BQuick On April 15: Top 10 Stories In Under 10 Minutes

This is a roundup of the day’s stories in brief.

1. India Covid-19 Cases Near 12,000; 170 Districts Identified As Hotspots

The total number of confirmed Covid-19 infections in India inched closer to the 12,000-mark, a day after Prime Minister Narendra Modi announced that the nationwide lockdown will be extended to May 3.

• India has added 1,118 new Covid-19 cases taking the total number to 11,933.
• This includes 1,344 who have been discharged and 392 deaths.
• The number of active cases in India has crossed 10,000 for the first time today.
• Four states and union territories—Maharashtra, Delhi, Tamil Nadu and Rajasthan—account for more than half of the cases in India.
• The health ministry has identified 170 districts as COVID-19 hotspots and 207 districts as potential hotspots, officials said, even as they reiterated that there has been no community transmission of the disease in the country so far.
• This list, the health ministry said, will help in early identification which is key in effective patient management.

Track developments around the outbreak in India here.

Globally, coronavirus cases rose over 1.99 million leaving more than 1.27 lakh people dead.

• New data on asymptomatic cases from China suggested that most people never show outward signs of being sick.
• Portugal reported its biggest increase in new cases in five days, while the numbers for Netherlands dropped.
• European Commission has drawn up plans for partial lifting of lockdown but warned that some restrictions will remain till a vaccine or cure is found.

Catch all updates from across the globe here.

2. Easing The Lockdown: Conditions Apply

India is considering easing restrictions in some areas that are least affected by the coronavirus pandemic to mitigate the hardships faced, even as the government extended the nationwide lockdown till May 3.

• The Union Ministry of Home Affairs issued revised guidelines to allow select activities from April 20.
• But before operating these relaxations, states/union territories/district administrations will have to ensure that all the preparatory arrangements have been made with regards to social distancing in offices, workplaces, factories and establishments, it said in a statement.
• The consolidated guidelines will not apply in any containment zones.

Find out which commercial establishments, construction and manufacturing activities may be allowed to function after April 20.

3. India Looks Forward To Normal Rains This Year

India is expected to receive a normal monsoon in 2020, the meteorological department said, offering some good news to an economy that has come to a standstill during the world’s biggest lockdown to contain the new coronavirus pandemic.

• “Annual rainfall during the June-September rainy season is likely to be 100 percent of the long-term average, with an error of plus or minus 5 percent,” Madhavan Nair Rajeevan, secretary at the Ministry of Earth Sciences, said in a press conference.
• A normal monsoon, which waters more than half of India’s farmland, will be even more crucial to spur demand in the economy.

This is the first stage forecast. The second stage forecast will be released in the first week of June.

4. Nifty Slumps; Crude Drops Below $20

Indian equity markets ended lower for the second day in a row after trading with gains for majority of the trading day.

• The S&P BSE Sensex ended 1 percent, or 310.21 points, lower at 30,379.
• The NSE Nifty 50 ended 0.76 percent lower at 8,925, adding to Monday's 1.3 percent fall.
• Majority of the losses came from private banks, which saw a sharp correction in the final hour of trade after Macquarie cut their price targets by as much as 70 percent.
• Among sectoral indices, the Nifty FMCG index managed to hold on to gains, ending 4 percent higher while the Nifty Bank and the Nifty Auto index ended 2 percent lower.

Follow the day’s trading action here.

U.S. stocks slumped as sour results from big banks and miserable economic data added to concern over a severe global recession.

• The S&P 500 Index trimmed a rally from its March lows as Goldman Sachs Group Inc., Bank of America Corp. and Citigroup Inc. plunged.
• Energy shares tumbled, with oil sinking below $20 a barrel as the IEA said demand would decline by a record.
• U.S. airlines rallied after reaching preliminary deals to access billions of dollars in federal aid.
• Treasuries and the dollar climbed.

Get your daily fix of global markets here.

5. Analysts Cut Target For Nine Out Of Ten Indian Stocks

Analysts lowered target prices for 90 percent of Indian stocks in the past two months as the Yes Bank Ltd.’s fiasco, falling crude and now the lockdown to contain the new coronavirus pandemic are expected to drag growth further below its lowest level in 11 years.

