time lows against the US dollar earlier this week.
PTI reports: "The Indian rupee appreciated by 48 paise to 76.20 against the US dollar in early trade on Thursday tracking positive opening in domestic equities and rebound in most Asian currencies.
Forex traders said higher opening of domestic equities supported the local unit, while sustained foreign fund outflows and concerns over coronavirus outbreak weighed on the currency.
At the interbank foreign exchange, the rupee opened at 76.31, then gained ground and touched 76.20, registering a rise of 48 paise over its previous close.
On Wednesday, rupee had settled at 76.68 against the US dollar.
“Rupee could likely be quoted at around 76.50-76.55 per dollar in early trades on Thursday,” Reliance Securities said in a research note.
Meanwhile, the dollar index, which gauges the greenback’s strength against the basket of six currencies, was trading 0.02 per cent up at 100.40."
Traders smell back-door funding of govt debt by the RBI
Indian refineries scale back output as virus chokes demand
The historic drop in demand for petrol and other domestic fuels has pushed refiners to scale back production.
Reuters reports: "India's crude processing in March fell 5.7% from a year earlier, its biggest drop since September, as the coronavirus crisis and travel restrictions to curb its spread dented fuel demand and forced refineries to cut output.
Refiners processed about 21.20 million tonnes, or 5.01 million barrels per day (bpd), of oil last month, provisional government data showed on Wednesday. That was lower than the 5.32 million bpd processed in February and in March 2019.
Crude production also declined 5.5% in March from a year earlier to around 2.70 million tonnes or 0.64 million bpd. Many refineries have curbed output with fuel demand hammered by travel restrictions as the pandemic forced people to stay home and stalled economic activity.
Indian state retailers sold 50% less refined fuel in the first two weeks of April than the same period a year ago as the lockdown hit transportation and industrial activity, industry sources said last week.
The International Energy Agency (IEA) in its latest report estimated India's annual fuel consumption - a proxy for oil demand - will decline 5.6% in 2020 to 4.73 million barrels per day (bpd), compared with growth of 2.4% forecast in its March report."
Sensex opens over 250 points higher; Nifty tops 9,200
The benchmark indices have made a positive start to the day in line with gains of nearly 2% seen in US stocks overnight.
PTI reports: "Equity benchmark Sensex opened over 250 points higher on Thursday tracking gains in banking, energy and IT stocks amid positive cues from global markets.
After hitting a high of 31,646.45, the 30-share index was trading 123.31 points or 0.39 per cent higher at 31,502.86.
Similarly, the NSE Nifty advanced 30.40 points, or 0.33 per cent, to 9,217.70.
ONGC was the top gainer in the Sensex pack, surging up to 3 per cent, followed by Tata Steel, ICICI Bank, Kotak Bank, TCS and L&T.
On the other hand, Titan, M&M, Maruti, PowerGrid, Tech Mahindra and HDFC Bank were among the laggards.
In the previous session, the BSE barometer ended 742.84 points or 2.42 per cent higher at 31,379.55, while the Nifty surged 205.85 points, or 2.29 per cent, to finish at 9,187.30."
Deposits in Jan Dhan accounts surge in 1st week of April
The deposits in Jan Dhan accounts saw a sudden surge in the first week of April, mainly due to the Central government transferring money into such accounts to help beneficiaries deal with the difficulties during the lockdown. According to official data, the total deposits into the accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY) increased to ₹1.28 lakh crore during the week ended April 8, 2020 as compared to ₹1.20 lakh crore at the end of April 1, 2020.
This is probably the biggest weekly increase in deposits of Jan Dhan accounts witnessed in the recent past.
As per the latest data, the deposits in about 38.12 crore accounts stood at ₹1,27,748.43 crore on April 8, up from ₹1,19,680.86 crore on April 1.
The deposits stood at about ₹1.18 lakh crore on March 25 and ₹1.17 lakh crore on March 4.
More calibrated monetary, fiscal stimulus on the anvil, says Principal Economic Adviser
The principal economic adviser to the government has signalled that the nation-wide lockdown may come to an end sooner rather than later.
PTI reports: "Principal Economic Adviser Sanjeev Sanyal on Wednesday said more calibrated monetary and fiscal stimulus measures are on the anvil to deal with the economic fallout from COVID-19 and the consequent lockdown.
He expressed hope that a significant part of the economy will be functioning, if not everything, by May 3.
International passenger travel would remain shut for a long time, not for weeks but for months, he said citing examples of sectors which will continue to be non-functional.
As far as internal economy is concerned, he said, it will be opened up in phases and efforts would be made to provide a cushion to the sectors hit hard by the lockdown through a series of measures from both fiscal and monetary sides.
Sanyal said the RBI has already announced two stimulus packages and Governor Shaktikanta Das has hinted at more measures in the future depending on requirement.
“We are willing to spend. We will spend a lot. We do have resources particularly on the monetary side but we will also make fiscal resources available...we will get a package sooner rather than later, which is already in preparation...we will do it in a calibrated way,” he said while virtually addressing members of PHD Chamber here."
