BQuick On March 24: Top 10 Stories In Under 10 Minutes

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

1. India Under Lockdown For 21 Days To Contain Covid-19

Prime Minister Narendra Modi has imposed a three-week long nationwide lockdown in India to help contain the spread of coronavirus infections, allocating an extra $1.97 billion for healthcare.

“If we listen to the health experts we know that 21 days are crucial to break the cycle of transmission,” Modi said in his televised address to the nation on Thursday. “For a few days forget what it means to go out. Today’s decision of a nationwide lockdown draws a line outside your home.”

India is struggling to contain the economic and health fallout of the spreading coronavirus outbreak that has so far infected 519 in India and killed 10 people.

Follow developments around the coronavirus outbreak in India here.

The central government has initiated a process to release nearly Rs 52,000 crore as a short-term relief to construction workers across the country.

• The widening local spread of the coronavirus and lockdowns announced across a number of key states have brought construction activity to a halt, hurting daily wage earners who work in the sector.
• According to government estimates, close to 5.1 crore workers are employed in the construction sector across segments like infrastructure and real estate.

The labour ministry has advised states to transfer adequate funds via the direct benefit transfer mode.

2. Sitharaman Looks To Ease Compliance Burden Amid Outbreak

Meanwhile, Finance Minister Nirmala Sitharaman unveiled a series of steps to ease the regulatory and compliance burden for Indian industry which is staring at a significant business hit due to the coronavirus.

• Deadline for filing income tax and GST returns has been extended to June 30.
• No late fee or penalty will be charged for companies with a turnover Rs 5 crore or lower that file GST late.
• Those with a turnover of more than Rs 5 crore, will pay a reduced interest rate of 9 percent.
• Even the due date to pay pending central and excise duties has been extended to June 30 from April 30.

The finance ministry will issue circulars and make necessary amendments in order to implement the announcements.

Sitharaman has also increased the threshold for default under the Insolvency and Bankruptcy Code.

• So far, an insolvency resolution process could be initiated for a default of more than Rs 1 lakh. This has been increased to Rs 1 crore.
• This was done to avoid large-scale insolvencies as a result of financial stress caused by Covid-19 disruption.

Here's why experts are concerned about this move.

India also relaxed the mandatory requirement to hold board meetings, among other regulatory and compliance relief measures, amid the coronavirus pandemic.

• The government has offered a relaxation of 60 days to firms that have to mandatorily hold board meetings according to provisions of the Companies Act, 2013.
• Also, the Companies Act provision that mandates newly incorporated companies to make a declaration for commencement of business within six months has now been extended to an additional six months, she said.
• Besides, it waived the requirement for directors of a company to be in India for a minimum of 182 days in a year.

Here are the other corporate relief measures announced by Sitharaman.

Finance Minister Nirmala Sitharaman on Tuesday waived minimum bank charges for savings bank accounts to help citizens deal with the lockdown due to the coronavirus crisis.

• No penalty will be charged for breaching the minimum balance.
• For the next three months, debit card holders can withdraw cash from any other bank’s ATM without charge.
• Bank charges are being reduced for digital transactions.

These measures have been brought in to ensure people don't venture out.

3. U.S. May Become New Hub Of Outbreak, Olympics Postponed

The number of coronavirus cases in the world topped top 3,87,000, while the death toll crossed 16,700, according to data compiled by Johns Hopkins University.

• The U.S. could become a new hub of the outbreak, the World Health Organization warned, even as President Donald Trump declared that the American economy “was not built to be shut down.”

• Japanese Prime Minister Shinzo Abe and the leader of the International Olympic Committee agreed to the unprecedented move to delay the Tokyo Olympics by about one year due to worries of holding the event during the coronavirus pandemic.

Wuhan To Come Out Of Lockdown

China’s Hubei province said it will allow transportation to resume for the city of Wuhan on April 8, effectively lifting a mass quarantine over the city where the coronavirus first emerged last December.

• People in Wuhan will be allowed to leave the city and Hubei province, according to a statement on the provincial government’s website Tuesday.
• The easing of restrictions comes as Hubei reported that new infections dropped to zero on March 19, a dramatic plunge from the height of an epidemic that’s infected more than 80,000 Chinese and killed over 3,200.

Chinese officials have been moving to ease the quarantine in steps as new cases dropped toward zero.

4. Sensex Overcomes Volatility, U.S. Stocks Rally

Indian equity markets ended the trading session with gains, though off the highest point of the day, tracking positive cues from European markets and U.S. futures.

• The S&P BSE Sensex ended 2.67 percent higher at 26,674, with gains of almost 700 points.
• Nineteen out of the 30 stocks ended the session with gains.
• The NSE Nifty 50 index ended with gains of 2.51 percent at 7,801.
• 35 out of the 50 constituents ended with gains while 17 of them ended at 52-week lows.
• All sectoral indices barring the Nifty Realty index ended with gains.
• The Indian rupee, which closed at an all-time low yesterday, gained 0.25 percent today closing at 76.1 against the U.S. dollar.

Follow the day’s trading action here.

U.S. stocks rallied more than 5 percent as investors rediscovered some appetite for risk with Congress looking close to an unprecedented spending bill to prop up the slumping economy.

