BQuick On April 16: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s stories in brief.
1. India Covid-19 Cases Near 13,000; Dharavi Reports 26 New Cases
The total number of confirmed Covid-19 infections in India rose further on Thursday reaching 12,759.
- India added 826 new cases over the last 24 hours, according to the health ministry's update on Thursday evening.
- Over 1,500 people have recovered while 420 have died.
- While it took the country 70 days to report its first 5,000 cases, the next 7,000 have come in just eight days.
- Five states—Maharashtra, Delhi, Tamil Nadu, Rajasthan and Madhya Pradesh—have more than 1,000 cases each and make up for more than half of India's cases.
- Dharavi recorded 26 new coronavirus cases including one death on Thursday, taking the total tally to 86, as the highly contagious virus spreads rapidly through the cramped lanes of Mumbai’s biggest slum despite a lockdown.
- Prime Minister Narendra Modi on Thursday reviewed the possibility of a second stimulus package to boost sectors that are worst-affected.
- Modi held a meeting with Finance Minister Nirmala Sitharaman about the state of the economy, sources told PTI.
- Meanwhile, e-commerce firms like Amazon and Flipkart have been allowed to sell mobile phones, televisions, refrigerators, laptops and stationery items from April 20, officials said.
Follow developments around the Covid-19 outbreak in India here.
Globally, cases crossed the 2-million mark leaving more than 1.38 lakh dead.
- U.S. President Donald Trump said that the outbreak is plateauing in parts of the country adding that he will soon unveil guidelines to reopen the economy.
- Britain is expected to extend its lockdown, even as officials said there are signs the U.K. may soon be past the worst.
- New cases climbed in Spain and Germany, where the government plans to keep most of the restrictive measures in place.
Track all the virus updates from across the globe here.
2. IMF’s Gopinath Says There’s Scope For India To Do More
There is more scope for further monetary policy action and fiscal stimulus measures in India, according to International Monetary Fund's Chief Economist Gita Gopinath.
- “We are also anticipating that there will be more monetary stimulus in the sense of rate cuts and other kinds of measures, and we also see scope for more being done on the fiscal side to support households,” Gopinath told BloombergQuint in an interview.
- It’s very clear that more needs to be done in India even if that meant a substantial expansion of the fiscal deficit, Gopinath said.
- And while she supported India’s lockdown and efforts to prioritise health and protect lives, she also struck a note of caution when saying she “assumes the situation on the ground is worse than what we are seeing currently”.
Read why IMF is advising countries to spend what they need to, but “keep the receipts”.
3. Nifty Holds Gains While Goldman Downgrades India
Indian markets snapped a two-day losing streak, ending with modest gains in what turned out to be a lacklustre trading session. Benchmark indices managed to eke out gains after trading in a narrow band through the day.
- The S&P BSE Sensex ended 0.7 percent or 222.8 points higher at 30,602.
- The Nifty failed to hold the 9,000 mark to end at 8,992, up 0.76 percent.
- Private Banks like ICICI Bank Ltd. and HDFC Bank Ltd., which led the sell-off during the last hour of Wednesday's trading session, were the primary contributors to the gains.
- The India Volatility Index is now well below the mark of 50, ending 8 percent lower at 45.8, the lowest level since March 12.
- Among sectoral indices, the Nifty Media index was the top performer, ending with gains of 3 percent.
Follow the day’s trading action here.
Nifty 50 has recouped some of the losses after its biggest slide in more than a decade, tracking the global Covid-19 selloff. Yet, Goldman Sachs downgraded Indian equities by a notch as it expects domestic markets to lag regional peers.
- Goldman Sachs downgraded India to marketweight from overweight within Asia on delayed recovery and expensive valuations.
- It cut Nifty target to 9,600 by June 2021, down from 10,800.
Indian equities are likely to relatively lag on expectations of a slower recovery without a forceful stimulus.
Stocks Volatile Even As U.S. Sheds 22 Million Jobs In Four Weeks
Treasuries climbed amid unemployment and housing data showing the brutal impact of the coronavirus pandemic on the world’s largest economy.
- In a very volatile session, the S&P 500 resumed gains as consumer and technology companies rallied.
- The Nasdaq 100 continued its rebound, rising 1.8 percent to wipe out its losses for the year.
- Traders also assessed a fresh batch of corporate earnings, with Morgan Stanley posting a 24 percent jump in trading revenue, while casting doubt on whether those gains can continue.
- United Airlines said that travel demand was “essentially zero” and showed no signs of improving in the near term, spurring a sell-off in the industry’s stocks.
- More than 5 million Americans filed for unemployment benefits last week, bringing the total in the month since the outbreak throttled the U.S. economy to 22 million and effectively erasing a decade worth of job creation.
Get your daily fix of global markets here.
4. Exclusive: Future Group Eyes Debt Restructuring
The Kishore Biyani-led Future Group is looking to restructure Rs 7,500 crore in bank loans as various parts of the business face stress. The strains were visible even before the local spread of Covid-19 disrupted businesses across many sectors, including organised retail.
