BQuick On May 18: Top 10 Stories In Under 10 Minutes

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

1. Covid-19: India’s Biggest One-Day Spike; Delhi’s New Lockdown Rules

The Covid-19 pandemic in India showed no signs of abating as the nation reported its biggest single-day spike in new infections.

• India added 5,242‬ new cases of coronavirus in 24 hours taking the total tally to 96,169, according to the health ministry’s 8 a.m. update.
• This includes 3,029 deaths and 36,824 patients who have recovered. And that’s just days day after India surpassed China’s total tally.
• Authorities also reported 2,715 recoveries and 157 deaths in the last 24 hours.
• With cases on the rise, the government has announced a third extension of the lockdown till May 31, albeit with easing of some restrictions with more flexibility to states.
• There are now four states with more than 10,000 cases in the country—Maharashtra, Gujarat, Tamil Nadu and Delhi.
• Mumbai, the city with the highest cases in India, has completed building a 1,000-bed temporary Covid-19 facility in the Bandra Kurla Complex area.
• Meanwhile, Delhi has allowed for movement of people. Cabs can carry two persons while rickshaws can only carry one passenger. On two-wheleers no pillion rider is allowed. Buses will also start functioning.
• India has supported a move at the World Health Organization with over 60 countries, pushing for an "impartial, independent and comprehensive" investigation into the origin of the virus.

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

Globally, cases topped 47 lakh with deaths crossing 3.15 lakh.

• China said it will make its coronavirus vaccine a global public good once one is available.
• An experimental vaccine from Moderna Inc. showed promising early signs that it can create an immune-system response in the body that could help fend off the virus.
• Iran reported the biggest increase in infections in six weeks.
• Indonesia ruled out immediate easing of lockdown as cases spiked again.

Follow the global spread of the virus here.

2. 'Aimless, Generic And A Lost Opportunity': AB Bernstein On Rs 20-Lakh Crore Package

India’s Rs 20-lakh-crore economic package to help bring the battered economy back to its feet after the Covid-19 pandemic, unveiled by Finance Minister Nirmala Sitharaman over the last five days, failed to impress analysts at global research firm AB Bernstein.

• “While the package started on important aspects, the need to announce measures that add up to this top down number made the entire package aimless, with several generic announcements which should ideally have been a part of a normal economic agenda,” analysts at AB Bernstein said in a strategy note.
• “Overall, we see it as a lost opportunity,” the report said.
• The package failed to make any substantial decisions that would support consumption and promote manufacturing—things that are needed with immediacy to revive the Indian economy, according to Bernstein analysts.

Even the broader reforms that have been announced lack “spark”.

Related Coverage

• India needs to grow its way back to a sustainable debt path.
• Government’s relief package ‘hopelessly inadequate’, says P Chidambaram.
• Goldman sees worst India recession with 45% second quarter slump.
• New thresholds will help reduce MSME debts, say experts.

3. Rupee, Stocks Fall As Investors Unimpressed By Modi’s Rescue Plan

India’s rupee declined the most in two weeks, and equities sank as investors were unimpressed by the government’s economic stimulus package.

• The rupee fell 0.4 percent to 75.9150 per dollar at the close in the third day of declines.
• The S&P BSE Sensex ended 3.44 percent lower at 30,028, while the NSE Nifty 50 ended at 8,823, down 3.32 percent.
• Forty four out of the 50 Nifty constituents ended with losses.
• Among sectoral indices, the Nifty Bank and the Nifty Media index ended with losses of over 6.5 percent.
• On the other hand, Nifty I.T. and Nifty Pharma outperformed, ending with modest gains.

Follow the day’s trading action here.

U.S. Stocks Jump Amid Vaccine, Reopening Optimism

U.S. stocks jumped to the highest levels in almost three weeks after promising early results for an experimental vaccine sparked speculation economies could snap back quickly.

• The S&P 500 surged more than 2.5 percent after Moderna Inc. said its vaccine tests yielded signs it can create an immune-system response in the body. Companies that would benefit from a return toward more normal economic activity rallied.
• Gold traded at its highest price in seven years before retreating.
• West Texas oil rose above $30 a barrel for the first time in two months as producers in the U.S. and elsewhere continued to cut activity.

Get your daily dose of global markets here.

