Rate cut fails to hold up markets; Sensex dips 1,310 pts from day's high

Topics Markets | SGX Nifty | MARKET WRAP

In the broader market, the S&P BSE MidCap index ended at 10,538, up 0.29 per cent.
Equity market ended Friday's highly volatile session on a subdued note even as the Reserve Bank of India (RBI), in an emergency move, slashed the repo rate by a huge 75 basis points (bps) to arrest the potential downturn in the economy due to coronavirus (Covid-19) pandemic. In addition, the RBI imposed a moratorium on principal and interest payments for three months and told banks and non-banking finance companies that that non-payment won’t be considered as non-performing assets (NPA). READ MORE

The S&P BSE Sensex closed at 29,816, down 131 points or 0.44 per cent, with Axis Bank (up 5 per cent) being the top gainer and Bajaj Finance (down 9 per cent) the worst performer. Besides Bajaj Finance, stocks that contributed the most to the Sensex's fall were Bharti Airtel (down 6 per cent), HUL (down 3 per cent), and HDFC Bank (down 1 per cent). 

NSE's frontline index Nifty50 ended at 8,660, up 19 points or 0.22 per cent.  

On a weekly basis, Sensex slipped 0.33 per cent while Nifty fell 0.97 per cent. 

On the sectoral front, auto stocks slipped the most, thus snapping their three-day gaining streak. The Nifty Auto index ended around 2.5 per cent lower at  4,939 levels. On the other hand, private banks gained the most with the Nifty Private Bank index ending 1.72 per cent higher at 10,738 levels. 

Volatility index India VIX eased 0.77 per cent to 70.97 levels. 

In the  broader market, the S&P BSE MidCap index ended at 10,538, up 0.29 per cent while the S&P BSE SmallCap index ended 0.28 per cent higher at 9,497 levels. 

Global Markets

European shares tumbled in early trading on Friday after a stunning three-day rally sparked by hopes of more aggressive stimulus to shore up the global economy ravaged by the rapid spread of the coronavirus pandemic. Asian stocks, on the other hand, rose as investors wagered policymakers will roll out more stimulus measures to combat the coronavirus pandemic after US unemployment filings surged to a record.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 per cent, while Japan’s Nikkei rose 3.88 per cent, capping its biggest weekly gain on record. Australian shares gave up gains to fall 5.3 per cent after a strong week.

E-Mini futures for the S&P 500 reversed course and fell 0.88 per cent following three consecutive days of gains in the S&P 500 on Wall Street.

In commodities, oil prices were mixed as governments took unprecedented steps to limit the economic fallout from the coronavirus pandemic. Gold edged lower as investors booked profits, but was set for its best week since December 2008. 

(With inputs from Reuters)


4:17 PM IST Indices ended almost flat following the RBI measures to lessen the burden on borrowers and to increase liquidity in the system. The markets were up in the last 2 sessions on the expectations of these announcements from the Government and RBI. Now, since the 2 expected events are out of the way, focus comes back on the spread of the virus and its damage on the already reeling economy.

4:04 PM IST

4:03 PM IST

3:42 PM IST The S&P BSE Sensex slipped 131 points or 0.44 per cent to end at 29,816 while NSE's Nifty50 ended at 8,660, up 19 points or 0.22 per cent

3:27 PM IST Expectations from RBI were riding very high on rate cut, moratorium and liquidity measures. RBI has delivered on every count. This will provide significant support to the market and economy. The small finance banks will see significant liquidity free, which is critical to tide through the current challenges. While the measures were much needed but the markets will move now on how the Covid curve behaves in India. Longer shut downs will be detrimental to economy and the markets. Earlier recovery from lock down will mean a V-shaped market recovery

3:22 PM IST

3:13 PM IST Gold fell on Friday as investors booked profits, but was set for its best week since December 2008 as record high U.S. jobless claims due to the coronavirus fuelled hopes for more stimulus to stem the economic damage caused by the pandemic.

