BQuick On May 29: Top 10 Stories In Under 10 Minutes

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

1. GDP Growth At 3.1%, But The Real Slump Is Yet To Come

Growth in the Indian economy slowed sharply in the January-March period, hurt by the global and local spread of the Covid-19 virus.

• At 3.1%, quarterly GDP growth is at its lowest since the fourth quarter of FY09.
• In gross value-added terms, the economy grew by 3% in fourth quarter compared to 4.5% last quarter.
• The impact of local disruptions caused by the novel coronavirus is partially captured in the data for the fourth quarter of 2019-20 as a nationwide lockdown was announced only on March 24.

Find out which sectors were the most impacted.

Fiscal Deficit Breaches Government Target

The Indian government missed even its revised fiscal deficit target for 2019-20, showed data released by the Controller General of Accounts on Friday.

• The government’s fiscal deficit settled at Rs 9.36 lakh crore, or 122% of its revised target of Rs 7.67 lakh crore.
• The government had seen its fiscal position deteriorate even before the Covid-19 crisis hit the economy and government finances.
• Impact of the disruptions caused by the virus starting from the month of March only added to the pressure.

The government’s fiscal position in the year gone by was complicated further by economic growth which was much lower than projected.

2. Core Sector Output Falls By Record 38%

India’s core sector output shrank by a record 38.1% in April due to the coronavirus-induced lockdown, according to the official data released Friday.

• The eight core sectors had expanded by 5.2 percent in April 2019, the data released by the Commerce and Industries Ministry showed.
• In March this year, production of the eight sectors—coal, crude oil, natural gas, refinery products, fertiliser, steel, cement, and electricity—had contracted by 9%.

Various industries experienced substantial loss of production, the government said.

3. Cyrus Mistry Vs Tata Sons, Yet Again

The Supreme Court has agreed to hear Cyrus Mistry’s petition seeking representation on the board of Tata Sons Ltd.

• The top court today issued notice on the petition and tagged the case along with a petition filed by Tata Sons that challenged the National Company Law Appellate Tribunal’s ruling that said Mistry’s dismissal from Tata Sons was illegal.
• In Friday’s petition, the Mistry side argued that while the NCLAT upheld their arguments with clear findings that favoured them, the subsequent reliefs granted by the appellate tribunal doesn’t do complete justice to them.
• The Mistry side has also challenged Article 121 of the Articles of Association of Tata Sons, which says it allows select directors to override the views of the board of directors.

Mistry is seeking representation proportionate to the stake held by him in the company.

4. Yes Bank Vs AT-1 Bondholders

Nearly three months after a reconstruction plan was finalised for Yes Bank Ltd., a crucial part of the scheme continues to be under dispute.

• The decision to write-down additional tier-1 bonds, worth over Rs 8,000 crore, has attracted opposition not just from institutional investors but also retail buyers, who claim the securities were mis-sold to them.
• A group of 500-odd investors, with investments of about Rs 250 crore, have come together to try and fight the decision.
• A Telegram group has been formed, legal representation is being sought, and a plan is being discussed to file a legal petition against Yes Bank and even the Reserve Bank of India, according to five such investors who BloombergQuint spoke to.

A petition on behalf of institutional investors has already been filed by Axis Trustee Services, the bond trustee.

5. Nifty Posts Biggest Weekly Jump In A Month; U.S. Stocks Drop

Indian equity markets ended with gains for the third straight day, shrugging off geopolitical tensions and weak global cues. Markets posted gains for this truncated week.

• Both the S&P BSE Sensex and the NSE Nifty 50 index ended higher courtesy a last hour surge, after fluctuating for most of the trading day.
• The Sensex closed 0.7% higher at 31,424 while the Nifty advanced 1% to end at 9,580.
• Thirty six out of the 50 Nifty constituents ended with gains.
• For the week, the Sensex posted gains of 5.7% while the Nifty advanced 5.9%.

Follow the day’s trading action here.

U.S. stocks fell as investors weighed the biggest drop on record in American consumer spending and awaited President Donald Trump’s latest response in his escalating feud with China.

• The S&P 500 limped into the final trading day of May as data showed the engine of the American economy rapidly decelerated last month.
• Trump’s announcement Thursday that he’d address the press on China rattled equities late in that session, but signs that he’ll stop short of upending the American trade status with Hong Kong eased nerves somewhat ahead of his comments Friday.
• West Texas Intermediate crude dipped 1.3% to $33.26 a barrel.