4. Indian Debt Market Braces For A Wave Of Public Sector Borrowings

Even at the FY20 levels, public sector borrowings were in excess of the net household financial savings of about 7 percent, writes Ira Dugal.

• How well can the debt market absorb the surge in centre + state borrowing in FY21.
• As such, banking on a large support from foreign buyers is probably not prudent.
• Will private borrowers get crowded out?
  

This year, those dynamics could work in one of two ways.

6. PVR Won't Release Films Already Streamed On OTT Platforms

India’s largest multiple operator said it won’t screen any movie that is not exclusively released in theatres first as it looks to protect turf after at least two filmmakers sold rights to Amazon Prime during the Covid-19 lockdown.

• “The mutliplex association has requested all producers to delay the releases and we were hoping they will accede to our request,” Kamal Gyanchandani, chief executive officer at PVR Ltd., said in a conference call, expressing disappointment over producers choosing over-the-top platforms.
• “We won't be playing a film which is already released on a streaming platform.”
• Multiplexes, along with hotels and airlines, are among the worst-hit businesses as stay-at-home orders to counter the new coronavirus outbreak froze operations. But consumption of online content spiked during the period.
• Amazon Prime Video acquired for films including ‘Gulabo Sitabo’ and ‘Shakuntala Devi’ for direct digital premier.

The digital release by producers does not breach the exclusivity window.

7. Swiggy Fires 1,100 Employees

Swiggy axed 1,100 jobs as India’s largest online food delivery platform looks to cut costs after the new coronavirus pandemic disrupted business.

• “The core food delivery business has been severely impacted and will stay impacted over the short-term," Sriharsha Majety, co-founder and chief executive officer at Bundl Technologies Pvt. Ltd., said in a letter to employees.
• The firm had raised capital just before Covid-19 crisis hit and have sufficient runway, but it is preparing for worse scenarios in the macro environment, he said.
• All affected employees, Majety said, would receive at least three months’ salary, irrespective of their notice period or tenure.
• For every year the employee has spent with the firm, they will be offered an extra month of ex-gratia, besides their notice period pays, he said.

Swiggy is also looking to become a leaner organisation and cut costs to withstand further risks amid the pandemic.

8. Supreme Court Puts Arbitration On The Back Foot

An arbitral award would be against justice and morality if it shocks the conscience of the court. Or when a decision is perverse, based on no evidence or ignores vital evidence in arriving at the decision. That has been the standard set by the Supreme Court for interfering with arbitral awards.

• Until last week when a three-judge bench of the apex court upended its own precedents.
• It has done so by setting aside the arbitral tribunal’s decision on grounds that the rule applied to interpret the commercial contract was incorrect.
• That, experts said, is no reason to interfere with an arbitral award.
• This is, unfortunately, two steps backwards in the position of the Supreme Court which, in previous judgments, has been very pro-arbitration, Hiroo Advani, managing partner at Advani & Co., said. “The judges should simply not reinterpret contracts.”

Find out more about the aribitral award that led to the shift in Supreme Court’s view on the matter.

9. Super Cyclonic Storm 'Amphan' Closes In On India

Cyclone "Amphan" intensified into a super cyclonic storm on Monday and is likely to move across northeast Bay of Bengal and cross West Bengal and Bangladesh coasts between Digha and the Hatia island on May 20, India's Metereological Department said.

• "Amphan" had turned into an extremely severe cyclonic storm and gathered more strength over Bay of Bengal while moving slowly towards the coast. It has now intensified further into a super cyclonic storm, IMD said.
• The wind speed due to the supercyclone over the Bay of Bengal may go up to 230 kmph and even 265 kmph, but ''Amphan'' will gradually weaken on the sea itself before its landfall on May 20, said H R Biswas, director of the meteorological centre in Bhubaneswar.
• Fishermen have been advised not to venture into the sea till May 21.

This has raised the likelihood of heavy rains and high-velocity winds in coastal Odisha from Monday evening.

10. Howard Marks Says Fed Support Isn’t Forever

As successful as the Federal Reserve has been propping up corporate debt prices, the support is only temporary and distress will sweep through the credit markets when the central bank inevitably steps back, Howard Marks said.

• “Can the Fed keep it up forever?” Marks, the billionaire co-chairman of Oaktree Capital Group, said in a Bloomberg “Front Row” interview.

However, Marks does not object to Fed support for the economy.