The benchmark stock indices opened the day on a negative note as rising coronavirus cases increased fears of a fresh lockdown.
Join us as we follow the top business news through the day.
Japan's central bank kicks off experiments on issuing digital currency
The Bank of Japan (BOJ) began experiments on Monday to study the feasibility of issuing its own digital currency, joining efforts by other central banks that are aiming to match the innovation in the field achieved by the private sector.
The first phase of experiments, to be carried out until March 2022, will focus on testing the technical feasibility of issuing, distributing and redeeming a central bank digital currency (CBDC), the BOJ said in a statement.
The BOJ will thereafter move to the second phase of experiments that will scrutinise more detailed functions, such as whether to set limits on the amount of CBDC each entity can hold.
If necessary, the central bank will launch a pilot programme that involves payment service providers and end users, BOJ Executive Director Shinichi Uchida said last month.
Sensex tumbles 871 points; Nifty tanks below 14,650
A forgettable day for stock bulls.
PTI reports: "Equity benchmark Sensex tanked 871 points on Monday, dragged by a selloff in financial stocks as spiking COVID-19 cases spooked investors and fanned concerns over economic recovery.
After plunging over 1,400 points earlier in the day, the 30-share BSE index pared some losses to finish at 49,159.32, down 870.51 points or 1.74 per cent. Similarly, the broader NSE Nifty sank 229.55 points or 1.54 per cent to 14,637.80.
Bajaj Finance was the top laggard in the Sensex pack, plunging around 6 per cent, followed by IndusInd Bank, SBI, M&M, Axis Bank, Bajaj Auto and ICICI Bank.
On the other hand, HCL Tech, TCS and Infosys were among the gainers.
"The market witnessed a huge sell-off today as India's second wave of COVID-19 is getting bigger than anticipated and is expected to ruin the pace of economic recovery. High valuation added further concern due to a possible downgrade in Q1FY22 earnings," said Vinod Nair, Head of Research at Geojit Financial Services.
A policy decision in the upcoming MPC announcement and Q4 earnings will define the market volatility in the coming days, he added.
The rise in COVID-19 cases in India is a sobering reminder that challenges to recovery still remain, said Lalitabh Srivastava, AVP research, Sharekhan by BNP Paribas.
The provisional numbers of key banks indicate a consolidating trend in terms of advances growth but encouraging performance on deposit and CASA front, he added.
Elsewhere in Asia, bourses in Seoul and Tokyo ended on a positive note. Markets in Shanghai, Hong Kong and Australia were closed for holidays.
Stock exchanges in Europe were also closed.
Meanwhile, the global oil benchmark Brent crude was trading 2.20 per cent lower at USD 63.43 per barrel."
Personal details of 533 million Facebook users leaked online
More privacy concerns hit the tech giant.
PTI reports: "Personal details of about 533 million Facebook users globally, including 6.1 million from India, were allegedly leaked online and posted for free on hacking forums, according to a cybersecurity executive.
The leaked details allegedly include names, phone numbers and other details of users of Facebook, a social media giant that had 2.80 billion monthly active users (MUAs) as of December 31, 2020.
"All 533,000,000 Facebook records were just leaked for free. This means that if you have a Facebook account, it is extremely likely the phone number used for the account was leaked," Alon Gal, co-founder and chief technical officer of cybersecurity firm Hudson Rock, has said in a tweet flagging the issue.
A list of countries that was shared in the tweet, showed that information of 6.1 million users from India, 32.3 million from the US, 11.5 million from the UK and 7.3 million from Australia, was part of the leaked data.
When contacted, a Facebook company spokesperson said: "This is old data that was previously reported on in 2019. We found and fixed this issue in August 2019".
Gal said in early 2020, a vulnerability - which enabled seeing the phone number linked to every Facebook account - was exploited, creating a database containing the information of 533 million users across all countries.
He added that details include phone number, Facebook ID and full name and "bad actors will certainly use the information for social engineering, scamming, hacking and marketing".
In the past too, Facebook has faced challenges around data security. In March 2018, Facebook data of over 5.62 lakh Indians was allegedly compromised as UK-based Cambridge Analytica had accessed information of about 87 million users globally.
