Stocks, oil hit by China virus fears, safe havens gain
World shares fell to their lowest in two weeks on Monday as worries grew about the economic impact of China's spreading coronavirus with demand spiking for safe-haven assets such as Japanese yen and Treasury notes.
The death toll from the coronavirus outbreak in China rose to 81 and the virus spread to more than 10 countries, including France, Japan and the United States. Some health experts questioned whether China can contain the epidemic.
The MSCI All-Country World Index, which tracks shares across 47 countries, was down 0.42% to its lowest since Jan. 13.
In Europe, stock markets slumped at the start of trading, tracking their counterparts in Asia. The pan-European STOXX 600 index fell 1.4% to its lowest level since Jan. 14.
Shares of mining companies slumped 3.1%, dragged down by their exposure to China, the biggest decline among the major European subsectors.
“The coronavirus is an economic and financial shock. The extent of that shock still needs to be assessed, but it could provide the spark for an arguably long-overdue adjustment in the capital markets,” Marc Chandler, chief market strategist at Bannockburn Securities, told clients.
In Asia, Japan's Nikkei average slid 2.0%, the biggest one-day fall in five months. A Tokyo-listed China proxy, ChinaAMC CSI 300 index ETF, fell 2.2%. Many markets in Asia were closed for the lunar new year holiday.
U.S. S&P 500 mini futures were last down 0.9%, after falling 1.3% in early Asian trade.
The ability of the coronavirus to spread is getting stronger and infections could continue to rise, China's National Health Commission said on Sunday. Nearly 2,800 people globally have been infected and 81 in China killed by the disease. Reuters
Sensex plummets 458 pts as China virus fears grip markets globally
Benchmark Sensex plunged over 458 points on Monday following intense selloffs in many overseas markets amid fears over the global economic impact of China’s deadly coronavirus.
After tumbling nearly 500 points during the day, the 30-share BSE index settled 458.07 points, or 1.10 per cent, lower at 41,155.12.
Likewise, the broader NSE Nifty closed 129.25 points, or 1.06 per cent, down at 12,119.
Tata Steel was the top loser in the Sensex pack, diving 4.31 per cent, followed by IndusInd Bank, HDFC twins, SBI, PowerGrid and Bharti Airtel.
On the other hand, M&M, UltraTech Cement, Tech Mahindra, ICICI Bank and Axis Bank rose up to 1.63 per cent.
Markets across the world are increasingly turning volatile on concerns over the global economic impact of the coronavirus after China announced sharp increases in the number of people affected in the outbreak, analysts said.Benchmark Sensex plunged over 458 points on Monday following intense selloffs in many overseas markets amid fears over the global economic impact of China’s deadly coronavirus.
After tumbling nearly 500 points during the day, the 30-share BSE index settled 458.07 points, or 1.10 per cent, lower at 41,155.12.
Likewise, the broader NSE Nifty closed 129.25 points, or 1.06 per cent, down at 12,119.
Tata Steel was the top loser in the Sensex pack, diving 4.31 per cent, followed by IndusInd Bank, HDFC twins, SBI, PowerGrid and Bharti Airtel.
On the other hand, M&M, UltraTech Cement, Tech Mahindra, ICICI Bank and Axis Bank rose up to 1.63 per cent.
Markets across the world are increasingly turning volatile on concerns over the global economic impact of the coronavirus after China announced sharp increases in the number of people affected in the outbreak, analysts said. PTI
Gold climbs Rs 133, silver prices jump Rs 238
Gold prices climbed by Rs 133 to Rs 41,292 per 10 gram in the national capital on Monday on weaker rupee, according to HDFC Securities.
The yellow metal had closed at Rs 41,159 per 10 gram in the previous trade.
Likewise, silver prices also jumped Rs 238 to Rs 47,277 per kg from Rs 47,039 per kg in the previous trade.
“Gold prices rallied on risk off sentiments on worsening China corona virus crisis,” HDFC Securities Senior Analyst (Commodities) Tapan Patel said. PTI
India's January palm oil imports from Malaysia could hit 9-yr low - trade
India's monthly palm oil imports from Malaysia could fall to the lowest level in nearly nine years in January as traders stopped buying the tropical oil from Kuala Lumpur following informal instructions from New Delhi, traders and refiners told Reuters.
Lower imports by India, the world's biggest palm oil importer, could weigh on Malaysian prices that have corrected nearly a tenth after hitting a three-year peak earlier this month.
Some traders had been hoping state-run trading firms could buy refined palm oil for the public distribution system by floating tenders, but this does not seem to have materialised.
“No one is buying Malaysia's crude palm oil (CPO) or palmolein for February shipments. There are no open tenders from state agencies yet,” said a Kuala Lumpur-based trader.
India is set to import less than 70,000 tonnes of palm oil from Malaysia in January, the lowest since April 2011 and significantly lower than the 253,889 tonnes it imported in January 2019, traders and refiners said.
In February imports could be negligible at less than 10,000 tonnes as almost every Indian buyer has switched to Indonesia, they said.
