BQuick On June 12: Top 10 Stories In Under 10 Minutes  

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

1. Covid-19: India Overtakes U.K.; Maharashtra Crosses 1-Lakh Cases Mark

Covid-19 infections neared the 3-lakh mark even as the authorities maintained that India has not reached the community transmission stage.

• The country’s total cases have surpassed that of U.K.’s, making it the fourth most infected in the world.
• India added 10,956 fresh cases in the 24 hours, according to the Health Ministry’s 8 a.m., taking the total tally to 2,97,535.
• This was the deadliest day for India, while fresh cases crossed 10,000 for the first time.
• Maharashtra reported 3,493 new cases taking its total tally to 1,01,141, becoming the first state to cross the 1-lakh threshold. Total deaths stood at 3,717, as per the state health ministry’s evening update.

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

Globally cases crossed 75 lakh with deaths exceeding 4.2 lakh.

• European Union will tap a $2.3 billion emergency pot to fund vaccine development and seek deals with pharmaceutical companies to secure a protective shot.
• A study in Germany showed that masks could reduce the growth rate of infections by 40%.
• China’s leading coronavirus vaccine developer signed an agreement with a research center in Brazil to conduct further testing.

Follow the global spread of the virus here.

2. Historic Plunge In Industrial Activity

India’s industrial output contracted the most in over two decades in April after the world’s biggest lockdown to contain the new coronavirus pandemic froze economic activity.

• The Index of Industrial Production contracted 55.5% year-on-year in April, the most since at least 1996, according to the government’s statistical office release.
• That compares with a contraction of 16.7% in March.
• A majority of industrial sectors were not operating after the nationwide lockdown was imposed, effective March 25.
• That impacted items being produced during April. A number of responding units even reported nil production, the statement said.
• These estimates will undergo revision in subsequent releases.

Among the three key sectors, manufacturing was the worst hit.

India’s retail food inflation cooled in May as supply-side disruptions eased with the economic activity resuming gradually.

• Food and beverage inflation stood at 7.4% in May compared to 8.6% in April.
• The consumer food price index, which includes pan, tobacco and intoxicants, rose by 9.28%.
• Due to data collection issues, the department didn’t release the headline CPI inflation data for April and May.

Read the inflation internals here.

3. India’s Forex Reserves Cross $500 Billion

India’s foreign exchange reserves have soared past half a trillion dollars, helped by a rebound in equity flows and foreign direct investment deals.

• Forex exchange reserves rose to $501.7 billion for the week ended June 5, up by $8.22 billion. This is the highest level of forex reserves India has ever held.
• After a bout of outflows in March and April, foreign investors have turned net buyers of Indian equities, although they remain sellers of Indian debt.
• FPIs bought Rs 14,569 crore in equities in May and another Rs 22,175 crore in June.

Since the taper tantrum of 2013, forex reserves have close to doubled.

4. RBI To Revisit Private Bank Ownership Norms

The Reserve Bank of India has set up an internal working group to review existing guidelines on ownership of private banks and their corporate structure. The five-member working group will be set up under the leadership of Prasanna Kumar Gupta, director, Central Board of the Reserve Bank.

• According to the central bank it had first released detailed guidelines in the matter in February 2005, after which, specific prescriptions were given out as part of licensing guidelines issued at various points in the past.
• In a statement, the banking regulator said that the group will examine and review the existing licensing and regulatory guidelines relating to ownership and control, promoters’ holding, requirement of dilution, control and voting rights, among other things.

Additionally, the rules governing most recently issued bank licences differ from those that were prevailing in earlier year

5. Nifty, S&P 500 Rebound

Indian equity markets rebounded sharply from the lows of the day, to end with gains, near the highest point of the day. However, the surge was not enough to prevent losses on a weekly basis.

• The S&P BSE Sensex ended 0.72% higher at 33,780. The index recovered 1,432 points from the day's low of 32,348.
• The NSE Nifty 50 index too ended with gains of 0.72% but failed to cross the 10,000 mark. The index ended at 9,972 - with a recovery of 430 points from the day's low of 9,544.
• Both benchmarks snapped a two-week gaining streak.

Follow the day’s trading action here.

U.S. stocks rebounded from the biggest rout in 12 weeks as dip-buyers emerged for companies that bore the brunt of Thursday’s selling. Treasuries and the dollar fell.

