BQuick On May 14: Top 10 Stories In Under 10 Minutes

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

1. Finance Minister’s Relief Measures—Round 2

Finance Minister Nirmala Sitharaman unveiled Thursday the second tranche of India’s Rs 20-lakh-crore Covid-19 relief package, with a focus on migrant workers, farmers and urban poor. Wednesday’s announcements focused on small businesses, non-bank lenders and the power sector.

Out of the Rs 20 lakh crore, measures worth Rs 15.57 lakh crore have now been unveiled, including the Rs 7.09 lakh worth of stimulus previously announced by the Reserve Bank of India and the finance ministry.

• The minister announced free food grain supply for two months for those migrants that are neither covered under National Food Security Act, 2013 or hold a state beneficiary card.
• A new scheme has been proposed to provide affordable rental housing accommodation for migrant labourers.
• Technology systems are being put into place to enable usage of ration cards for procuring food at any fair price shop in India.
• Special loans of up to Rs 10,000 will be given to provide working capital for street vendors to restart business.
• An additional Rs 30,000 crore will be provided for crop loans through NABARD.
• Credit-linked subsidy scheme—that subsidizes interest rates on affordable home loans—for middle-income families has been extended till March 2021.

Here are more details on all the announcements made by the Finance Minister today.

2. There’s More Space For Monetary Policy Measures, Says Top Economic Advisor

India’s promised Rs 20 lakh crore economic package has to be designed while keeping in the mind the immediate needs but also the available policy space. And a lot of that space may lie in the realm of monetary policy.

• That’s according to Sanjeev Sanyal, principal economic adviser to India’s Finance Ministry, who believes India will have to use the resources available to it.
• “When we talk about an economic package, it is a mix of monetary and fiscal in every country depending on the space they have. Our space is much larger on the monetary side so we are utilising that,” he said in an interview to BloombergQuint.
• For now, the government is trying to ensure that immediate cash-flow disruptions faced by small businesses are tackled, Sanyal said.

Sanyal believes that market interest rates in India are still too high and the yield curve is to steep.

3. Eighth Straight Day Of Over 3,000 New Covid-19 Cases

Total number of confirmed coronavirus cases in India crossed 78,000 with over 2,500 dead, with just three days left before the imminent extension of the nationwide lockdown.

• India added 3,722 new Covid-19 cases over 24 hours, according to the Union Health Ministry’s 8:00 a.m. update on May 14.
• The total number of cases in India stands at 78,003.
• This includes 26,235 people who’ve recovered and 2,549 deaths.
• Authorities have now reported more than 3,000 fresh cases in each of the last eight days.
• The Indian Railways cancelled all old bookings for regular trains scheduled till June 30 and said it’d provide full refunds to passengers.
• However, the Shramik Special trains which started from May 1 and the special trains which started operations from May 12 will continue to operate.

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

Globally, cases crossed 43 lakh leaving over 2.97 lakh dead.

• Donald Trump said more than 1 lakh could die in the U.S., even as he disagreed with Anthony Fauci over the doctor’s warnings about reopening the country too quickly.
• Japanese Prime Minister Shinzo Abe will maintain a state of emergency for Tokyo and Osaka.
• Vaccines are “global public goods which belong to everybody around the world,” the World Health Organization said today.
• Spain reported 217 new coronavirus deaths in the last 24 hours, the biggest jump since May 8.

Follow the global spread of the virus here.

4. Sensex Falls 2.7%, Bonds Rally

Indian equity markets gave up all of Wednesday's gains to again turn negative for the week as investors seemed to be unenthused by the relief package announcements made on Wednesday.

• The S&P BSE Sensex ended 2.77 percent lower at 31,122 while the NSE Nifty 50 ended at 9,142, down 2.6 percent.
• Among sectoral indices, the I.T. index was the primary laggard, ending 3.6 percent lower.

Follow the day’s trading action here.

Sovereign bonds rose in India as traders estimated the cash outgo for the government from its Rs 20 lakh crore stimulus package may be less than previously feared.

• The yield on the most-traded 6.45 percent 2029 note dropped 10 basis points to 6 percent, extending Wednesday’s 7-basis point fall.
• The yield on the 7.57 percent 2033 debt, an auction bond for Friday, declined six basis points.

Bond traders are hoping that any further borrowing will be contained.

U.S. Stock Plunge Deepens

Stocks tumbled around the world as the drumbeat of poor economic data picked up and the U.S. stoked tensions with China.

