BQuick On April 21: Top 10 Stories In Under 10 Minutes

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

1) Covid-19 Cases In India Climb Towards 19,000

The number of confirmed Covid-19 cases in India climbed closer to the 19,000-mark on Tuesday evening with the death tally cross 600.

• India reported 1,329 new cases over the last 24 hours taking the total to 18,985, according to health ministry data.
• This includes 3,260 recoveries and 603 deaths.
• Over the last 24 hours, India reported 44 deaths and 418 recoveries.
• Meanwhile, the Indian Council of Medical Research has today advised states to hold off on using the newly acquired rapid testing kits for two days.
• This was done after one of the states complained about a lower detection and variation in testing samples.
• In Maharashtra, the government ordered that lockdown relaxations in Mumbai and Pune be withdrawn as a lot of people had started commuting, increasing the threat of a new wave of Covid-19.

Track latest developments on how the coronavirus situation is evolving in India here.

Globally, cases crossed 24 lakh leaving over 1.71 lakh dead.

• Germany reported the smallest increase in infections this month.
• Singapore, once a standard-bearer for taming the virus, reported more than 1,000 cases for a second day and will extend its partial lockdown.
• The Netherlands reported 729 new cases, the least in nearly a month.

Follow the outbreak across the globe here.

2) Leading Epidemiologist Says India Has Flattened The Curve

The last time BloombergQuint spoke to Dr. Jayaprakash Muliyil, one of India’s leading epidemiologists, he warned that it would be a very long road to normal. Today, 27 days into an extended all-India lockdown and on the first day some additional economic activity has resumed in certain states, Dr. Muliyil offers a more positive prognosis.

• “...the curve indeed has been flattened,” he says, based on which he has lowered his assessment of the reproduction factor (how many individuals are infected by one patient) but raised his threshold for herd immunity in the denser parts of India.
• To be sure, India continues to add a thousand or more cases every day (1,540 in the last 24 hours), but recoveries have also spiked.
• So has India succeeded in flattening the Covid-19 curve? “...we have data to show that the curve indeed has been flattened. But the word ‘success’ you have to interpret cautiously, because it will depend on our goals.”

Read the future course of action that Dr. Muliyil is advocating.

3) Oil's Meltdown Spreads...

The oil meltdown accelerated, with huge losses sweeping through markets as the world runs out of places to store unwanted crude and grapples with negative pricing.

• West Texas Intermediate plunged below zero on Monday for the first time in history with the contract for May nearing expiration, leaving traders in a panic as they tried to avoid taking delivery of physical barrels.
• On Tuesday the losses spread to the next month -- highlighting the massive glut in the market causing the rout rather than any technical quirk.

The collapse of later contracts underscored the severity of the crisis.

Indian commodity traders also faced the shock waves from crude’s historic collapse.

• Multi Commodity Exchange of India Ltd. set the settlement price for crude oil futures contract that expired on April 20 at minus Rs 2,884 per barrel, according to a statement.
• The contracts were being settled based on the WTI crude settlement price of minus $37.63, converted into Indian rupees.

4) ...But That Won't Make Your Fuel Cheaper

When crude oil is tumbling to record lows every day, Indians haven’t seen that reflect in petrol and diesel prices at the fuel station. The reasons are familiar: an increase in taxes by the government to shore up its revenue and higher marketing margins of state-run oil retailers to make up for losses.

• The Asia benchmark -- Brent crude, fell below $20 per barrel—its lowest point since February 2002. That’s because the global economic uncertainty and price war between Saudi Arabia and Russia caused a global glut.
• Yet, fuel prices at the pump have remained unchanged in India due to two main factors.

Find out what those two reasons are.

5) U.S. Stocks Slump; Nifty Drops Below 9,000

A fresh bout of risk aversion gripped financial markets as U.S. stocks tumbled for a second day, crude oil futures were gripped by turmoil and Treasuries rallied.

• The S&P 500 fell more than 2.5 percent, with equity investors shrugging off signs that Congress is close to a fresh spending bill to combat the impact of the pandemic.
• The historic rout in crude rattled markets anew, with the June contract plunging as much as 42 percent after May contracts expiring Tuesday sank below zero for the first time in history.
• The 10-year Treasury yield dropped below 0.55 percent.

Get your daily dose of global markets here.

Indian equity markets mirrored weak global cues and ended lower on Tuesday after a subdued session on Monday.

