BQuick On June 1: Top 10 Stories In Under 10 Minutes  
A taxi travels along an empty road during a lockdown imposed due to the coronavirus in Mumbai, India (Photographer: Dhiraj Singh/Bloomberg )

BQuick On June 1: Top 10 Stories In Under 10 Minutes  

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

1. India Downgraded

Moody’s Investors Service has downgraded India’s sovereign rating by one notch citing concerns about a prolonged period of slow growth.

  • While the Covid-19 pandemic has worsened economic conditions in India, it is not the sole cause for the downgrade, Moody’s said in its release, adding that the outlook on India’s rating remains negative.
  • Moody’s Investors Service had the highest rating on India, having upgraded it in 2017. Fitch Ratings and Standard and Poor’s rate India one notch below Moody’s.
  • Following the review, Moody’s rating on India stands revised to Baa3 from Baa2, with a negative outlook. It still remains investment grade.
The decision to downgrade India’s ratings reflects Moody’s view that the country’s policymaking institutions will be challenged in enacting and implementing policies which effectively mitigate the risks of a sustained period of relatively low growth, significant further deterioration in the general government fiscal position and stress in the financial sector.
Moody’s Investors Service

Moody’s expects India’s real GDP to contract by 4% in FY21.

Also read: India’s Budget Target Breach Signals Further Blowout This Year

2. India Hikes Minimum Support Prices For Key Kharif Crops

The Indian government has decided to increase the minimum support prices of kharif crops for the current year to provide relief to the farm sector amid disruptions caused by the Covid-19 pandemic.

  • After a cabinet meeting on Monday, Minister of Rural Development and Agriculture Narendra Singh Tomar said the government has decided to revise the minimum support prices for 14 kharif crops based on the formula by the commission for agricultural costs and prices.
  • The return over cost for these 14 crops ranges from 50% to 83%, the minister said.
  • In another decision intended to help the farm sector, the government has extended repayment date up to Aug. 31, 2020 from May 31, 2020, for all short-term loans to farmers of up to Rs 3 lakh.
  • The decision to extend the deadline for repayment was taken as farmers are not able to travel to bank branches for payment of their short-term crop loan dues.

Find out which crops will fetch farmers a higher price and how large the hike is.

Also read: India Manufacturing PMI Contracts For Second Straight Month

3. Another Cyclone Approaches India; Normal Monsoon Expected

The southwest monsoon has hit Kerala, marking the commencement of the four-month long rainfall season, the India Meteorological Department said on Monday. The IMD has retained its forecast for normal monsoon in India this year at 102% of long-period average.

  • The Met Department has also issued a warning for a cyclonic storm brewing in the Arabian Sea.
  • Expect heavy to very heavy rainfall in coastal areas of Maharashtra on June 3 as cyclone Nisarga advances over the Arabian Sea.
  • The cyclonic storm could make landfall near the border of Gujarat and Maharashtra around Vapi on Wednesday.
  • IMD predicts heavy to very rainfall in districts including Sindhudurg, Ratnagiri, Thane, Raigad, Mumbai and Palghar.

IMD has also issued warnings for Kerala, Goa, Gujarat and Maharashtra.

4. Sensex, Nifty Rise 2.5%

Indian equities managed to hold on to the momentum from early trade to register strong gains on the first trading day of the week and the month.

  • The S&P BSE Sensex ended 2.7% higher, marginally off the highest point of the day at 33,303.
  • The NSE Nifty 50 index too ended with gains of 2.6% at 9,826. 40 out of the 50 Nifty constituents ended with gains.
  • All sectoral indices ended with gains, including the Nifty Pharma index, which pared losses to end 0.4% higher.
  • The Nifty PSU Bank index was the top performer of the day, ending 7.5% higher.

Follow the day’s trading action here.

Also read: RIL Rights Issue Gets Fully Subscribed Two Days Ahead Of Closing

U.S. stocks edged higher as investors focused on signs of economic recovery amid further tension with China, lackluster virus drug-test results and the threat of further civil unrest in America.

  • The S&P 500 Index eked out a small gain, with the tech-heavy Nasdaq Composite outperforming.
  • Stocks had dipped earlier after Chinese government officials told agricultural companies to pause purchases of some American farm goods including soybeans, threatening a hard won trade deal.
  • Gilead Sciences Inc. fell after its drug remdesivir showed only a limited benefit in a large trial.
  • West Texas Intermediate crude declined 2.1% to $34.72 a barrel.