- The group had approached bankers for a loan restructuring in March, according to three people familiar with the matter, who spoke on condition of anonymity.
- The restructuring was sought before a nationwide lockdown was announced by Prime Minister Narendra Modi on March 24.
- The consortium of lenders to the group is led by State Bank of India.
Apart from debt restructuring, the group is considering monetisation of its non-core businesses.
5. Covid-19 ‘Storm’: TCS Expects Revenue Decline In FY21
Tata Consultancy Services Ltd.’s quarterly profit met analysts’ estimates even as the Covid-19 pandemic stalled economic activities and spending across the globe.
- Net profit fell 0.8 percent sequentially to Rs 8,049 crore in the quarter ended March, the software services exporter said in an exchange filing. Analysts’ estimates compiled by BloombergQuint had pegged the bottom line at Rs 8,219 crore.
- Revenue rose 0.2 percent quarter-on-quarter to Rs 39,946 crore—slightly lower than the Rs 40,379-estimate.
- TCS expects revenue to decline in the ongoing financial year 2020-21, Gopinathan said.
- “We expect a return to normalcy in Q3FY21,” he said, adding that the fourth quarter of 2020-21 will be similar to the recently-concluded one.
- Margin expanded 10 basis points to 25.1 percent.
TCS added five new clients in the $100-million-plus band over last year.
6. RIL Raises Rs 8,500 Crore In Bonds But Rates Rise
Reliance Industries Ltd. raised Rs 8,500 crore in three-year bonds, just short of its target of raising Rs 9,000 crore. The two-part non-convertible debenture issue saw interest from large banks but at a higher coupon rate than what was paid in previous issues.
- A handful of companies have raised funds over the last two weeks, most have had to raise smaller amounts at higher rates.
- RIL’s bond issue fared well in the current circumstances, said bankers.
- The Rs 9,000-crore issue had two equal parts: a fixed coupon tranche and a floating rate tranche. The bonds were rated AAA by Crisil Ratings and Care Ratings.
- According to two of the people quoted above, the fixed-rate tranche received 14 bids, while the floating rate tranche received seven bids.
Majority of the bonds were subscribed to by large banks.
7. Summer Appliance Makers Stare At A Lost Season
Demand for summer appliances such as room coolers, refrigerators and air-conditioners is expected to decline as the nationwide lockdown to curb the novel coronavirus pandemic has been extended to May 3.
- Brokerages expect the disruption—as all businesses barring essential services were ordered shut since March 24—in the first quarter of 2020-21 and muted demand for the products to persist for next six months.
- Analysts cut the target prices for most consumer durables makers since March, with Whirlpool of India Ltd. and V-Guard Industries Ltd. seeing the biggest downgrade among peers.
- The BSE Consumer Durables Index has fallen by almost 23 percent during the period.
Here’s a look at the factors affecting demand for white goods this summer.
8. Covid-19 Response: Can Modern Monetary Theory Come To India’s Rescue?
Should our rallying cry be to “do whatever it takes”, or a more constrained “do whatever minimum we can survive with”, asks Ananth Narayan.
- One heterodox economic policy framework that could justify a higher fiscal spend is Modern Monetary Theory.
- Surprisingly, in India’s specific case, those that argue for and against MMT might find common ground.
- Domestic output growth has to keep pace and meet the aggregate demand fostered by such spending.
We require a serious overhaul of the economy, of a kind that we haven’t seen since 1991.
9. Aarogya Setu App Gets 50 Million Users Amid Privacy Concern
An app launched by Prime Minister Narendra Modi’s government to track and contain the spread of the coronavirus is the fastest ever to reach 50 million users, while being dogged by privacy concerns.
- Aarogya Setu -- Hindi for Healthcare Bridge -- alerts users if they come in contact with an infected person and informs them about health services they could contact.
- It garnered 50 million users in 13 days, tweeted Amitabh Kant, chief executive officer at government think tank Niti Aayog. That’s the fastest pace for any app including Facebook, he said.
- Singapore also launched TraceTogether app last month.
- Apple Inc. and Google have joined hands to develop a technology to curb the spread of the virus by telling users they should quarantine or isolate themselves after contact with an infected individual.
Aarogya Setu compares unfavorably with TraceTogether, according to the Internet Freedom Foundation.
10. IL&FS Sells Entire Stake In Wind Power Arm
Cash-strapped Infrastructure Leasing and Financial Services on Thursday said it has sold its 100 percent stake in IL&FS Wind Power Services Ltd. to Orix Corporation, Japan, for Rs 6.05 crore.
- IWPSL, a wholly-owned subsidiary of IL&FS Energy Development Company, is engaged in providing supervisory and management support services to seven operating wind power generating special purpose vehicles.
- In October 2019, the group had divested its 51 percent equity stake held in seven wind power SPVs to Orix.
- The divestment of IWPSL has resulted in a consideration of Rs 6.05 crore to IL&FS Energy that will be kept in an escrow account for its lenders, the group said in a release.
IWPSL, classified as a 'green company', has no outstanding debt.