“Traders stopped buying from Malaysia after the government gave verbal instructions. This month's shipments are from the contracts signed before the government instructions,” said a Mumbai-based dealer with one global trading firm. Reuters
Saudi Arabia says watching oil market closely regarding China virus
Saudi Arabia is closely monitoring developments in global oil markets resulting from gloomy expectations regarding the possible impact of the coronavirus on the Chinese and global economy, as well as on the oil market's fundamentals, its energy minister said on Monday.
OPEC and its allies can respond to any impact on the stability of the oil market if needed, Prince Abdulaziz bin Salman said, but added that he was confident the Chinese government and international community could contain the spread of the virus and fully eradicate it.
The minister said the current impact on global markets, including oil and other commodities, was primarily driven by psychological factors and extremely negative expectations adopted by some market participants despite its very limited impact on global oil demand.
Crude prices fell more than 2% to multi-month lows on Monday as the rising number of cases of the coronavirus in China and city lockdowns there deepened concerns over oil demand.
Brent crude fell by $1.36 a barrel, or 2.2%, to $59.33 by 0425 GMT, having earlier dropped to $58.68, its lowest since late October. U.S. crude was down by $1.30, or 2.4%, to $52.89, having earlier eased to $52.15, its lowest since early October.
While most markets are being impacted by the spread of the coronavirus, many are closed in Asia due to Lunar New Year holidays. Reuters
UK's FTSE 100 tumbles again as coronavirus fears grow
UK shares slumped on Monday as the coronavirus spread globally and caused more fear with death tolls more than tripling from last week, while midcap constituent payments group Finablr outperformed.
The FTSE 100 index, which had recovered on Friday after the World Health Organisation issued a measured assessment of the virus, stumbled 1.5% by 0808 GMT, set for its worst daily performance since early December.
The midcaps were 1.1% lower, but Finablr helped contain some losses as it jumped 9% after reassuring markets that it had sought clarifications from BRS, an investment vehicle owned by Shetty that pledged over half the company's stock as security against certain debts.
News that China's death toll from the coronavirus discovered at the end of last year has risen to 80 spooked investors and dragged an index of leisure and airline stocks down nearly 2%. The sector is exposed to a slowdown in the travel market because of the outbreak.
Some stock losers include British Airways owner IAG , which dropped 5%, and China-exposed luxury brand Burberry, down 4.8%. Reuters
UDAY not failure; new scheme likely in Budget: R K Singh
Asserting that the UDAY scheme was not a failure Power Minister R K Singh on Monday said an improved version of the programme, meant for revival for discoms, may be announced in the Union Budget later this week.
“We have discussed the new (UDAY) scheme with Finance Ministry. We expect it to find place in the Budget,” Singh said at the sidelines of the listing ceremony of the USD 750-million international bond of Power Finance Corporation (PFC) at NSE.
He also indicated that unlike earlier practice of having multiple schemes, the centre would channelise all efforts through one scheme, and states would have to reduce the losses of discoms to get all the benefits.
Targeting to cut discom losses to below 15 per cent, he said power would be sold on strong financial mechanism and the states would decide on their own subsidies.
“The Ujwal DISCOM Assurance Yojana (UDAY) scheme is not a failure. We have reduced losses of discoms from over 22 per cent to around 18 per cent...,” he stated.
Last year in August the centre had made it mandatory to provide letter of credit for buying power by the discoms. PTI
India needs to re-examine long-term gas pricing with Qatar: Oil Minister
Oil Minister Dharmendra Pradhan said on Monday the country needs to look into the pricing mechanism of existing long term gas supply contracts with Qatar.
He was speaking to a gathering of oil company officials in New Delhi.
India imports 8.5 million tonnes of liquefied natural gas (LNG) annually under a long-term supply deal with Qatar.
Spot prices, or current market prices, of LNG have dropped to multi-year lows in January, highlighting the loss being borne by LNG importing countries tied in long term contracts with suppliers. Reuters
Govt may consider import duty cut on raw material for fertiliser industry in Budget
The government may consider cut in import duty on raw material used in the fertiliser industry in the forthcoming budget with a view to boost domestic manufacturing in the country, sources said.
Lower import duty on raw material like rock phosphate and sulphur used for manufacturing of DAP (Di ammonium phosphate) would help boost domestic production and cut in import bill, according to sources.
Currently, there is an import duty of 5 per cent on such imports and the country imports about 95 per cent of its DAP requirement from global markets. The country also imports about 30 per cent of its urea requirements.
During April-December 2019-20, the country’s crude and manufactured fertiliser imports grew by 8.47 per cent to USD 6.2 billion.
The commerce ministry has suggested its finance counterpart to rationalise basic customs duty on over 300 items to boost domestic manufacturing and cut in the rising import bill. PTI
Asian stocks fall as virus fears spook markets, hit tourism
Shares tumbled Monday in the few Asian markets open as China announced sharp increases in the number of people affected in an outbreak of a potentially deadly virus.
Many regional markets, including China’s, were closed in Asia for Lunar New Year holidays. Australia was closed for Australia Day.
