BQuick On June 29: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Covid-19: Another Month Of Lockdown In Maharashtra
India struggled to flatten its Covid-19 curve as the pace of transmission of the highly contagious pathogen continues to escalate in the world’s fourth-worst affected nation.
- India added over 19,000 new cases of the novel coronavirus, taking the total tally to 5,48,318 in the world’s second-most populous country, according to the Health Ministry’s update as of 8 a.m. on June 29.
- This includes 16,475 deaths and 3,21,723 patients who have recovered.
- Despite an improved daily recovery rate of over 10,000 in eight of the past 10 days, the number of active cases in India now stands at 2,10,120.
- Maharashtra government has further extended the lockdown in the entire state till the midnight of July 31, according to the order issued by the Chief Secretary.
- Delhi government has decided to start a ‘Plasma Bank’ for the treatment of patients.
Track news and developments around the Covid-19 pandemic in India here.
Deaths from the coronavirus surpassed 5 lakh worldwide and confirmed cases exceeded 1 crore as the World Health Organization reported the most infections for a single day.
- Tokyo reported more incidences of the disease, daily deaths in Iran reached a record and cases in Austria rose to the highest level since mid-May.
- Texas is fast becoming the new centre of the pandemic in the U.S.
Follow the global spread of the virus here.
2. RBI Brings Back 'Operation Twist'
The Reserve Bank of India will conduct simultaneously sales and purchases of government securities under its open market operation programme.
- Dubbed as ‘operation twist’, the move is intended to push up shorter-term interest rates, while pushing down long-term rates.
- The RBI will buy Rs 10,000 crore in longer-dated government bonds, while selling an equivalent amount in shorter-dated treasury bills, the central bank said on Monday.
- The auction will be conducted on July 2.
Find out the government securities that the RBI will buy and sell.
3. Nifty Drops, S&P 500 Rebounds
Indian stocks dropped on concern that increasing coronavirus infections and the extension of restrictive measures in some states will hinder a recovery in Asia’s third-biggest economy, which has just begun to reopen.
- The S&P BSE Sensex fell 0.6% while the NSE Nifty 50 Index dropped 0.7%.
- Both measures pared earlier losses of as much as 1.5% and remain set for only their second month of gains this year and best quarter since 2009.
- Seventeen of 19 sector sub-indexes compiled by BSE Ltd. retreated, led by gauges of real estate and metal stocks.
Follow the day’s trading action here.
U.S. stocks rose after better-than-estimated economic data offset concern over an increase coranavirus cases.
- The S&P 500 erased losses after data showed U.S. pending home sales posted a record gain, exceeding all forecasts.
- A surge in Boeing Co. lifted the Dow Jones Industrial Average after U.S. aviation regulators said they’d approved a critical set of test flights on the 737 Max.
- The tech-heavy Nasdaq underperformed as Facebook Inc. tumbled after more businesses, including Starbucks Corp. and Diageo Plc, joined the growing number of brands planning to halt spending on social media.
- West Texas Intermediate crude rose 1.4% to $39.01 a barrel.
Get your daily fix of global markets here.
4. Ravi Dharamshi Counters ‘Bubble’ Narrative
The growing concerns within a segment of the market that India’s quality stocks are getting into a bubble zone is a wrong narrative, according to Ravi Dharamshi, founder and managing director of ValueQuest Investment Advisors.
“Can we have some sort of a pullback because it has gone up to fast? For sure it will, but if my hypothesis is correct that Covid-19 will only accentuate the current trends, then there’s possibility of few more years of growth left in these companies,” Dharamshi told BloombergQuint in an interview.
You cannot make the case for a huge capital erosion in these companies even at these times.Ravi Dharamshi, MD, ValueQuest Investment Advisors
The conversation, instead, is about how any company that shows signs of growth in this liquidity awash world will get higher and higher valuation, he said.
Dharamshi said investors are making a fundamental mistake.
5. Tata Steel’s Rs 1,096-Crore Loss
Tata Steel Ltd. reported a wider-than-expected loss as prices of steel fell and the company accounted for impairment due to Covid-19.
