The benchmark stock indices, the Nifty and the Sensex, opened the day with significant losses before recovering partially.
Although the indices posted a decent recovery last week, they are still far from their highs and continue to break past their previous high.
In other news, the economic cost of the global lockdown, which has seen as much as 3 billion people affected, continues to rise.
Join us as we follow the top business news through the day.
What is the economic cost of "flattening the curve"?
As governments across the world try to "flatten the curve" to deal with the coronavirus pandemic, a bunch of leading economists, including IMF's Chief Economist Gita Gopinath, have warned about the massive economic cost of such containment efforts.
Rating agencies downgrade growth forecast amid lockdown
A couple of growth estimates have come in today downgrading their forecast for India's growth this year.
The first one comes from Fitch which has adjusted growth only marginally.
PTI reports: "Fitch Solutions on Monday slashed its estimate for India’s GDP growth in the fiscal starting April 1 to 4.6 per cent due to weaker private consumption and contraction in investment amid coronavirus outbreak, costing economies around the globe.
The growth estimate for 2020-21 fiscal (April 2020 to March 2021) compares with a 4.9 per cent forecast in the current 2019-20 that ends on Tuesday."
The second forecast coming from Ind-Ra, however, offers a more gloomy picture.
From PTI : "Domestic credit rating agency India Ratings (Ind-Ra) on Monday cut its FY21 growth forecast to 3.6 per cent amid coronavirus-related worries.
It has assumed that a full or partial lockdown will continue till end of April and economic activities will be gradually restored only after May."
Stocks crash over 4%
The benchmark stock indices crashed in the afternoon session today as they witnessed heavy selling amid concerns over the economic impact of the lockdown imposed to control the coronavirus pandemic.
The Sensex lost over 1,350 points while the Nifty closed below 8,300. Both indices have struggled to end the recent downtrend in their movement by breaking above their most recent high.
A measure of volatility via prism of markets
What is India VIX?
India VIX is an index that serves as a measure of market expectation of volatility in the near term. Simply put, while volatility signifies the rate and magnitude of change in the stock price or index value, the movement in the VIX index reflects the overall market volatility expectations over the next 30 days. So, a spike in the VIX value means the market is expecting higher volatility in the near future.
Oil plunges to 2002 lows
Oil has taken another serious beating today, crashing over 8% as demand concerns mount amid the global coronavirus pandemic.
Reuters reports on the fall: "Oil took another eyewatering 8% tumble on Monday and world shares buckled again as fears mounted that the global coronavirus shutdown could last for months.
The rout in oil took crude to its lowest since 2002. Brent was at only $22 a barrel by 0815 GMT, hammering petro currencies such as Russia's rouble, Mexico's peso and the Indonesian rupiah by as much as 2%.
Oil prices have been hit by a fight for market share between Saudi Arabia and Russia, with neither showing signs of backing down even as global transport restrictions hammer demand."
Vegetable oil demand set to fall as restaurants shut down
With restaurants across India shutting down to comply with the lockdown imposed by the government last week, the demand for vegetable oil used by restaurants is set to drop for the first time in more than two decades.
Reuters reports: "Demand for vegetable oil in India is poised to fall for the first time in decades as restaurants have pulled down their shutters to comply with a government order that imposed a 21-day nationwide lockdown to stem the spread of the coronavirus.
Edible oil consumption in India, the world's biggest importer of the cooking medium, trebled over the past two decades as the population grew, incomes rose, and restaurants sprang up to cater to a crowd that started eating out more often.
Most trade and industry officials now agree that India's vegetable oil demand - predominantly palm oil and soyoil - will fall below previous year's 23 million tonnes.
The country's consumption would drop by at least a quarter during the lockdown that began last Tuesday, some dealers said."
Transunion Cibil says data reporting to be in line with moratorium guidelines
After the RBI last week allowed banks to offer a 3-month moratorium on the payment of all term loans, there were questions raised about whether non-payment of EMIs would affect credit scores.
Transunion Cibil has offered some clarity on the matter.
PTI reports: "Credit information company Transunion Cibil on Monday assured borrowers that data reporting will be aligned to RBI’s moratorium announcement and there will not be any dent to credit histories as a result of it.
The move came after the RBI announcement of a 3-month moratorium for servicing all the term loans as a measure to contain the economic fallout due to the lockdown to contain coronavirus spread.
“We would work closely with our member banks and credit institutions to define the data reporting framework basis (after) the announcements made by the RBI Governor, so that during the moratorium period there is no adverse impact on the credit histories and CIBIL Score of borrowers,” the company said in a statement."
TRAI to telcos: Extend prepaid validity so users get uninterrupted services during lockdown
Sector regulator TRAI has asked telecom operators to extend the validity period of prepaid users to ensure that subscribers get uninterrupted services during the 21-day nationwide lockdown .
Telecom Regulatory Authority of India (TRAI) has also sought details of the steps being taken to ensure availability of uninterrupted telecom services to such customers on a “priority basis“.
”...you are required to take necessary steps as deemed fit including extending the validity period to ensure that all prepaid subscribers can enjoy uninterrupted services during the period of lockdown,” TRAI said in a communication to all operators on Sunday.
China delivers surprise monetary stimulus to boost economy
At a time when official numbers coming out of China suggest a fall in the intensity of the coronavirus pandemic, Chinese authorities have stepped up stimulus measures to meet growth targets.
