BQuick On April 9: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s stories in brief.
1. Lockdown Tightened In Virus Hotspots; Mumbai Faces Food Supply Disruption
The total number of Covid-19 infections in India inched closer to the 6,000-mark on the 16th day of the three-week lockdown.
- India added 591 new cases over the last 24 hours taking the total tally to 5,865, according to health ministry’s data as of 5:00 p.m.
- That includes 478 people cured or discharged and 169 dead.
- Odisha became the first state to extend the lockdown till April 30.
- Meanwhile, Maharashtra, which has the most cases, tightened already strict lockdown measures in hotspots.
- Authorities sealed settlements, lanes and apartments with over 3,600 squads working in these containment zones to identify new cases.
- Besides, the vegetable, fruit, onion and potato markets run by the Agriculture Produce Market Committee in Vashi will remain shut from April 11 till further orders. Vashi APMC is a key market for food supply in Mumbai.
- Asia's most crowded slum, Dharavi, also saw a rise in cases with the total tally going up to 17. There have been three deaths so far.
- The government has also sanctioned the Rs 15,000 crore as emergency response to Covid-19 that PM Modi had announced earlier.
Follow the coronavirus outbreak in India here.
Globally, cases crossed 1.5 million leaving over 89,000 dead.
- While deaths are now slowing in parts of Europe, they are still accelerating in the U.S., which is on track to overtake Italy in the coming days.
- Spain reported fewer coronavirus-related deaths and is poised to extend a nationwide lockdown.
- Curbs are likely to remain in Britain, where Prime Minister Boris Johnson continues to improve in intensive care.
- Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, said U.S. fatalities from Covid-19 may be far fewer than earlier projections.
Track latest developments around Covid-19 across the globe here.
2. Fed’s New Wave Of Stimulus; IMF’s Great Depression Red Flag
The Federal Reserve on Thursday announced another series of sweeping steps to provide as much as $2.3 trillion in additional aid during the coronavirus pandemic, including starting programs to aid small and mid-sized businesses as well as state and local governments.
- In an unprecedented move, the Fed also said Thursday it would move to shore up some of the hardest-hit parts of financial markets, pledging to start buying some debt recently downgraded to below investment grade as well as certain collateralized loan obligations and commercial mortgage-backed securities.
- “Our country’s highest priority must be to address this public health crisis,” Fed Chair Jerome Powell said in a statement.
The Fed has deployed nearly every tool in its toolbox since March.
The International Monetary Fund sees the world economy suffering its worst recession since the Great Depression this year, with emerging markets and low-income nations in Africa, Latin America and Asia at particularly high risk.
- The IMF’s baseline outlook is for a partial recovery in the global economy in 2021 if the pandemic fades in the second half of this year to allow a gradual lifting of containment measures, Managing Director Kristalina Georgieva said in the text of a speech set to be delivered on Thursday.
- She stressed that uncertainty about the coronavirus duration means things may wind up being even worse.
- “The bleak outlook applies to advanced and developing economies alike,” Georgieva said.
“This crisis knows no boundaries. Everybody hurts.”
U.S. Markets Rise; Crude Rallies On Output Cut Deal
U.S. stocks rose for the third time in four days as investors looked past staggering jobless numbers when the Federal Reserve released new measures to cushion the fallout from the coronavirus.
- The S&P 500 Index climbed as much as 2.3 percent before paring gains.
- That brought this week’s increase to more than 12 percent.
- Oil surged as the world’s top producers agreed on a framework for a deal to curb output.
- Brent futures jumped more than 10 percent as Saudi Arabia and Russia were said to have overcome their conflicts and reached an outline of an agreement.
Get your daily dose of global markets here.
3. Sensex Reclaims 31,000
Indian markets defied all the uncertainty around the coronavirus outbreak to register their best weekly advance since May 2009. It was also their first weekly gain in two months, with the last one being in February.
- The S&P BSE Sensex ended 4.23 percent higher at 31,159.
- Twenty seven out of the 30 index stocks ended the day with gains.
- The index ended the truncated week with gains of 13 percent.
- The NSE Nifty 50 advanced 4.1 percent to end above the 9,000 mark.
- Among sectoral indices, the Nifty Auto index was the top gainer.
Follow the day’s trading action here.
4. Silver Lining In The Mutual Fund Data
Investments into equity mutual funds jumped in March, defying the Covid-19 volatility and the biggest outflow across categories since the IL&FS crisis.