Get your daily fix of global markets here.

5. Auto Makers Struggle

After zero sales in April, Indian automakers opted for selling cars online as the coronavirus-led lockdown kept most dealerships shut for the second month in a row.

  • The automakers made a cautious return to production in May after the stay-at-home restrictions were eased to spur economic activity.
  • Exports continued but they form a small part of the sales for most Indian automakers.
  • Maruti Suzuki reported a 86% decline in total sales with the company selling 18,539 cars.
  • Sales of Mahindra & Mahindra Ltd.'s auto division fell 79%, while tractor sales rose 2%.
  • Hero Motocorp sold 1.12 lakh units in May—a decline of 83%.

See how major Indian automakers fared here.

Also read: Cars And Tractors See Uptick Even As Retail Auto Sales Contract For Second Straight Month

6. Uday Kotak's $900-Million Share Sale

Uday Kotak is seeking to raise as much as 69.4 billion rupees ($919 million) in a share sale of Kotak Mahindra Bank Ltd. as the billionaire seeks to cut his ownership in the lender he founded to comply with central bank regulations.

  • Kotak is selling as many as 5.6 crore shares of the bank for Rs 1,215 to Rs 1,240 each, according to terms of the deal seen by Bloomberg News.
  • The price range represents a discount of 0.7% to 2.7% to the closing price on Monday.
  • His holdings will reduce to 26.1% from 28.93% after the sale.

This comes after the bank founder struck an agreement with RBI to close an over decade-long tussle on ownership rights.

7. ‘Known Devil And Unknown Ghost’: Tough Choice For Franklin Investors

Looking to repay unitholders of six debt schemes it wound up, Franklin Templeton Mutual Fund has offered investors two options: either let its trustee monetise assets or hire a third party to conduct the process.

  • The choice is between Deloitte Touche Tohmatsu LLP, a liquidation and restructuring firm, and the trustee appointed by the asset manager, according to a notice by Franklin Templeton.
  • Investors of the six schemes will have the three-day window, according to the process disclosed by Franklin Templeton.
  • Unitholders can either allow or reject the plan put forward by Franklin Templeton to monetise assets.

Find out why there is little choice on offer for investors.

8. Covid-19: India Now Seventh Most Infected Country

Total Covid-19 cases in the country have topped 1.9 lakh -- surpassing France and Germany -- at a time when India plans to lift the lockdown in a staggered manner.

  • That includes 8,392 cases added in the 24 hours preceding the Health Ministry’s 8 a.m. update on June 1.
  • Authorities reported 230 deaths and 4,835 recoveries during the same time period.
  • This brings the total death toll to 5,394 people and total recoveries to 91,819.
  • India still has more than 93,000 active cases.
  • This was the fourth straight day of fresh Covid-19 cases hitting new highs.

Track news and developments around the Covid-19 pandemic in India here.

Globally, total cases have topped 6.1 million with more than 371,000 dead.

  • Wuhan’s push to break hidden virus transmission chains through aggressive testing appears to have succeeded, as no new asymptomatic cases were found for the first time in two months.
  • Russia is preparing to provide hospitals with a coronavirus drug developed with the sovereign wealth fund’s backing after gaining initial approval from the Health Ministry.

Follow the global spread of the virus here.

Related Coverage

9. Digital Payments In India Rebound

Transactions across digital payment platforms rebounded in May after falling significantly a month earlier.

  • Data released by the National Payments Corporation of India on Monday on Twitter shows a resurgence in the use of digital payments as consumers have been shying away from cash owing to fears around the transmission of the Covid-19 virus through currency notes.
  • While all digital payment platforms witnessed a rise in transactions in May, the total value of transactions are still below their historical highs.
  • The value of transactions on the Unified Payments Interface grew 45% over the previous month to Rs 2.18 lakh crore in May.

Find out how other payment methods regained growth in May.

10. Flipkart’s Food Delivery Plans Go For A Toss

Flipkart Group said India has rejected Walmart-owned online retailer’s plan to sell food, fruits and vegetables through a new local unit.

  • The Department for Promotion of Industry and Internal Trade last week rejected the proposal, Flipkart said in a statement.
  • While the company didn’t give details, a person familiar with the government memo said the department cited regulatory issues without elaborating.
  • The online retailer was late to enter the grocery segment and planned to launch FarmerMart for its second foray into fresh food retailing.

Rivals Amazon, Big Basket and Grofers have already secured approval that permitted FDI in food retail.

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