BQuick On May 4: Top 10 Stories In Under 10 Minutes  

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

1. India Covid-19 Cases Near 43,000

The total number of confirmed Covid-19 cases in India climbed closer to the 43,000-mark on Monday even as the government eased restrictions in some areas.

• The country reported 2,573 new cases over the last 24 hours, taking the total tally to 42,836, according to the health ministry’s 5 p.m. update.
• This includes 11,762 patients who’ve been discharged and 1,389 who’ve died.
• Over the last 24 hours, India has seen 875 recoveries and 83 deaths.
• This marks the third straight day where India recorded over 2,000 new cases.
• There are now ten Indian states with over 1,000 confirmed Covid-19 cases.
• Maharashtra has the most number of cases at nearly 13,000—almost a fourth of the total cases in India.

Follow the outbreak of coronavirus in India here.

Globally, cases crossed 35 lakh leaving over 2.47 lakh dead.

• U.S. President Donald Trump said that the nation’s death count would likely be higher than he had predicted.
• The worst-hit countries in Europe moved to ease curbs as cases slowed.
• Italy began to reopen its economy after two months, but the premier was criticized for being too cautious, and Spain started to relax its lockdown regime after weeks of confinement.

Track the developments around the global pandemic here.

2. After Facebook, Reliance Strikes Deal With Silver Lake

Soon after selling a stake in Jio Platforms Ltd. to Facebook Inc., Reliance Industries Ltd. brought in another investor for its digital and telecom assets.

• Silver Lake, an American private equity firm, will invest close to Rs 5,656 crore in the newly created subsidiary of India’s most valued company, according to an exchange filing.
• This takes the equity value of Jio Platforms unit to Rs 4.9 lakh crore, a 12.5 percent premium to Facebook’s investment.
• While the company didn’t disclose how much stake the private equity firm will hold in Jio Platforms, according to BloombergQuint’s calculations that should be close to 1.15 percent.
• This comes nearly 15 days after Facebook put in $5.7 billion, or Rs 43,574 crore, for a 10 percent stake in Jio Platforms.

But unlike the previous transaction, the entire investment in this case will be retained by Jio Platforms.

Reliance Industries Ltd., having reported its biggest drop in net profit in nine years, expects its bottom line to grow 10 percent in the ongoing financial year through March 2021.

• India’s biggest company by market value didn’t explicitly provide any guidance in its earnings statement.
• But it announced a fund-raise from existing shareholders.
• Hidden within those details is how the Mukesh Ambani-controlled oil-to-telecom conglomerate sees its profit pan out.

Find out how BloombergQuint reached that figure.

3. Sensex Drops 2,000 Points, U.S. Stocks Fall

Indian equity markets registered their biggest one-day drop in over a month owing to weak global cues and poor macro data domestically.

• The S&P BSE Sensex ended 5.9 percent or 2,002 points lower at 31,715.
• Only 2 out of the 30 index constituents managed to register gains.
• The NSE Nifty 50 index gave up half of the gains made during the previous week, ending at 9,293, down 5.7 percent.
• Forty seven out of the 50 index constituents ended with losses.
• Among sectoral indices, the Nifty Bank was the biggest underperformer, ending 8 percent lower.

Follow the day’s trading action here.

Stocks fell for a third day after the U.S. escalated rhetoric against China over the coronavirus.

• Industrial, financial and real-estate companies were the biggest losers in the S&P 500.
• Delta Air Lines Inc., American Airlines Group Inc. and United Airlines Holdings Inc. fell after Warren Buffett said over the weekend Berkshire Hathaway Inc. sold out of the four top U.S. airlines.
• West Texas oil futures dropped, halting a three-day 60 percent rally, though they pared most of their decline.
• The dollar strengthened against most major peers.

Get your daily fix of global markets here.

4. Halfway Back From The Market Bottom. What Next?

Do the underlying macro-economic trends, corporate earnings, market technicals, fund flows, and correlations with leading global indices justify the sharp retracement the market saw in April?

• The economy needs a big fiscal kickstart, but rating agencies have already sounded the alarm on a possible downgrade.
• On earnings, if a month of nervousness, two weeks of mild restrictions, and one week of a full-blown lockdown can do this in Q4, what does it say for the April-June quarter?
• The trailing price-to-book multiples are near the long-term averages, but much higher than the two panic points of 2013 and 2008.

So what explains the fact that the markets retraced well over 40 percent of the fall?

5. Lockdown Sends India’s Manufacturing Activity To All-Time Low

A full month under a nationwide lockdown, which led to a sudden stop in most business activities, pushed a gauge of India’s manufacturing sector to an all-time low.