- Net outflow across all segments of schemes stood of Rs 2.12 lakh crore—the biggest since September 2018 when defaults by IL&FS group had triggered an exodus from debt schemes.
- However, equity funds defied the worst-ever monthly decline in the benchmark indices.
- Inflows into equity multi-cap funds rose 40 percent month-on-month to Rs 2,268 crore, while they jumped 28 percent to Rs 2,061 crore for large-cap funds.
Still, total assets under management of mutual funds fell.
5. Big Borrowers Line Up At SBI For Moratorium
State Bank of India has seen a large number of requests, even from investment-grade corporations, for a three-month moratorium of loan repayments as permitted by the Reserve Bank of India, according to two senior officials at the lender.
- Unlike in the case of retail borrowers, India’s largest lender is reviewing these requests on a case-by-case basis.
- Except for large AAA-rated industrial groups, a number of corporations in the AA-rated category have applied for a moratorium, said the first of the two bankers cited earlier, while speaking on condition of anonymity.
- Companies from the automobile, real estate, steel, power, aviation, telecom, among others, have sought relief, the banker said.
A number of these companies are seeing the moratorium as an opportunity to preserve liquidity.
6. Cipla Surges On Approval To Make Generic Inhaler
Cipla Ltd. has received the U.S. drug regulator’s approval to make the first generic of a commonly used inhaler to treat breathing difficulties as demand surges amid the coronavirus pandemic.
- The U.S. Food and Drug Administration gave its final approval to the Mumbai-based company’s abbreviated new drug application for Albuterol Sulfate Inhalation Aerosol 90 mcg, according to an exchange filing.
- The copycat version of Merck Sharp & Dohme Corp.’s Proventil HFA Inhalation Aerosol is used to treat acute episodes of bronchospasm or prevention of asthmatic symptoms.
- Shares surged as much as 15 percent on the approval and closed 12.9 percent higher.
Cipla is likely to benefit from two factors.
7. Cognizant Withdraws Its 2020 Revenue Forecast
Software services major Cognizant on Thursday said it is withdrawing its growth forecast for 2020 given the uncertainty in environment amid the coronavirus outbreak.
- The U.S.-based company, which has over two lakh employees in India, said it expects its March quarter revenue to be within its previously guided range of 3.4-3.6 percent growth (in constant currency) from the year-ago period.
- “The long-term fundamentals of our business remain strong. However, given the unprecedented nature of this crisis, uncertainty around its duration and its impact on our ability to forecast performance, the company is withdrawing its 2020 guidance that was provided on Feb. 5, 2020,” Cognizant said in a statement.
- It will announce its first-quarter financial results on May 7.
The company said that entering the second quarter, it expects the pandemic to further reduce client demand.
8. How Much Financial Flexibility Do States Have To Deal With Covid-19 Strain?
States are at the frontline of the virus fight, with fewer financial options than the centre, writes Ira Dugal.
- Two spending items where states have relatively lower flexibility is interest costs and salaries and pension.
- Many of the business activities through which states get their own revenues are at a near-standstill, tax earnings will plunge.
- The immediate need for states is cash to spend on relief measures.
These are their options.
9. India Pulls Off First Of Record Bond Sales At Higher Costs
India pulled off the first bond auction of its record-borrowing program after paying underwriters almost 50 times more in fees, underscoring how nervous primary dealers were over the deluge of debt.
- In the end, the underwriters may have worried excessively.
- The government sold all Rs 10,000 crore ($1.3 billion) of the benchmark bond, with a bid-to-cover ratio similar to its last sale, and a cutoff yield just two basis points above expectations.
- Traders have been jittery heading into the first government auction of the fiscal year after states ended up having to offer much higher yields to get their bonds sold earlier in the week.
While Thursday’s sale met with robust demand, the weekly supply of issuances will jump raising questions over investors appetite.
10. Bombay High Court Grants Relief To MEP Infra
The Bombay High Court restrained ICICI Home Finance Ltd. from further selling shares of MEP Infrastructure Developers Ltd. offered as a collateral against a term loan by the road developer’s promoter group firm.
- The relief, however, is subject to timely payments of dues by Ideal Toll and Infrastructure Pvt. Ltd. as per the timelines prescribed by the court, according to the order by Justice AK Menon, who heard the case via video-conferencing.
- While prohibiting ICICI Home Finance from declaring Ideal Toll’s account as a non-performing asset till it commits a default, the court directed the company to deposit Rs 1.71 crore in installments and interest in a staggered manner before May 15.
The court, however, allowed the lender to sell the pledged shares if toll company defaults on making repayments.