Edited excerpts from a Reuters news report: "China's central bank unexpectedly cut the rate on reverse repurchase agreements by 20 basis points on Monday, the largest in nearly five years, as authorities stepped up measures to relieve pressure on an economy ravaged by coronavirus pandemic.
The People's Bank of China (PBOC) said on its website that it was lowering the 7-day reverse repo rate to 2.20% from 2.40%.
In a note to clients, Capital Economics said “a lot more easing will be needed, especially on the fiscal front, to help the economy return to its pre-virus trend.”
Analysts expect China's economy to contract sharply in the first quarter due to widespread disruptions to business and consumer activity caused by the virus as authorities put in place tough public measures to contain the pandemic."
Home cooking during lockdown pushes up LPG demand
With people who stay indoors during the lockdown having no option but to cook their own food, the demand for cooking gas has witnessed a sudden surge.
IANS reports on the development: "The demand for cooking gas in the country surged in March as people are cooking more at home while remaining indoors during the 21-day nationwide lockdown.
In the month of March, when sale of auto fuels petrol and diesel and even aviation turbine fuel (ATF) has fallen by upto 15—20 per cent, oil companies are witnessing a surge in demand for LPG cooking gas cylinders that has risen by almost the same margin.
The situation has changed so quickly that IndianOil chairman was forced to issue a statement suggesting that there was no shortage of LPG in the country and customers should refrain from panic buying."
Are there economic benefits to working from home?
COVID-19: EPF scheme members can now withdraw non-refundable advance
The Union Labour and Employment Ministry said on Sunday that it had notified an amendment to the Employees’ Provident Scheme (EPF) allowing members to withdraw non-refundable advance amounts in the wake of the COVID-19 pandemic .
As announced by Finance Minister Nirmala Sitharaman on March 26 , the Ministry notified the amendment on March 27, making it effective from March 28.
“The notification permits withdrawal not exceeding the basic wages and dearness allowance for three months or up to 75% of the amount standing to member’s credit in the EPF account in the event of outbreak of epidemic or pandemic,” a statement from the Ministry said.
Oil price hits 17-year low
It's a double whammy for oil as the coronavirus pandemic severely hits demand for the commodity at a time when producers have already been engaged in a price war.
PTI reports: "Oil prices extended losses in Asian trade Monday and languished at 17-year lows, with the coronavirus crisis escalating around the world and no end in sight to a vicious price war.
US benchmark West Texas Intermediate fell 5.3 percent to trade at $20 a barrel, while international benchmark Brent crude was off 6.5 percent at $23.
Oil markets have been plunging for weeks as lockdowns and travel restrictions imposed by governments worldwide to fight the virus strangle demand.
Even as demand falls, supply has increased dramatically after top producers Saudi Arabia and Russia engage in a price war following a row about whether to cut output to support prices.
At the end of last week, Riyadh said it had not been in touch with Moscow about potential output cuts while Russia’s deputy energy minister said oil at $25 a barrel was not a catastrophe for the country’s producers -- signalling the two sides are still far apart."
Stock market update: Nifty, Sensex recover some losses after lockdown relief
Ashish Rukhaiyar reports from Mumbai:
Indian equities traded weak on Monday though pared the early losses partially after the government said that there were no plans to extend the lockdown.
The 30-share Sensex, which fell over 1,100 points to touch a low of 28,709 in the first few minutes of the session, was trading at 29,121, down 695 points or 2.33% at 10:15 AM. The broader Nifty was at 8,475, down 186 points or 2.14%. The India VIX registered a marginal jump of nearly 2% in the morning session.
Almost all of the Asian markets were also trading in the red adding to investor pessimism as the number of coronavirus cases have been rapidly rising in the US.
Back in India, the overall market breadth was skewed towards declines as around 1,000 stocks fell as against less than 600 gainers.
Rupee weakens past 75/USD mark in early trade
As usual, the weakness in the domestic stock market has weighed on the rupee which has weakened past the 75/USD mark this morning.
PTI reports: "The Indian fell 32 paise to 75.21 against the US dollar in opening trade on Monday, as investors braced for a prolonged period of uncertainty as coronavirus-induced lockdowns tightened across the world and in India.
Forex traders said weak opening in domestic equities dragged the local unit amid mounting fears of a coronavirus-led economic slowdown.
The rupee opened weak at 75.17 at the interbank forex market and then fell further to 75.21, down 32 paise over its last close.
The rupee had settled at 74.89 against the US dollar on Friday."
Policies for pandemics
The world is cowering under the COVID19 threat. Let’s take a look at the insurance cover is available for those who get infected.
The first question that comes to mind is: will my hospitalisation policy pay for a COVID-19-related hospitalisation and treatment?
The answer seems clear, up to a point. Existing policies should cover hospitalisation unless specifically excluded or if epidemics and pandemics are excluded. Read your policy document for clarity. If neither is the case, we can conclude that coverage is available.
Stocks open with significant losses
The benchmark stock indices have opened this morning with significant losses of over 3%
The Sensex is down over 900 points while the Nifty is trading below the 8,400 mark.
Last week saw stocks stage a decent recovery from the massive fall earlier this month owing to serious economic concerns surrounding the coronavirus pandemic.
The IMF last week stated that the world is in a recession far worse than the recession that followed the 2008 global financial crisis.
On Friday, the Dow Jones index lost over 4%