- Consolidated net loss stood at Rs 1,096 crore compared with a profit of Rs 2,430.9 crore in the same quarter a year ago, according to its exchange filing. Analysts tracked by Bloomberg had pegged a loss of Rs 91 crore.
- The steelmaker made a one-time provision of Rs 3,141 crore for the impairment of non-current assets that led to the higher loss.
- Revenue fell 20.4% year-on-year to Rs 33,769 crore—in line with the estimated Rs 33,774 crore.
Read more to see how lockdowns across the globe hurt prices.
6. Goldman’s Advice To India Inc.
Goldman Sachs Group Inc. is telling clients in India to fortify their balance sheets to prepare for the uncertainty brought by the coronavirus pandemic.
- “Currently, liquidity is the biggest theme among Indian businesses, and we are advising our clients to raise capital,” Sonjoy Chatterjee, the bank’s chairman and chief executive officer for India, said in a phone interview.
- The Wall Street bank has arranged some of India’s biggest equity offerings this year, according to data compiled by Bloomberg.
- The share sales include telecommunications carrier Bharti Airtel Ltd. as well as lender Kotak Mahindra Ltd., controlled by Asia’s richest banker Uday Kotak.
- Some of those funds will be needed to outlast the inevitable downturn.
The longer-term question is how companies should think about investing for growth, when it returns.
7. Downside Of Holding Chinese Imports At Ports
Stopping imports from China at domestic ports will lead to losses for those Indian businesses that placed orders prior to border clashes, according to Nitin Gadkari, Union minister for micro, small and medium industries.
- The MSME Ministry is actively working with the finance and commerce ministries to resolve this issue, Gadkari said in an interview to Quintillion Media.
- Indian entrepreneurs placed import orders with Chinese companies through letters of credit and other mechanisms before the border clashes arose, he said.
- As such, goods may take more than a month’s time to arrive in India and local businesses will suffer if goods remain stuck or are returned because they originated in China, Gadkari said.
The government, Gadkari said, can think of imposing restriction or duties on future imports.
8. States That Will Be Hit Most In The Covid World
The Covid-19 pandemic will have varying impact across states. This will depend not just on the extent of the virus' spread but also on the composition of the economy of each state.
- Since agricultural activities were less impacted, the states having a higher share of agriculture are expected to have suffered less compared to those where the share is low, according to India Ratings & Research.
- Also, services such as banking and financial services, IT & IT-enabled services were less impacted.
- As such, the states in which the share of these services is high are expected to have suffered less during the lockdown compared to those where share of these services is low, the rating agency said in a note on Monday.
- Overall, the Indian economy is seen contracting by 5.3%, it said.
Find out the worst and least hit states in India.
9. Attack On Pakistan Stock Exchange
Pakistani security officials killed four gunmen in Karachi as they tried to storm the stock exchange building with automatic rifles and grenades, the worst terror attack in the nation’s financial hub in two years.
- The attackers were not able to enter the main compound, Farrukh Khan, chief executive officer of the exchange said by phone.
- Balochistan Liberation Army claimed responsibility for the attack, Associated Press reported.
- Authorities haven’t yet confirmed if the group, which wants independence from Pakistan for Balochistan, an energy-rich province, was involved.
The militant group has been attacking businesses seen close to China since it started building a road connecting Gwadar port to Xinjiang province.
10. Tesla’s Extraordinary Decade
Tesla Inc. has grown from Silicon Valley gadfly to the world’s second-largest automaker by market capitalization in the decade since its initial public offering.
- On June 29, 2010, Tesla made its debut as a public company -- the first initial public offering of a domestic automaker in a half century.
- The IPO price was $17 a share. Chief Executive Officer Elon Musk rang the Nasdaq opening bell, and the company’s lone electric car, the $109,000 Roadster, was on display in Times Square.
- “There’s always a lot of drama with Tesla, but they have spurred the auto industry on to embrace electrification as key to the future of mobility,” said Tony Posawatz, the former leader of General Motors Co.’s Volt plug-in hybrid program, ex-CEO of Fisker and current director at Lucid Motors Inc.
Here are the 10 key moments that shaped Tesla’s extraordinary decade.