• The India Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, fell to 27.4 in April from 51.8 in March on a seasonally adjusted basis, according to data released on Monday.
• A reading of less than 50 indicates contraction in business activity.
• The drop seen in the manufacturing PMI is the sharpest contraction in manufacturing conditions since data collection began over 15 years, IHS Markit said in its release.

The deterioration in business conditions has taken a toll on employment as well.

6. JSW Steel’s Output Slumps

JSW Steel Ltd. posted a nearly 60 percent plunge in output in April as a nationwide lockdown stretched through the month, in a signal that supply may have fallen sharply in the world’s second biggest producer.

• The first of India’s major steelmakers to report production in April, JSW’s crude steel output slumped to 5,63,000 tonnes last month, it said in an exchange filing Monday.
• Tycoon Sajjan Jindal’s flagship mill averaged capacity use of around 38 percent during the period, although with the government easing restrictions in many areas, JSW is gradually ramping up capacity, it said.

While steel mills can operate in lockdown, many have scaled down operations due to logistical hurdles and lack of manpower.

7. Bankers Fear A Drop In Remittances

An economic slowdown that has left few nations untouched and a plunge in oil prices that’s turning out to be a double whammy for West Asian nations might hurt worker remittances coming into India.

• Remittances, or earnings sent home by those working overseas, have been among the steadiest streams of inflows into the India economy, representing close to 2.8 percent of GDP.
• Mid-sized lenders such as Federal Bank and South Indian Bank, along with larger public sector banks such as State Bank of India, Punjab National Bank and Bank of Baroda receive the largest inflows through remittances.
• Senior executives working at these banks said they have not yet seen a drop in inflows but as more jobs are lost and migrant workers return home, remittances will be impacted.

The estimated dip in India is likely to be 23 percent to $64 billion.

8. India To Offer Land To Firms Moving Out Of China

India is developing a land pool nearly double the size of Luxembourg to lure businesses moving out of China, people with the knowledge of the matter told Bloomberg News.

• A total area of 461,589 hectares has been identified across the country for the purpose, the people said, asking not to be identified because they aren’t authorised to speak to the media.
• That includes 115,131 hectares of existing industrial land in states such as Gujarat, Maharashtra, Tamil Nadu and Andhra Pradesh, they said.
• Land has been one of the biggest impediments for companies looking to invest in India, with the plans of Saudi Aramco to Posco frustrated by delays in acquisition.

Providing land with power, water and road access may help attract new investments to an economy that was slowing even before the virus hit.

Related Coverage

• Forty days that prompted companies to write-off a quarter.
• Covid-19 may delay ACC, Ambuja’s capex plans.
• Why Mindtree stands out among peers during virus turmoil.

9. Maharashtra Allows Liquor Stores To Reopen With Riders

Maharashtra, the state with the highest number of Covid-19 cases, allowed liquor shops to reopen even in red zones, outside the containment areas or parts sealed because of high number of infected people, according to a tweet by Chief Minister Uddhav Thackeray.

• All liquor shops in rural areas can remain open.
• In the urban areas, liquor stores outside the containment zone can remain open till 5 p.m.
• According to the guidelines, depending on the situation on ground, district authorities are free to make changes to the norms issued by the excise department.
• Administrations of Solapur, Aurangabad, Jalna, Buldhana and Amravati districts, according to a PTI report, have issued instructions that liquor shops will not be allowed to open.

There’s no clarity yet about sale of liquor in Mumbai and Pune.

10. Sonia Gandhi Says Congress Will Bear Rail Travel Costs For Needy Migrant Workers

A political slugfest broke out over the issue of 'homecoming' of migrants with the Congress offering to pay for the travel of the stranded workers, and the Bharatiya Janata Party hitting back, saying the railways was already bearing 85 percent of the travel cost and only 15 percent was being taken from the state governments.

• Apart from the Congress, other opposition parties, including the Communist Party of India - Marxist , the National Conference and the Loktantrik Janata Dal have criticised the Centre amidst reports that migrant workers are not able to afford to travel back to their native places.
• Accusing the Central government and the Indian Railways of ignoring the demands made by the Congress for ensuring safe and free travel of migrant workers and labourers to their homes, party President Sonia Gandhi announced that party's state units will bear the cost of rail travel of needy migrants stranded at various places across the country as its "humble contribution" to show solidarity with these workers, who have contributed to nation's development.

“What is the responsibility of our government?” Gandhi asked.