Get your daily fix of global markets here.

6. Wipro Gets A New CEO

Wipro Ltd. named Thierry Delaporte chief executive officer, recruiting its new leader from rival Capgemini SE as the Indian company tries to regain momentum in the tech services industry.

• Delaporte will take over effective July 6, replacing Abidali Z Neemuchwala, and will also be managing director.
• Wipro had said in January that Neemuchwala would leave the post when a successor was found, ending a four-year tenure during which the company had lost ground to larger rivals Infosys Ltd. and Tata Consultancy Services Ltd.
• Wipro’s shares gained more than 6% Friday, recouping a portion of its 19% loss since the start of the year.

Delaporte will bring experience in consulting across a range of industries to the new role.

7. Vodafone Idea Denies Talking To Google

Amid reports that Google is eyeing a 5% stake in the company, Vodafone Idea said on Friday it constantly evaluates various opportunities but there is no proposal before the board of the firm as yet.

• Vodafone Idea’s clarification to the Bombay Stock Exchange came a day after reports that Alphabet Inc.'s Google is eyeing about 5% stake in the telecom company.
• There is "no proposal" as reported that is being considered at the board, it added.

The telecom operator said it will disclose any proposals considered by the board of directors if any.

8. It May Get Worse For Debt Mutual Funds

Liquidity issues in underlying assets and significant redemption pressures pose risks to debt mutual funds by way of increasing concentration over entities and sectors since the Covid-19 led lockdown was imposed.

• “The redemptions are largely a consequence of the weak balance sheet liquidity of corporates, which got aggravated during the lockdown. The contributions from corporates in liquid funds and credit funds have dried up,” India Ratings & Research Pvt. Ltd. said in a report.
• “The challenging secondary market operating environment, coupled with bouts of redemption pressure could sharply deteriorate the portfolio quality, and that these challenges could be aggravated amid further deterioration in macro conditions and any idiosyncratic credit event.”

And that caused the assets under management of certain debt funds to fall.

9. Covid-19: India Cases Spike; Maharashtra Pledges Relief Package

Covid-19 infections continued gathering pace in India as the total tally crossed the 1.65-lakh mark with the largest spike in fresh cases.

• Total number of cases now stand at 1,65,799 including 71,105 who have recovered and 4,706 deaths.
• India added nearly 7,500 fresh cases of infections over one day.
• Authorities reported 7,466 new cases, 3,414 recoveries and 175 deaths in the 24 hours preceding the Health Ministry’s update at 8 a.m. on May 29.
• India’s total deaths reported so far have climbed past the 4,638 fatalities from Covid-19 in China.
• Meanwhile, Maharashtra said it will release an stimulus package to help revive the state economy from the Covid-19 impact.
• The state will announce a package soon after a cabinet decision as businesses and jobs have been adversely impacted, deputy chief minister Ajit Pawar told reporters today.

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

Globally, cases crossed 58 lakh leaving over 3.6 lakh people dead.

• Scientists are raising questions about a study that linked antimalarial drugs to increased heart risks and death among Covid-19 patients.
• Denmark and Norway agreed to allow leisure travel between the Scandinavian nations after both oversaw mostly successful efforts to contain the outbreak, but neighboring Sweden wasn’t included.
• Iran had its highest daily increase in new cases in almost two months.

Follow the global spread of the virus here.

10. Twitter Puts Warning On Trump’s Tweet

Twitter Inc. put up a rule-violation notice on one of U.S. President Donald Trump’s most recent posts that included the phrase “when the looting starts, the shooting starts.”

• Saying that the president’s comments about protests in Minneapolis were against its rules, the social media company has obscured the offending message on Trump’s profile with the following warning: “This Tweet violated the Twitter Rules about glorifying violence. However, Twitter has determined that it may be in the public’s interest for the Tweet to remain accessible.”
• As protests in Minneapolis over the death of a handcuffed African American man turned increasingly violent, the president used Twitter to assail Minneapolis’s mayor, Jacob Frey, as weak and said he had told Minnesota Governor Tim Walz that “the military is with him all the way.”

The warning escalates Twitter’s confrontation with Trump.