BQuick On March 13: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Wild Ride For Indian Markets As Investors Lose Rs 15 Lakh In A Week
Indian stocks posted their biggest advance since September on a day when losses of 10 percent set off a market-wide circuit breaker, the nation’s first such suspension since 2009.
- The S&P BSE Sensex rallied 4 percent to 34,130.5 at the close, erasing losses of as much as 10.3 percent that led to the 45-minute trading halt.
- The NSE Nifty 50 recovered 1,500 points from the lowest point of the day.
- The index ended with gains of 3.81 percent at 9,955.
- The 50-stock index was down 9.41 percent for the week.
- The Indian rupee also recovered from an all-time low to close 0.4 percent higher at 73.91 against the dollar.
Follow the day’s trading action here.
Indian equities, having tumbled the most in at least a decade this week tracking global coronavirus selloff, maybe just a “handshake away” from a bottom and investors should consider buying, according to Morgan Stanley’s Ridham Desai.
- “My view is that in a year we will be a lot higher than where we are today. So this may not be a bad time to start putting cash to work,” he told BloombergQuint in an interview.
- This, however, has to be done with a clear understanding that the next one month could be “pretty bad”, he said, suggesting that investors shouldn’t go all in.
See what Desai had to say about bottom fishing stocks during such volatility.
U.S. Stocks Rebound On Hopes For Policy Responses
U.S. stocks rebounded from the worst day since 1987 amid signs policy makers around the world are taking action to stave off the economic fallout from the coronavirus.
- The S&P 500 traded about 5 percent higher after plunging 9.5 percent on Thursday in the biggest rout since 1987 and fifth-worst on record.
- European equities also advanced, the dollar strengthened and stress in the credit markets showed some signs of easing.
- West Texas Intermediate crude rose 4.2 percent to $32.81 a barrel.
- After days of no or inadequate action, policy prescriptions came fast Friday, with reports Congress is near a deal on a relief bill.
- The European Union prepared to suspend government spending rules, and regulators in Italy and Spain banned short-selling on some stocks.
- China’s central bank said it would pump in $79 billion to bolster the economy.
Get your daily fix of global markets here.
2. Coronavirus: States Restrict Public Places To Curb Spread
With the total confirmed cases in India rising to 81, a number of states have ordered shutdowns of public places to curb the spread of the coronavirus.
- Maharashtra has declared it the epidemic as cases rose to 17 in the state. Gyms, swimming pools and theatres have been shut in Mumbai, Navi Mumbai, Thane, Pune and Pimpri Chinchwad till the end of March. Schools in Pune and Pimpri Chinchwad will be shut till further notice.
- Karnataka too has shut its malls, pubs and night clubs after the first Covid-19 related death was reported there.
- Bihar has announced the closure of all schools, colleges and public parks till March 31.
- The central government also brought masks and sanitizers under the Essential Commodities Act.
- Globally, the total cases rose to 1.35 lakh driven by increases in Iran, Switzerland and Spain. The death toll topped 5,000.
Follow developments around the novel coronavirus here.
Indian officials have been in dialogue with private health care service providers on steps taken to contain and treat Covid-19 but the government hasn’t solicited their active participation as yet, according to head of companies BloombergQuint spoke with.
- Detailed steps of how the private sector can contribute are being discussed with the government, Sangita Reddy, joint managing director at Apollo Hospitals Enterprise Ltd. said.
- Ameera Shah, managing director at diagnostics company Metropolis Healthcare Ltd., said the private sector could help expand testing facilities.
- India needs to prepare to bring additional capacity online in case the current number of 81 patients rise exponentially, said Kiran Mazumdar-Shaw of Biocon.
Here are the other highlights of the conversation on how private health care providers can help India contain the virus.
3. Private Lenders Join In On The Big Yes Bank Rescue
Axis Bank Ltd., ICICI Bank Ltd. and Kotak Mahindra Bank and Housing Development Finance Corporation Ltd. have approved investments in Yes Bank Ltd., joining State Bank of India in an attempt to resuscitate the lender placed under moratorium last week.
- The board of ICICI Bank approved an investment of Rs 1,000 crore in Yes Bank.
- Similarly, HDFC will also buy 100 crore equity shares of Yes Bank at a price of Rs 10 per share, investing Rs 1,000 crore in the private bank.
- Axis Bank, in its exchange notification, said that it will invest Rs 600 crore.
- Kotak Mahindra Bank will be investing Rs 500 crore.
Other private investors are also likely to contribute to the rescue.
4. RBI Steps In With Support, SEBI Says Ready To Act
The Reserve Bank of India on Friday stepped in to meet any additional short-term liquidity needs as the central bank continued to respond to a fast-changing environment.
- In a release on Friday afternoon, the RBI said that that it will offer Rs 25,000 crore via variable rate repo operations under its liquidity adjustment facility.