• Target prices were cut for 253 of the 281 stocks tracked by at least 10 analysts, according to Bloomberg data.
• Of the 28 companies that saw an increase in their price targets, only three offer a double-digit return potential.
• The underscores the level of pessimism in the market as the Covid-19 pandemic has stalled businesses across the world.

Find out which companies and sectors saw the steepest cuts and the ones who bucked the trend.

6. Wipro’s Profit Takes A Hit

Wipro Ltd.’s quarterly profit declined as the Covid-19 pandemic stalled economic activities worldwide and disrupted trade.

• Net profit fell 4.5 percent sequentially to Rs 2,345 crore.
• Revenue rose 1.8 percent to Rs 15,750 crore.
• Revenue from IT Services declined 1.1 percent to $2,073 million.
• Wipro did not give a revenue growth forecast for the ongoing quarter, citing uncertainty from the pandemic.

The company expects the next few quarters to be a challenge which will require “tremendous response” on costs.

7. India's Trade Gap Narrows In March

India’s trade deficit narrowed in March from a year earlier as a nationwide lockdown to contain the spread of coronavirus restricted movement of goods.

• The gap between exports and imports was $9.76 billion last month against $11 billion deficit a year ago, according to data released by the Commerce Ministry.
• The shortfall was $9.85 billion in February and compares with the median estimate of $7 billion in a Bloomberg survey of 21 economists.
• Imports fell 28.7 percent from a year ago to $31.2 billion, compared with a 2.5 percent increase in February.
• Exports declined 34.6 percent to $21.4 billion, against a 2.9 percent rise in the previous month.

The World Trade Organization predicts a deep collapse of trade flows due to the pandemic.

8. Lockdown Impact: Microlenders Stare At Cash Shortfall

Microlenders are facing cash shortages as loan collections have stopped for several weeks amid the lockdown to contain the Covid-19 pandemic, according to ICRA Ltd.

• The cash shortfall for 29 microfinance institutions, accounting for 70 percent of the industry’s loan portfolio, collectively stands at about Rs 2,600 crore in the absence of any external funding support by way of equity, additional debt or extension of moratorium, the ratings agency said on Wednesday.
• These lenders have Rs 8,000 crore worth of repayment obligations and operational expenditure in the first quarter ending June, compared with on-balance liquidity buffer of around Rs 5,400 crore.
• Microlenders had cash or liquid investments of around 10 percent of their assets under management as on March 31.

If the microfinance companies get moratorium from the banks and non-bank lenders, the liquidity cover will be comfortable for April.

Related Coverage

• Real problem is demand, not production: Shree Cement’s HM Bangur
• The fuel that’s thriving amid India’s lockdown
• India to boost drug ingredient output to pare China reliance

9. How Long Can India Inc. Hold Its Breath?

As the economic consequences from the continued lockdown are beginning to stare at us, Renuka Sane and Anjali Sharma ask how many days of liquidity cover is there, in the large non-financial firms, to be able to meet a certain threshold of minimum expenses in the absence of any revenue?

• Firms will find it increasingly difficult to sustain even the minimal operations required to keep themselves alive.
• Even when a firm is not operating, it needs to undertake some expenses. It needs to pay its staff, at least those that it has not yet laid off, it needs to pay interest costs on debt, rentals, utility costs, insurance premiums and auditor fees among others.
• In normal times, a firm earns revenue from the sale of goods and services. It has receivables, or it borrows working capital from banks. In a lockdown, these sources of capital are expected to dry.

A quarter of India Inc. can’t handle a full month of zero revenue, according to the analysis.

10. After Virus, Credit Contagion?

India has chosen an odd combination of strategies in its fight against the coronavirus: a harsh lockdown on economic activity and a meager fiscal response to the loss of jobs and incomes, writes Andy Mukherjee.

• What’s making this more painful is a denial of the role of finance in both containing the fallout of the outbreak and in supporting the recovery later.
• Allowing a credit contagion to take hold is a serious error, especially as India’s under-capitalized lenders were swamped by corporate defaults even before Covid-19 struck.
• As both retail and institutional loans go sour at a rapid pace, the financial sector will amplify the shock of virus-related shutdowns and hobble the return to anything resembling normalcy.

Instead, Team Modi should figure out a fiscal strategy, and then let the Reserve Bank of India step in to support it.