• The S&P 500 rebounded from the lowest level since 2016, and is poised to notch a third straight Tuesday turnaround after starting the week with a rout.
• Senators are negotiating the final sticking points in a roughly $2 trillion stimulus bill to help the U.S. economy get through the coronavirus pandemic, and House Speaker Nancy Pelosi said she was hopeful a deal could be reached today.
• Still, key gauges of U.S. manufacturing and services in March fell the most on record, suggesting the deep toll the pandemic has already taken.
• The dollar halted a 10-day rally.
• Gold increased 3.2 percent to $1,602.27.42 an ounce.

Get your daily fix of global markets here.

5. Step In Now And Mix It Up, Says Raamdeo Agrawal

It’s a buyer’s market, a good time for investors to start nibbling at equities, according to veteran stock picker Raamdeo Agrawal.

• Unfortunately, the asset manager’s cash is fully deployed but for those who have managed to keep some aside “this is a good time to step in”, Agrawal, chairman of Motilal Oswal Financial Services, said in an interview.
• But he cautions further correction cannot be ruled out.
• “No one can get the bottom, absolutely... Staggering your bets is the only way you can get some kind of a sensible entry into the market,” Agrawal said.

For those brave enough to enter, Agrawal has one advice.

6. Cracks Appear In India’s Bond Market

The Indian debt markets are showing signs of strain due to a risk averse environment, coupled with year-end redemption pressures faced by mutual funds and continued selling by foreign investors.

• These signs are showing up in different parts of the money markets.
• The interest rates offered for borrowing overnight money have crashed as funds and corporate treasuries have moved into cash.
• Corporate bond yields are rising as funds sell out of these securities to meet redemption pressures.
• Volumes in government bond markets have fallen — there was no trade for the first 32 minutes today — due to logistical troubles brought on by curfews and a disconnect on which way rates are headed.

Here’s what these signs mean for bond markets which have started cracking under the strain of the Covid-19 pandemic.

7. The Foundations Of India’s Economic Recovery Are In Place

Amid the Coronavirus-driven mayhem, all the ingredients are now in place for a sustained recovery in Indian earnings growth, writes Saurabh Mukherjea.

• India has never witnessed an economic recovery without a U.S. recession preceding it!
• Now, all three conditions – a U.S. recession, smashed crude prices, and falling U.S. government bond yields – are in place.
• In addition, two key domestic reforms have also set the scene for a select few companies to benefit from rapid formalisation.

Read more.

8. How Covid-19 May Hit Banks, Airlines And Jewellers

Faced with lockdowns across most states and key businesses, India’s banks are bracing for a decline in collections and increased demand for working capital from borrowers.

• Over the last few days, as the number of Covid-19 cases in India have risen, restrictions have become stricter, leading to sharp drop in business across a number of industries.
• According to three senior bankers, who spoke to BloombergQuint on the condition of anonymity, lenders are currently in talks with borrowers to understand their needs and provide any kind of support they can.

Here are the steps various public and private lenders are assessing to tide over the pain.

IndiGo, operated by InterGlobe Aviation Ltd. and SpiceJet Ltd. are among the worst-hit airlines as the coronavirus pandemic ravages travel demand.

• The government-ordered suspension of all domestic flights starting midnight of March 24, albeit for public health reasons, will hurt business further.
• ICICI Securities estimates that IndiGo and SpiceJet may report losses worth Rs 5,494 crore and Rs 1,412 crore, respectively, in the quarter ended June if there is a complete business shutdown.

Still, if operations normalise from the second quarter the airlines would be able to recoup most of their losses. Here’s how.

India’s sales of gold jewellery to bars are set to plunge to the lowest in a quarter of a century as a lockdown to combat the rapidly spreading coronavirus brings the industry to a standstill.

• Demand in the world’s second-biggest gold consumer has already tumbled, slammed by record-high domestic prices and an economy headed for the slowest pace of growth in 11 years.
• That pain is set to deepen as the virus spooks buyers and jewellery stores shutter their India imposed an almost-complete lockdown across much of the country.

Total purchases could fall by a third, the lowest since 1995.

Related Coverage

• India has enough food to feed poor amid prolonged shutdown fears.
• Indian property developers vow to feed labourers amid lockdown.
• Coronavirus stalls cement rebound, worst may be yet to come.
• IndiGo says no salary deduction for employees due to domestic flights suspension.
• Netflix to reduce traffic on telecom networks by 25 percent.

9. U.S. SEC Concludes Infosys Whistleblower Probe

Shares of Infosys Ltd. jumped in trade today after the software services provider said the U.S. market regulator had concluded its investigation into the company regarding it most recent whistleblower charges.

• “The company does not anticipate any further action by the U.S. SEC on this matter,” Infosys said in an exchange filing.
• The company has and will continue cooperating with Indian authorities in answering any questions if the need arises, the filing said.

Infosys shares surged as much as 15 percent in an otherwise volatile market.

10. Omar Abdullah Released From Detention After Eight Months

Former Jammu and Kashmir Chief Minister Omar Abdullah was on Tuesday freed after eight months in detention after the union territory’s administration revoked the Public Safety Act against him.

• A swarm of media personnel and supporters, many of them in masks, waited for him outside his residence after he was released from house arrest.
• The National Conference leader, who turned 50 on March 10, was under detention since August 5, when the Centre announced the revocation of Jammu & Kashmir's special status under Article 370 and its bifurcation into union territories of J&K and Ladakh.

‘It’s a very different world today to the one that existed on 5th August 2019’