BQuick On April 3: Top 10 Stories In Under 10 Minutes   
An automobile drives along an empty road near the VW automobile factory in Zwickau, Germany (Photographer: Krisztian Bocsi/Bloomberg)

BQuick On April 3: Top 10 Stories In Under 10 Minutes  

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

1. India Covid-19 Cases Cross 2,500; U.K. Reports 684 Deaths In A Day

India added 478 new Covid-19 cases in the last 24 hours.

  • The total number confirmed cases in India rose to 2,547 as of 6 p.m. today, according to the health ministry.
  • This includes 163 cured or discharged patients and 62 people which succumbed to the respiratory illness.
  • Today is the tenth day of the 21-day lockdown, scheduled to end on April 14.
  • Over the last two days, 647 positive cases have been found that were linked to the controversial Tableeghi Jamaat event in Nizammudin area of Delhi.
  • Meanwhile, India has conducted over 66,000 tests till date of which over 8,000 tests were done in the last 24 hours.
  • 182 labs are operational in the country for Covid-19 diagnosis of which 130 are government run.
  • Prime Minister Narendra Modi has called for yet another show of solidarity on April 5.
  • He's asked citizens to shut their lights and show up on their balconies at 9 p.m. for 9 minutes with torches and candles.

Follow the developments around the coronavirus outbreak in India here.

Globally, cases crossed 1 million with almost 55,000 dead.

  • U.K. reported its deadliest day yet with an increase of 684 deaths taking the toll to 3,605.
  • Spain reported the first decline in new coronavirus deaths in four days.
  • GlaxoSmithKline Plc and AstraZeneca Plc are in talks to set up a lab to explore new ways of testing for the coronavirus.

Catch updates around the global spread of the virus here.

Also read: India Finds Itself At The Back of The Line For Virus Test Kits

2. India Seeks $6 Billion To Fight Virus

India is seeking as much as $6 billion of loans from multilateral institutions such as the Asian Development Bank to bolster its efforts to fight the coronavirus outbreak, people with knowledge of the matter told Bloomberg News.

  • The World Bank has already committed $1 billion, while Prime Minister Narendra Modi’s government is in talks with Asian Infrastructure Investment Bank and ADB, the people said, asking not to be identified because the details haven’t been finalised.
  • Proceeds including from the World Bank will be used to acquire testing kits and ventilators, turning hospital beds into intensive care unit beds as well as for buying personal protective equipment for health care workers.

For India, the pandemic is not just a health challenge but also has a deep social and economic impact.

3. Nifty Slumps; U.S. Stocks Whipsaw After Jobs Data

Indian equity markets ended the truncated week on a negative note, with no positive cues emerging from Europe or U.S. Futures.

  • Both the S&P BSE Sensex and the NSE Nifty 50 index reported their seventh consecutive weekly decline.
  • This is the longest stretch of weekly declines since July 2008.
  • After trading for majority of the session in a range, both benchmark indices ended near the lowest point of the day.
  • The Sensex fell 2.1 percent to end at 27,674, while the Nifty too shed 2.1 percent to close at 8,083.
  • For the week, the benchmarks fell 7.4 and 6.7 percent respectively.
  • All sectoral indices barring Nifty FMCG and Nifty Pharma ended in losses.

Follow the day’s trading action here.

U.S. stocks fluctuated and the dollar held gains after a plunge in hiring last month confirmed the pandemic’s devastating toll on the world’s largest economy.

  • The S&P 500 was mixed as investors digested the abysmal jobs report that captured data in the period largely before government-mandated shutdowns went into widespread effect.
  • As with record claims for unemployment, the latest numbers bear little information on the current state of the economy, making it difficult for investors to value financial assets.
  • Brent crude jumped as much as 16 percent on Friday after a record jump on news the OPEC+ coalition will hold a virtual meeting on Monday and that Russia is ready to cut production.

Get your daily fix of global markets here.

4. RBI Cuts Forex, Debt Market Trading Hours

The Reserve Bank of India has decided to shorten trading hours for foreign exchange and money markets products, in light of challenges posed by lockdowns imposed to curb the spread of Covid-19.

  • The shortened hours, which will be in place from April 7-17, apply to products that do not trade on recognised exchanges.
  • The revised trading hours do not apply to products traded on recognised stock exchanges, the RBI said.
  • For foreign currency to Indian rupee trades, including derivatives, the timing has been revised to 10 a.m.-2 p.m. from 9 a.m.-5 p.m.

Find out what the revised trading hours are in other segments of the currency and derivatives market.