India is among the biggest markets for Facebook and its group companies, WhatsApp and Instagram. According to government data, India has 53 crore WhatsApp users, 41 crore Facebook users, and 21 crore users of Instagram."
Sebi's framework to curb stock market spoofing kicks off
SEBI's new market regulations kick in.
PTI reports: "The new framework to curb instances of stock market spoofing kicked off on Monday, whereby serial offenders could face trading disablement of 15 minutes to two hours.
In spoofing, traders place a large number of buy or sell orders, with an intent to cancel before those orders can be executed.
Market experts say that excessive cancellations of large orders lead to manipulative increases or decrease in prices, which impacts retail investors.
"Sebi and exchanges in a joint meeting have decided that, in order to further strengthen the order level surveillance mechanism, there shall be an additional order based surveillance measure to deter persistent noise creators i.e. excessive order modifications/ cancellations with an intent to avoid execution," BSE and NSE had said in circulars last month.
The new measure will be applicable on the daily trading activity at the client as well as the broker levels.
The exchanges have noted three activities -- high order to trade ratio, high instances of order modifications and persistent deferred or lower order execution priority due to frequent modifications-- that will be monitored to curb such practices.
If the surveillance system detects instances based on these three activities, it will be considered 'one instant count'.
Based on count of instances over a period of 20 trading days, exchanges will determine penal actions.
If the number of instances crosses 99 on a rolling 20 trading days basis, the trading account will be disabled for the first 15 minutes of the next trading day. Any additional instance will lead to a longer disablement of a trading account subject to a maximum of 2 hours.
The surveillance measure will be effective from April 5 and the first action on such persistent noise creators will be on May 5 based on 20 trading days window.
Also, trading behaviour of entities creating undesirable noise in the market will be monitored.
Even if these parameters are not fully met, if any entity is found to be repeatedly modifying and cancelling orders which do not result in execution and creates undesirable noise in the system will also liable for action, the circulars noted."
Are you retirement-ready?
Are you nearing retirement or aiming for an early retirement? If so, are you retirement-ready? In this article, we discuss why it is important for you to address your emotional readiness in addition to your financial readiness for a comfortable retirement.
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Govt amends insolvency law; introduces pre-packaged resolution process for MSMEs
Centre tries to build on its reform momentum.
PTI reports: "The government has amended the insolvency law to provide for a pre-packaged resolution process for micro, small and medium enterprises.
An ordinance was promulgated to amend the Insolvency and Bankruptcy Code (IBC) on April 4, according to a notification.
The latest move comes less than two weeks after the suspension of certain IBC provisions ended. The suspension -- wherein fresh insolvency proceedings were not allowed for a year starting from March 25, 2020 -- was implemented amid the coronavirus pandemic disrupting economic activities.
As per the ordinance, it is considered necessary to urgently address the specific requirements of Micro, Small and Medium Enterprises (MSMEs) relating to the resolution of their insolvency, due to the unique nature of their businesses and simpler corporate structures.
According to the ordinance, it is considered expedient to provide an efficient alternative insolvency resolution process MSMEs to ensure a quicker, cost-effective and value maximising outcomes for all stakeholders, in a manner which is least disruptive to the continuity of their businesses and which preserves jobs.
"... in order to achieve these objectives, it is considered expedient to introduce a pre-packaged insolvency resolution process for corporate persons classified as micro, small and medium enterprises," it added.
Soumitra Majumdar, Partner at J Sagar Associates, said the IBC Amendment Ordinance 2021, makes available the pre-packaged route to genuine and viable cases, to ensure least business disruption.
"While modelled on debtor-in-possession approach, it vests significant consent rights to the financial creditors, such that the mechanism cannot be mis-used by errant promoters.
"Further, adopting the plan evaluation process akin to Swiss Challenge, it retains competitive tension such that promoters propose plans with least impairment to rights and claims of creditors," Majumdar noted.
IBC provides for a market-linked and time-bound resolution of stressed assets."
SBI hikes home loan rate to 6.95%
Country’s largest lender State Bank of India (SBI) has revised its home loan rate to 6.95% effective April 1.
With the revision, the lowest rate of 6.70% regime for limited period ended in March 31.
During the limited period, the bank offered home loan starting from 6.70% for loans up to ₹75 lakh and 6.75% for loans in the range of ₹75 lakh-₹5 crore.