• The S&P BSE Sensex ended 3.2 percent lower at 30,636 while the NSE Nifty 50 index ended below the 9,000 mark at 8,981, down 3 percent.
• The Sensex ended over 1,000 points lower while the Nifty shed 280 points.
• Private Banks and I.T. were the laggards in today's trading session.
• Among sectoral indices, barring Nifty Pharma, all indices ended with losses.

Follow the day’s trading action here.

6) Court Quashes Criminal Complaint Against Deloitte, BSR In IL&FS Case

The Bombay High Court quashed criminal complaints filed by the Serious Fraud Investigation Office against the erstwhile auditors of Infrastructure Leasing and Financial Services Ltd. and its non-bank lending arm for alleged collusion in falsifying books.

• A division bench of Chief Justice Bhushan Dharmadhikari and Justice Nitin Borkar, while upholding the constitutional validity of Section 140(5) of the Companies Act, observed that the provision applies only to existing auditors.
• Deloitte Haskins and Sells and BSR & Associates LLP., an Indian affiliate of KPMG, had moved the high court after the National Company Law Tribunal denied relief.
• They had challenged the central government’s move to bar them for five years, and the SFIO’s decision to initiate criminal proceedings invoking Section 447 of the Companies Act, among others.

Read the backstory and the government's view on the matter.

7) Is There Adequate Reward For The Risk In FMCG Valuations?

Here’s the investor’s dilemma – how to evaluate companies that are labeled ‘defensive’, but whose valuations are anything but, writes Niraj Shah.

• ‘Growth at any price’ was a truism of 2019. But it is being questioned in 2020.
• Is there visibility on whether their growth trajectory will remain intact or taper down?
• Could these higher operating costs and low pricing power squeeze margins.

As infallible as the frontline FMCG companies may appear, investors should constantly review the risk-reward.

8) Sunil Munjal Says It Will Be A While Before Automakers Restart Manufacturing

Indian automakers aren’t likely to begin manufacturing vehicles anytime soon even as the government allowed them to start operations from April 20 even as the lockdown to contain Covid-19 continues, according to Sunil Munjal.

• “To expect the manufacturing facilities to come back and spring overnight is a near impossibility,” Munjal, chairman of the Hero Enterprise Ltd., told BloombergQuint in an interview.
• “The distribution dealerships need to open, car servicing workshops need to open, people need to venture out to check and buy vehicles and when they do, manufacturers need to liquidate their pent-up inventories before they can start making more.”

Even after these stages, manufacturing might not be easy.

9) India Inc. Stares At Prolonged Earnings Downgrades

As the outlook for Indian corporate profits grows increasingly murky under the influence of the coronavirus pandemic, analysts are hunkering down for a protracted series of forecast cuts.

• The NSE Nifty 50 Index is still down 24 percent for the year despite recovering since late March.
• The average analyst estimate for 12-month forward earnings per share on the gauge has continued to fall, and is down about 10 percent percent in the past six weeks.
• “Estimating earnings in such a fluid global and local environment is fraught with risks, and to that extent, we are expected to undergo more revisions as we move forward” in the fiscal year to March 2021, Gautam Duggad, an analyst with Motilal Oswal Financial Services Ltd., said in a report.

Motilal Oswal expects sales for Nifty companies declined 10 percent year-on-year in the January-March period, with profits sliding 20 percent.

Related Coverage

• India's stocking up of milk help lift dairy shares during lockdown.
• Factories tip-toe back after designated zones partially lift lockdown.
• Deficit funding to rate cuts are India’s options to fight virus.
• India’s virus lockdown sees clean energy gain at coal’s expense.
• Students must be promoted without exams, says Kapil Sibal.

10) Trump Says He Will Suspend Immigration To U.S.

President Donald Trump said he’ll sign an executive order temporarily suspending immigration into the U.S. as the country tries to contain the spread of the coronavirus.

• Trump made the announcement by tweet late Monday night, and did not offer specifics, such as the time frame or the scope of who would be affected.
• He tweeted that he made the decision, “in light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens.”
• National Security Advisor Robert O’Brien, speaking to reporters at the White House on Tuesday morning, called the suspension “a temporary issue” and said he didn’t know how long it would last.

It’s the latest measure taken by Trump and his administration to restrict the U.S. border amid the pandemic.