- The decision to offer this short-term liquidity followed the central bank’s decision to conduct sell/buy forex swaps to ensure that the market is adequately supplied with dollars.
- An unintended consequence of this is that rupee liquidity gets sucked out.
The Indian central bank has started taking targeted emergency measures as the global and local spread of the novel coronavirus picks up.
Capital markets regulator Securities and Exchange Board of India on Friday said the regulator and stock exchanges are prepared to "take any action" as required to deal with market volatility, hours after trading was halted for 45 minutes.
- Over the last few days, the Indian stock market has been moving in tandem with other global markets due to concerns over the coronavirus pandemic.
- This has also resulted in fear of an economic slowdown and recent fall in global crude prices, SEBI said in a statement.
SEBI said the fall in the Indian indices has been significantly lower than the stock market in other countries.
5. Risk Aversion Returns To Credit Markets
Risk aversion has returned to credit markets amid the rapid spread of the coronavirus globally and the detection of more cases within India as well.
- After a brief reprieve, credit spreads, or the additional interest demanded by investors over government bond yields, have started to widen again.
- Credit spreads for AAA-rated corporate bonds have widened from around 60 basis points a few days ago to 75 basis points on March 12, according to the Bloomberg-FIMMDA Index.
- Credit spreads on AA-rated corporate bonds rose from 125 basis points to over 140 basis points across the one, three and five-year buckets on March 12.
Corporate bond markets are seeing the fallout of the nervousness in other asset markets.
- The economic impact of Covid-19 on India
- Coronavirus poses risk to revenue of Indian IT companies, say analysts
- India foreign visa ban could shave 50 basis points from growth, Citi says
- PBOC pumps $79 billion to banks for virus-weakened economy
- Warren Buffett bars shareholders from Berkshire’s meeting over virus
6. The Portfolio Manager That Beat The February Rout
Edelweiss Asset Management Ltd. outperformed its peers even as Indian benchmark indices fell the most in 11 months amid the coronavirus outbreak and weak demand.
- The portfolio manager returned 2.98 percent in February when the average return for the top 60 portfolio managers covered by BloombergQuint fell 3.5 percent during the month compared to a 6 percent fall in the benchmark S&P BSE Sensex.
- Edelweiss Asset Management manages portfolios under Edelweiss Focused Small Cap Fund, Edelweiss Rubik Equity Portfolio, Edelweiss Asset Allocation and Edelweiss Special Opportunities Fund.
The outperformance came as blue-chip and midcap stocks saw a selloff in February.
7. Deadline To Submit Air India Bids Extended
The central government extended the deadline to submit bids for the sale of debt-laden Air India by more than a month amid the coronavirus outbreak.
- Potential bidders can submit their expressions of interest for the nation carrier by April 30 instead of the previous deadline of March 17, according to a government notification.
- The government also revised the dates for release of responses to the written queries from potential bidders to March 20 from March 16, it said.
The decision to revise the timelines was based on the request from the interested bidders.
8. Trade Deficit Narrows To Below $10 Billion
India’s trade deficit narrowed in February as exports snapped a six-month losing streak.
- The gap between exports and imports was $9.85 billion last month, compared with $15.2 billion in January
- Imports rose 2.48 percent from a year ago to $37.5 billion.
- Exports rose 2.91 percent to $27.7 billion.
The economic downturn has curbed demand for imports in recent months while the coronavirus spread has further affected supply chains.
9. How The Proposed New-Look CCI Will Work
The the draft Competition (Amendment) Bill seeks to make far-reaching changes in the structure of the Competition Commission, writes former CCI Chairman Vinod Dhall.
- The Director General’s office will now be brought into the main body of the CCI, and the appointments of the DG staff will be made by the commission.
- The proposed governing board structure is similar to what prevails in the case of a few existing regulators like SEBI and thus is not a novel feature.
- The Bill reiterates that the CCI will comprise the chairman and six members.
- Further, the commission can set up panels of at least three members.
Read about the other fixes here.
10. Former Kashmir Chief Minister Farooq Abdullah Out Of Detention
After being in home detention for over seven months, Farooq Abdullah was released on Friday with the government revoking the Public Safety Act against the former Jammu and Kashmir chief minister.
- The 82-year-old National Conference leader was initially taken into preventive detention on Aug. 5 last, the day the Centre abrogated Article 370 of the Constitution that granted special status to Jammu and Kashmir, and later slapped with the PSA.
- Walking out of his Gupkar road residence in Srinagar where he was kept under detention, Abdullah demanded that his son and former chief minister Omar and PDP's Mehbooba Mufti, also a former chief minister, and other politicians lodged in various prisons in the union territory and outside should be released at the earliest to allow political activities.
"Today, I am free but this freedom is not complete."