As per information posted on its website, the new rate effective April 1 is 6.95%.
Compared to teaser rate for the limited period, the new rate is 25 basis points higher at 6.95%.
The hike in minimum home loan rate by SBI is likely to prompt other lenders to follow suit.
Investors' wealth tumbles over Rs 4.54 lakh crore as markets crash
Today's erosion to investor wealth.
PTI reports: "Investors' wealth tumbled over Rs 4.54 lakh crore in morning trade on Monday as markets crashed amid a sharp spike in coronavirus cases in the country.
The 30-share BSE benchmark index plummeted 1,449.03 points to 48,580.80 in morning trade.
Following this, the market capitalisation of BSE-listed companies dived Rs 4,54,987.72 crore to Rs 2,02,71,414.07 crore.
From the 30-share pack, 27 companies were trading lower led by banking companies -- IndusInd Bank, Bajaj Finance, Bajaj Finserv, State Bank of India, Axis Bank and HDFC.
"The fundamental factors influencing markets are changing fast. There are both positives and negatives. ... the fast-rising COVID cases is a cause of concern. Restriction of economic activity in many areas might impact growth recovery. But, as of now, there are no signs of a slowdown in the economy," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Coronavirus cases in India hit a record daily high since the the outbreak of the pandemic with 1,03,558 new infections pushing the nationwide COVID-19 tally to 1,25,89,067, according to the Union Health Ministry data updated on Monday.
The BSE midcap index and small cap index were trading over 2 per cent lower.
Equity markets were closed on April 2, for 'Good Friday'."
Sensex plummets over 1,400 points in morning trade; financial stocks tank
A mid-day review of markets.
PTI reports: "Equity benchmark Sensex tumbled over 1,400 points in the morning session on Monday, dragged by massive losses in financial stocks amid concerns over spiking COVID-19 cases in the country.
After touching a low of 48,580.80, the 30-share BSE index was trading 1,254.49 points or 2.51 per cent lower at 48,775.34, and the broader NSE Nifty sank 349.40 points or 2.35 per cent to 14,517.95.
IndusInd Bank was the top laggard in the Sensex pack, tanking over 6 per cent, followed by Bajaj Finance, Axis Bank, SBI, Bajaj Auto, Bajaj Finserv, ICICI Bank, HDFC twins and Reliance Industries.
On the other hand, Infosys, HCL Tech, TCS and Infosys were the gainers.
Markets opened gap down following strict guidelines issued in Maharashtra amidst rising coronavirus cases with financial and rate-sensitive stocks taking indices down close to 2.5 per cent, said S Ranganathan, Head of Research at LKP Securities.
According to Binod Modi, Head - Strategy at Reliance Securities, banks, which started seeing steady improvement in asset quality and improvement in credit costs, may see further delay in credit cycle recovery and pressure in asset quality if business restrictions are imposed by more number of states due to steep rise in COVID-19 cases.
Elsewhere in Asia, bourses in Seoul and Tokyo were trading on a positive note in mid-session deals. Markets in Shanghai, Hong Kong and Australia were closed for holidays.
Meanwhile, the global oil benchmark Brent crude was trading 1.46 per cent lower at USD 63.91 per barrel.
On the currency front, the India rupee was trading 29 paise lower against the US dollar at 73.41."
Rupee slumps 31 paise to 73.43 against U.S. dollar in early trade amid concerns over rising COVID-19 cases
The Indian rupee slumped 31 paise to 73.43 against the U.S. dollar in opening trade on April 5 amid concerns over rising COVID-19 cases.
Besides, losses in domestic equity markets also weighed on investors’ sentiment.
At the interbank forex market, the domestic unit opened at 73.38 against the U.S. dollar, then fell further to 73.43, registering a decline of 31 paise over its previous close.
On April 1, the rupee had settled at 73.12 against the American currency. The forex market was closed on April 2, on account of Good Friday.
The Indian rupee started weak on April 5 and may weaken further against the dollar on concerns over India’s economic outlook following a further increase in coronavirus infections, Reliance Securities said in a research note.