5. Nifty 50’s Valuations Get A Reality Check

Half of the Nifty 50 stocks, excluding financials, are trading at single-digit valuations as Indian equity markets are nearly one-third off record-high levels they scaled in January.

  • Currently, of the 41 ex-financial Nifty 50 stocks, 21 are trading at single digit 12-month forward price-to-earnings ratio.
  • Commodity—metal and oil—stocks are the ones with the lowest valuations in the list, according to Bloomberg data.

Find out why metals, oil and gas and auto stocks are trading at such cheap valuations.

Also read: Macquarie’s Top 10 Stock Picks In India Amid Market Turmoil

6. Mutual Funds Have A Loan Moratorium Problem

Even as the market regulator eased norms for rating agencies amid disruptions caused by the coronavirus outbreak, mutual funds may not be in a position to restructure any debt instruments.

  • Securities and Exchange Board of India asked credit rating agencies to provide temporary relaxation in rating a default if it’s caused because of the lockdown or a loan moratorium.
  • But SEBI guidelines are not clear, a senior executive at a domestic mutual fund house told BloombergQuint on the condition of anonymity as the regulator is involved.
  • SEBI has left it to the understanding of mutual funds and credit rating agencies, he said.

Here’s why the moratorium could be problematic for the mutual fund industry.

7. India Cannot Rely On Its Trade Partners During The Pandemic

The word ‘autarky’ traces its origins back to the Greek language. In English, it means self-sufficiency. And in economic parlance, it denotes a system which is more self-sufficient than inter-connected.

  • The global spread of Covid-19, which has forced many a country to impose complete or partial lockdowns, may force India into a period of autarky-like conditions as global trade and supply chains are disrupted significantly.
  • “Essentially, for the next three-odd months, India will move closer to being a closed economy, with foreign trade likely to remain disrupted,” said NR Bhanumurthy, professor at the National Institute of Public Finance and Policy.
  • About 35 percent of India’s exports and imports come from the ten countries that have reported the highest number of Covid-19 cases.

Both imports and exports will likely take a hit in the coming months.

Related Coverage

8. Moody’s Puts IndusInd Bank Under Review For Downgrade

Rating agency Moody’s Investors Service has placed the domestic and foreign currency issuer ratings for IndusInd Bank Ltd. under review for a potential downgrade, it said in a statement on Friday. The rating action was due to the bank’s business profile, which is prone to more risks in the current macroeconomic scenario, Moody’s said.

  • The bank’s current issuer rating is at Baa3. Moody’s has also placed IndusInd Bank’s baseline credit assessment of ba1 under review for downgrade.
  • “The bank's loan portfolio includes a relatively higher proportion of microfinance and vehicle finance loans than its peers, which are at a high risk of being negatively impacted by the economic shock,” Moody’s said in its statement.

Moody’s pointed out that IndusInd Bank’s liabilities profile has higher concentration of expensive bulk deposits and lower retail deposits.

Also read: RBL Bank Fears Rise In SME Bad Loans Due To Covid-19 Disruptions: CEO Vishwavir Ahuja

9. Maruti Suzuki Hopes Replacements Will Drive Sales

Once the uncertainty stemming from the coronavirus outbreak settles down, India’s largest carmaker expects demand to increase as buyers look to upgrade from vehicles complying with older emission standards.

  • People who have Bharat Stage IV vehicles might want to change to newer cars and replacement buying might get accelerated, Shashank Srivastava, executive director (marketing and sales) at Maruti Suzuki India Ltd., said.
  • Car sales may also go up if people want to move away from public transport, Srivastava said. “When the lockdown was opened in China, consumer survey surprisingly said that demand for personal cars will go up as consumers will go away from public transport, which is a positive for the automakers.”

The bigger problem would be financing inventory for dealers.

10. Home Alone During Covid-19

Work from home is not an option for shopfloor employees and physical processes, but senior executives of technology to manufacturing companies BloombergQuint spoke with expect it to last a while. For some, it’s been full for glitches, while others think it’s not that bad.

  • When people join from different time zones and have multiple such interactions lined up in the day, a 15-minute delay disrupts the schedule.
  • Workers marooned at home lose the advantage of face-to-face interaction about projects and quick consultations. That, too, slows decision-making.
  • That’s the reality companies are grappling with amid lockdowns and social distancing to contain the new coronavirus pandemic.
  • But with businesses losing time and revenue and the global economy is already in a recession, it’s the only way ahead, at least for now.

Here’s how some of the biggest Indian companies are managing working from remote locations and the challenges that they are facing.

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