• The S&P 500 trimmed its weekly slide, led by commodity, industrial and financial shares.
• Cruise operators and air carriers that were among the hardest-hit during the rout soared.
• West Texas Intermediate crude advanced 0.7% to $36.60 a barrel.

Get your daily fix of global markets here.

6. To Ban Crypto Or Not?

India moved a step closer to ban private cryptocurrencies as it plans to introduce a law to end regulatory uncertainty after the Supreme Court struck down the central bank’s curbs on trading in digital tokens like bitcoin.

• A cabinet note seeks a ban on the use of cryptocurrencies through a law which would be similar to the one suggested by a panel headed by former Economic Affairs Secretary Subhash Chandra Garg, according to a government official who didn’t want to be identified. The note seeks comments from departments.
• Once the departments offer their views, the Finance Ministry would introduce the bill in Parliament, the official cited earlier said.
• There would still be scope for the RBI to introduce its own cryptocurrency or digital rupee, he said.

Digital currency trading platforms, however, said an outright ban will be counterproductive.

7. How M&M, Hindalco And Eicher Fared In Q4

Mahindra & Mahindra Ltd. suffered a loss in the quarter ended March on account of a one-time impairment.

• The company’s net loss stood at Rs 3,255 crore compared with a profit of Rs 969 crore in the year-ago period.
• The automaker reported a one-time impairment of Rs 3,577.64 crore, according to an exchange filing.
• The exceptional item pertains to provisioning for certain long-term investments.

Still, sales volume slumped while operating income was hit during the quarter.

Hindalco Industries Ltd. reported a sharp jump in profit in the quarter ended March but its revenue dropped.

• Standalone net profit rose 38% year-on-year to Rs 326 crore, the company said in a statement.
• This has been adjusted for an impairment on financial assets amounting to Rs 22 crore.
• Revenue, however, fell 19.2% to Rs 9,992 crore as sales of copper and aluminium declined.

Find out how a reduction in costs helped margin.

Eicher Motors Ltd.’s quarterly profit fell as the nationwide lockdown that was imposed to contain the Covid-19 outbreak battered its already slowing sales.

• Net profit of the maker of Royal Enfield motorcycles fell 44% year-on-year to Rs 304.3 crore.
• Sales fell by a fifth over the year-ago period during the three months ended March.
• Margin narrowed for the eighth straight quarter.

The company remains confident of a revival. Here’s why.

8. GST Council's Decisions

Small businesses won’t have to pay late fee and will be charged interest at half the rate for filing past returns after the extended deadline. And they also got more time to make the latest filings.

• Businesses with a turnover of up to Rs 5 crore can file tax returns for May-July till September in a staggered manner.
• No late fee or interest will be charged if the summary GSTR-3B returns are filed by September.
• The Council also accepted the long-pending demand to waive late filing fee for returns not filed since July 2017 when the new indirect tax regime was rolled out.
• It also approved a one-time extension for businesses to revoke cancellation of their GST registration.

The decisions of the GST Council are aimed at easing burden of businesses facing hurdles because of the Covid-19 crisis.

9. Ashok Soota Returns With An IPO

Happiest Minds Technologies Ltd. has taken the first step to go public.

• The mid-sized information technology company, founded by Ashok Soota in 2011, has filed a draft red herring prospectus with the Securities and Exchange Board of India for an initial public offering.
• The proposed IPO comprises a fresh issue of shares worth Rs 110 crore and an offer for sale of 3.56 crore by promoter Soota and investor JPMorgan’s private equity entity CMDB II, according to the DRHP.
• While Soota—also co-founder of Mindtree Ltd.—is planning to pare 6% of his holding in the company, JPMorgan is looking to exit fully.

Find out what the company will use the funds raised for.

10. SBI Chief’s Restructuring Optimism

The chairman of India’s largest lender expects fresh requests for restructuring to come only in September as the central bank has granted time to the banking sector to manage asset quality concerns.

• That may not be a big concern for State Bank of India as fewer accounts are likely to default this year and legacy issues have already been provided for, Rajnish Kumar told BloombergQuint in an interview.
• The bank also expects fewer corporate loan accounts to not pay dues after Aug. 31, when the RBI’s loan repayment moratorium ends, he said, adding this would ensure its balance sheet is protected.
• The bank expects loans worth Rs 23,000 crore to be resolved during this fiscal.

Kumar expects interest rates to fall further as India’s in a softer interest rate scenario with negligible inflation.