• The global equity rout deepened, dragging the S&P 500 below the 2,800 level that has supported it over the past month.
• President Donald Trump said he doesn’t want to talk to his Chinese counterpart Xi Jinping right now and is “looking at” the Asian nation’s companies that trade on the NYSE and Nasdaq stock exchanges, but don’t follow U.S. accounting rules.
• Meanwhile, a bleak report on U.S. jobless claims added to evidence that the recession is severe. With the latest jobless numbers, a total of 36.5 million applications for unemployment insurance have been filed since the virus began shutting down businesses in mid-March.
• West Texas Intermediate crude increased 4 percent to $26.30 a barrel.

Get your daily fix of global markets here.

5. SEBI Eases Minimum Public Shareholding Norms

The market regulator directed bourses and depositories to not take any penal action against listed entities that fail to meet minimum public shareholding requirements, in a move aimed at easing such compliance rules amid the disruptions caused by the coronavirus pandemic.

• “After taking into consideration requests received from listed entities and industry bodies as well as considering the prevailing business and market conditions, it has been decided to grant relaxation from the applicability of the Oct. 10, 2017 circular,” the Securities and Exchange Board of India said in a statement.
• The norms are “relaxed for listed entities for whom the deadline to comply with minimum public shareholding requirement falls between the period from March 1, 2020 to Aug. 31, 2020”.

The regulator advised stock exchanges to not take any penal action against entities in case of non-compliance.

6. Where Jio Platforms Derives Its Value From

Reliance Industries Ltd.’s fund-raising blitz has revealed two things: its telecom assets now contribute half its market capitalisation, and most of that is derived from wireless, broadband and enterprise business of Reliance Jio Infocomm Ltd.

• In the last 20 days, India’s biggest company controlled by Asia’s richest man got investment commitments worth Rs 60,597 crore for 13.46 percent stake in Jio Platforms.
• These came from Facebook Inc., and private equity firms Silver Lake and Vista Equity Partners.
• Reliance disclosed that the Jio Platforms has an enterprise value of Rs 5.16 lakh crore. According to BloombergQuint calculations, nearly 98 percent of that comes from the telecom business.

Find out what is Jio Platforms and what contributes to its value.

7. Gartner’s Warning For The IT Sector

Gartner Inc. expects global tech spending to tumble this year as the new coronavirus pandemic froze economic activities.

• Worldwide IT spending is expected to decline 8 percent over last year to $3.4 trillion in 2020, the technology research and advisory firm said in a media statement.
• In 2019, demand for overall global IT spending grew 1 percent at $3.7 trillion.
• “The coronavirus pandemic and effects of the global economic recession are causing chief investing officers to prioritise spending on technology and services that are deemed ‘mission-critical’ over initiatives aimed at growth or transformation,” John-David Lovelock, vice-president at Gartner, said in the statement.

Here’s what it means for India’s IT sector.

8. Indian Air Force’s Make In India Pivot

India plans to switch to locally-made fighter jets, two years after asking global companies to submit proposals to supply 114 combat aircraft in the world’s biggest warplane contract.

• The country’s air force is finalising plans to induct indigenously made Light Combat Aircraft, Tejas to boost the capability of its aging combat aircraft fleet, Chief of Defence Staff Bipin Rawat said in an interview in New Delhi.
• It will buy an additional 83 jets, apart from an earlier deal for 40 aircraft, for $6 billion, he said.
• “The Indian Air Force is switching that to the LCA,” Rawat said, when asked about the global tender for jets. “The IAF is saying, I would rather take the indigenous fighter, it is good.”

The decision is a set back for the likes of Boeing Co., Lockheed Martin Corp. and Saab AB who were in the race for the $15 billion order.

9. Wholesale Prices Of Fuel And Power Contract

While wholesale prices of food articles continued to rise in April, prices of non-food, fuel and power contracted as all economic activity, barring essentials goods and services, stalled during the nationwide lockdown to contain the new coronavirus pandemic.

• The WPI food index rose 3.6 percent last month compared with an increase of 5.49 percent in March, according to a press statement released by the Ministry of Commerce and Industry.
• The fuel and power index contracted 10.12 percent against a contraction of 1.76 percent in the preceding month.
• Amid limited transaction of products in the wholesale market in April, the ministry did not release the data for the manufacturing index, which makes up 64.2 percent of the headline gauge.

Here’s what happened to wholesale food prices in April.

10. Vijay Mallya One Step Closer To Extradition

Former billionaire Vijay Mallya is one step closer to being forced to return to India to face fraud charges after a London court made further U.K. challenges to his extradition nearly impossible.

• Two judges said Thursday that the fallen tycoon’s case raises no issues of public interest, all but ruling out an appeal to the U.K. Supreme Court.
• The 64-year-old Mallya, who’s on bail, has lost a series of court challenges since 2018.

The self-proclaimed “King of Good Times” in India, was arrested in London in April 2017.