NEW DELHI: Dalal Street looked euphoric this morning after Prime Minister Narendra Modi late Tuesday unveiled a Rs 20 lakh crore economic stimulus and promised major reforms to get the economy quickly out of the Covid-19 disruption.
Here’s breaking down the pre-market actions.
TRADE SETUP
Singapore trading sets stage for gap-up start
Nifty futures on the Singapore Exchange traded 211.30 points or 2.29 per cent higher at 9,436.30 on Wednesday, indicating a gap-up start for Dalal Street.
Tech view: Nifty forms Doji candle
The Nifty50 recovery on Tuesday from the lows coincided with the 200-day SMA on the hourly chart, which offers hope for the market, said Ruchit Jain of Angel Broking. “If the bulls manage to take the index beyond the 20-DMA level at 9,235, the recovery can get extended to 9,300-9,450 levels,” said Aditya Agarwala of YES Securities.
Asia markets fall in early trade
Japan’s benchmark Nikkei 225 index fell 1.11 per cent or 226.92 points to 20,139.56. Hong Kong’s Hang Seng slipped 0.55 per cent, or 134.01 points, to 24,111.67. China’s benchmark Shanghai Composite eased 0.30 per cent, or 8.60 points, to 2,882.96.
Brent prices drop 1.6%
Oil prices fell in early Asian trading on Wednesday after industry data showed a rise in US crude inventories and concerns mount about a possible second wave of the coronavirus pandemic in countries easing lockdowns. Brent crude was down 49 cents, or 1.6 per cent, at $29.49, having risen 1.2 per cent on Tuesday.
US stocks fell 2% overnight
The Dow Jones Industrial Average index fell 457.21 points, or 1.89 per cent, to 23,764.78. The S&P500 declined 60.20 points, or 2.05 per cent, to 2,870.12. The Nasdaq Composite index was down 189.79 points, or 2.06 per cent, to 9,002.55.
Maruti, Kotak Bank Q4 results today
ABB, Siemens, Maruti Suzuki, Kotak Mahindra Bank, GCPL, Mphasis and Escorts Finance are among companies which will disclose their March quarter earnings today.
FIIs sells Rs 1,662 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs Rs 1,662 crore on Tuesday, data available with NSE suggested. DIIs were net sellers to the tune of Rs 364 crore, data suggests.
MONEY MARKETS
Rupee: The domestic currency rose 22 paise to close at 75.51 against the dollar on Tuesday, amid a weak American currency in the overseas market.
10-year bonds: India 10-year bond yield fell 0.06 per cent to 6.16 after trading in 6.14-6.20 range.
Call rates: The overnight call money rate weighted average stood at 3.87 per cent, according to RBI data. It moved in a range of 2.30-4.50 per cent.
MACROS
Modi unveils Rs 20 lakh cr stimulus
Prime Minister Narendra Modi announced a Rs 20-lakh-crore stimulus package, equivalent to about 10% of India’s GDP, aimed at making the country self-reliant and reviving the stalled economy. Details of the plan, dubbed the Atmanirbhar Bharat Abhiyaan, will be unveiled by finance minister Nirmala Sitharaman starting Wednesday, the Prime Minister said in his address to the nation on Tuesday evening. The programme encompasses earlier packages announced by the government and RBI, Modi said, adding that bold reforms are needed to make the country self-reliant so that crises such as the Covid-19 pandemic can be overcome in future. The package will focus on land, labour, liquidity and laws, and will cater to various sectors including the cottage industries, micro, small & medium enterprises (MSMEs), the working class, middle class and industry, among others.
Govt set to ring in mega reforms
PM Narendra Modi’s address on Tuesday was aimed at setting the stage for his government to undertake big-ticket systemic reforms which, if not for the Covid-19 crisis, may have been politically difficult to navigate. major reforms can be expected in agriculture marketing, enhancing competitiveness of PSUs and simplifying laws to help the private sector make their businesses globally competitive. With labour reforms already being rolled out by most BJP-ruled states, official sources said the emphasis will be to ensure nationwide compliance and replicate this in other areas such as easier land availability for industry.
No-cost EMIs, zero down payment may end
Consumer finance companies are tightening terms fearing rising credit risk because of job losses and salary cuts due to the economy stalling in the wake of the coronavirus outbreak. They could rein in or stop zero downpayment schemes as well as no-cost equated monthly instalment (EMI) plans for smartphones, television sets, refrigerators, washing machines and air-conditioners. Retailers expect stricter credit norms to hit sales in an already subdued demand environment as the lockdown eases.
India’s March IIP sinks to a record low
India’s industrial production contracted by a record 16.7 per cent in March as restrictions imposed to curb the spread of coronavirus hit manufacturing and consumption. The contraction in March came on the back of factory output rising to a seven-month high of 4.5 per cent in February before the government imposed a nationwide lockdown that crippled economic activity. Manufacturing output contracted by 20.6 per cent in March from a year earlier, while electricity output shrank 6.8 per cent, according to official data released on Tuesday.
1/3rd of Indian households in soup
More than one-third of Indian households may run out of resources in another week and face distress without assistance after that, says a study based on data from the Centre for Monitoring Indian Economy household survey. The study on the impact of the lockdown on household income released on Tuesday also revealed that nearly 84% of households have suffered a decrease in monthly income, and that more than one-fourth of the country’s working age population is unemployed.
Chinese VCs put India plans on hold
Chinese venture capital investors are turning increasingly anxious about India’s new foreign direct investment policy, after the government last month mandated that all investments from countries sharing a land border with India will require its prior approval. Two investors told ET that deal flows into the country have already been impacted. Some investors have even withdrawn term sheets that were on the table. They were waiting for clarifications from the government on the policy tweak. The finance ministry notified the change in policy under the Foreign Exchange Management Act (FEMA) on April 22.
DoT to defer 5G airwave sale
The government plans to split the next telecom spectrum auctions by offering 4G airwaves sometime this year and 5G probably in 2021, people familiar with the matter said. The move would benefit Vodafone Idea and Bharti Airtel, which want the 5G spectrum sale to be delayed, citing stretched finances and an underdeveloped ecosystem, analysts said. Officials from the Department of Telecommunication pointed out that a 5G spectrum auction this year would have attracted few bidders, indicating the reason for the U-turn. However, industry executives said lack of clarity on whether Chinese vendors Huawei and ZTE can deploy their next generation mobile communication standard technology in India prompted the government to postpone the spectrum auction.
Sebi eases norms for banks, insurers
The Securities and Exchange Board of India (Sebi) has exempted banks and insurance companies from publishing consolidated financial results for the June quarter in the wake of the Covid-19 pandemic. At present, listed companies having subsidiaries are required to submit quarterly or year-to-date consolidated financial results. Besides, Ind-AS is applicable to all listed entities, barring those in the banking and insurance sectors.