Tokyo’s Nikkei 225 index sank 1.8 per cent to 23,389.49. India’s Sensex lost 0.4 per cent to 41,466.45, while the benchmark in Thailand dropped 2.2 per cent. Indonesia’s share benchmark was 0.8 per cent lower.
China announced it was extending its week-long public holiday by an extra three days as a precaution against having the virus spread still further.
“Traders who would be typically discussing the weekend football results are now sadly focusing on mortality scores this morning,” Stephen Innes of AxiCorp said in a commentary.
Apart from the direct impact on tourism and travel, “any economic shock to China’s colossal industrial and consumption engines will spread rapidly to other countries through the increased trade and financial linkages associated with globalisation,” he said. AP
China extends holiday, businesses shut as virus toll rises to 81
The death toll from a coronavirus outbreak in China rose to 81 on Monday, as the government extended the Lunar New Year holiday and more big businesses shut down or told staff to work from home in an effort to curb the spread.
Chinese Premier Li Keqiang visited the central city of Wuhan, the epicentre of the outbreak, as the government sought to signal it was responding seriously to the crisis.
The total number of confirmed cases in China rose about 30% to 2,744, about half of them in Hubei province, whose capital is Wuhan.
As worries grew around the world, Chinese-ruled Hong Kong, which has had eight confirmed cases, banned entry to people who had visited Hubei in the past 14 days. The ban did not cover Hong Kong residents.
The number of deaths from the flu-like virus in Hubei climbed to 76 from 56, health officials said, with five deaths elsewhere in China, including the southern island province of Hainan, which reported its first fatality on Monday.
Gaming giant Tencent Holdings Ltd advised staff to work from home until Feb. 7, and e-commerce firm Alibaba removed sales of overpriced face masks from its online Taobao marketplace as prices surged. Reuters
Coronavirus outbreak will hit Singapore's economy this year -trade minister
Singapore's economy will be impacted by the outbreak of a new coronavirus that originated in China at the end of last year and has spread to the city-state, its trade minister said on Monday.
The Southeast Asian travel and tourism hub, which recorded its lowest growth rate in a decade last year at 0.7%, has reported four cases of the coronavirus that has killed 80 people in China so far. Reuters
Consumer electronics industry seeks tax relief, incentives in upcoming Budget
The Consumer Electronics and Appliances Manufacturers Association (CEAMA) has urged the government to offer incentives for manufacturers to produce energy-efficient products which will be in line with the government’s focus on sustainability in a pre-budget memorandum.
“Lowering the GST tax slabs for eco-friendly and energy-efficient products like air conditioners (4 star, 5 star models) and refrigerators (direct cool and frost-free) to 12 per cent will drive demand and increase the adoption of sustainable appliances by Indian consumers,” said CEAMA President Kamal Nandi.
Finance Minister Nirmala Sitharaman is scheduled to present the Budget for financial year 2020-21 on February 1.
According to CEAMA, the industry has largely been stagnant this year and with increased customs duties, global economic changes and fluctuations in currency and commodity, the demand levels for next year are difficult to predict.
Indian component suppliers are facing difficulty in competing with cheap Chinese imports, it said. PTI
Govt. invites bids for 100% stake sale in Air India
The government on Monday invited Expression of Interest for 100% stake sale in the national carrier Air India (AI) .
Along with AI, it has also invited interest from bidders for its entire 100% stake in low-cost international arm Air India Express and its complete 50% share of ground handling subsidiary AISATS.
The total debt of Air India and Air India Express to be taken on by the new buyer is ₹23,286 crore. The actual debt of the two entities combined was ₹ 60,074 crore. The balance of nearly ₹27,000 crore has been absorbed by the government.
This is the second time in less than two years the government has proposed the sale of AI.
Rupee slips 18 paise to 71.51 against US dollar in early trade
The rupee opened on a weak note and declined by 18 paise to 71.51 against the US dollar in opening trade on Monday, tracking weak opening in domestic equities and strengthening of the American currency overseas.
Forex traders said weak opening in domestic equities dragged the local unit, while easing crude prices and foreign fund inflows supported the rupee and restricted the downfall.
The rupee opened weak at 71.51 at the interbank forex market, down 18 paise over its previous close.
The domestic currency however, gained some lost ground and was quoted at 71.44 against US dollar at 1002 hrs. PTI
9:50 AM
Sensex drops over 250 pts; Nifty below 12,200
Market benchmark Sensex tumbled over 250 points in opening session on Monday tracking losses in index-heavyweights HDFC duo, Kotak Bank and Reliance Industries amid weak global cues.
The 30-share BSE index was trading 240.72 points or 0.58 per cent lower at 41,372.47. Similarly, the broader NSE was trading 76.70 points, or 0.63 per cent, down at 12,171.55.
Top losers in the Sensex pack included Tata Steel, Kotak Bank, HDFC twins, Hero Motocorp, SBI and Tech Mahindra.
On the other hand, UltraTech Cement, ICICI Bank, M&M, Titan and NTPC were trading on a positive note.
According to analysts, global investors increasingly turned nervous as fears over the global economic impact of the deadly China virus extended last week’s selloff. PTI