A family that plans together stays together
“As a family, we decide jointly our financial goals and how to achieve them,” says Radhika Desai, a homemaker from Thane. “Ever since it has been made a family activity, everyone is enjoying. They feel committed and want to participate. There is much more enjoyment in the entire exercise,” Ms. Desai adds.
Done jointly, there is a feeling of commitment and also empowerment. Everyone has a say in it. Take the views of children. Let them feel involved. This is a life skill.
During one of my quarterly reviews, with the permission of my clients Jahanvi and Rohit, I allowed my young daughter to join us.
India's factory activity slows to 7-mth low on renewed COVID-19 lockdowns
Lockdown fears drag back factories.
Reuters reports: "India's factory activity grew at its weakest pace in seven months in March as renewed lockdowns to curtail a resurgence in COVID-19 cases dampened domestic demand and output, a private survey showed, forcing firms to cut headcount again.
Last week, the Indian government advised federal states to try and control the rapid spread of the virus. Tighter restrictions on activity suggest factories could be in for a tough April.
The Nikkei Manufacturing Purchasing Managers' Index , compiled by IHS Markit, declined to a seven-month low of 55.4 last month from February's 57.5, but remained above the 50-level separating growth from contraction for an eighth straight month.
Despite foreign orders growing at a faster pace in March, a sub-index tracking overall demand declined to its lowest since August 2020. Output also grew at its weakest pace in seven months.
"Survey participants indicated that demand growth was constrained by the escalation of the COVID-19 pandemic, while the rise in input buying was curtailed by an intensification of cost pressures," said Pollyanna De Lima, economics associate director at IHS Markit.
"With COVID-19 restrictions expanded and lockdown measures re-introduced in many states, Indian manufacturers look set to experience a challenging month in April."
Although Asia's third-largest economy was predicted to grow at a faster pace this fiscal year than previously thought, according to a Reuters poll published last week, a significant majority of economists said a surge in coronavirus cases was the biggest risk to the outlook.
After a year-long spree of job cuts, factories intensified the rate of layoffs to its strongest in six months in March.
Both input and output prices increased at a slower pace last month, signalling overall inflation that accelerated to a three-month high in February might ease and stay within the Reserve Bank of India's inflation target of 2-6%.
That would help the central bank maintain its accommodative policy stance to support economic growth but optimism about the year ahead waned.
"While predictions that the vaccination programme will curb the disease and underpin output growth in the year ahead meant that business confidence remained positive, growing uncertainty over the near-term outlook due to a rise in COVID-19 cases dragged sentiment to a seven-month low," De Lima said."
Indian shares slide as record COVID-19 surge sparks new curbs
Reuters reports: "Indian shares slid on Monday as daily coronavirus infections surpassed 100,000 for the first time, and some states imposed fresh restrictions on outdoor movement, sparking concerns about the pace of the country's economic recovery.
The NSE Nifty 50 index was down 0.66% at 14,770.40 by 0400 GMT, while the S&P BSE Sensex was 0.77% lower at 49,642.46.
India's coronavirus caseload jumped by a record to surpass 12.5 million on Monday, while the death toll crossed 165,000. Maharashtra — home to India's financial capital of Mumbai — imposed stringent curbs including a complete lockdown on weekends.
Private-sector lenders HDFC Bank, HDFC, and ICICI Bank were the biggest drags on the Nifty 50, falling between 1.3% and 2%.
Meanwhile, a media report said state-run lenders may have to bear a burden of up to 20 billion rupees ($273 million) due to a recent court ruling on the waiver of interest on all loan accounts which opted for a moratorium last year."
SC order on interest waiver: PSU Banks may have to take ₹2,000 crore hit
Public sector banks may have to bear a burden of ₹1,800-2,000 crore arising due to a recent Supreme Court judgement on the waiver of compound interest on all loan accounts which opted for moratorium during March-August 2020, sources said.
The judgement covers loans above ₹2 crore as loans below this got blanket interest on interest waiver in November last year. Compound interest support scheme for loan moratorium cost the government ₹5,500 crore during 2020-21 and the scheme covered all borrowers including the prompt one who did not avail moratorium.
According to banking sources, initially 60% of borrowers availed moratorium and gradually the percentage came down to 40% and even less as collection improved with ease in lockdown. In case of corporate, this was as low as 25% as far as public sector banks were concerned.