3:01 PM IST For the purpose, the company is allowed to pursue any of the multiple modes available such as issuance of commercial paper, debentures, bonds and/ or through bank credit lines, term loans including external commercial borrowings that it may deem fit, according to a stock exchange filing. READ MORE  

2:57 PM IST COMPANY LATEST PREV CLOSE LOSS(%) MAH. SEAMLESS 208.65 245.40 -14.98 CRISIL 1260.10 1401.65 -10.10 JSW ENERGY 41.70 46.00 -9.35 JAMNA AUTO INDS. 24.60 27.10 -9.23 ADANI POWER 27.50 30.10 -8.64 Click here for the full list

2:51 PM IST According to the company’s chairman and managing director, Sanjiv Puri, this fund will be utilised primarily to provide relief to the vulnerable and most needy sections of society who are impacted by the pandemic and are facing significant disruption in their livelihoods. READ MORE

2:43 PM IST

2:41 PM IST

LIVE UPDATES

MARKET COMMENT | Vinod Nair, Head of Research at Geojit Financial Services

Indices ended almost flat following the RBI measures to lessen the burden on borrowers and to increase liquidity in the system. The markets were up in the last 2 sessions on the expectations of these announcements from the Government and RBI. Now, since the 2 expected events are out of the way, focus comes back on the spread of the virus and its damage on the already reeling economy.

SECTOR WATCH | Sectoral gainers and losers on the NSE


MARKET AT CLOSE | Top losers and gainers on the S&P BSE Sensex


CLOSING BELL

The S&P BSE Sensex slipped 131 points or 0.44 per cent to end at 29,816 while NSE's Nifty50 ended at 8,660, up 19 points or 0.22 per cent

EXPERT COMMENT | Naveen Kulkarni, Chief Investment Officer, Axis Securities

Expectations from RBI were riding very high on rate cut, moratorium and liquidity measures. RBI has delivered on every count. This will provide significant support to the market and economy. The small finance banks will see significant liquidity free, which is critical to tide through the current challenges. While the measures were much needed but the markets will move now on how the Covid curve behaves in India. Longer shut downs will be detrimental to economy and the markets. Earlier recovery from lock down will mean a V-shaped market recovery

MARKET CHECK


Gold eases on profit-taking, but set for best week since Dec 2008: Reuters

Gold fell on Friday as investors booked profits, but was set for its best week since December 2008 as record high U.S. jobless claims due to the coronavirus fuelled hopes for more stimulus to stem the economic damage caused by the pandemic.


Dr Reddy's board approves borrowing of Rs 2,000 cr through multiple routes

For the purpose, the company is allowed to pursue any of the multiple modes available such as issuance of commercial paper, debentures, bonds and/ or through bank credit lines, term loans including external commercial borrowings that it may deem fit, according to a stock exchange filing. READ MORE  


Top losers on BSE today

COMPANY LATEST PREV CLOSE LOSS(%)
MAH. SEAMLESS 208.65 245.40 -14.98
CRISIL 1260.10 1401.65 -10.10
JSW ENERGY 41.70 46.00 -9.35
JAMNA AUTO INDS. 24.60 27.10 -9.23
ADANI POWER 27.50 30.10 -8.64
Click here for the full list

Coronavirus: ITC's Sanjiv Puri lines up Rs 150 crore contingency fund

According to the company’s chairman and managing director, Sanjiv Puri, this fund will be utilised primarily to provide relief to the vulnerable and most needy sections of society who are impacted by the pandemic and are facing significant disruption in their livelihoods. READ MORE

NEWS ALERT | Tata Motor's Board gives in-principle approval to subsidiarize it's PV business (including EV): BSE filing


STOCK ALERT :: Aptech surges 20% in 2 days


Nifty sectoral indices at this hour


EXPERT COMMENT | Navneet Munot, ED & CIO, SBI Mutual Fund on RBI announcement

"Reserve Bank of India announced a big monetary bazooka including 75 bps repo rate cut along with massive liquidity injection (first CRR cut In 7 years!) and relaxation in various measures to address the existing and potential financial stress in the economy. Measures targeted at giving relief to almost all borrowers to tide over these difficult times, relaxation on asset quality classification, capital adequacy, marginal standing facility and infusing massive liquidity to de-freeze the corporate bond and CP market will go a long way in easing financial stress. With today's actions, total liquidity injection by RBI sums to 3.2% of GDP. While India has limited fiscal space, monetary policy continues to do the heavy lifting at a time when growth is at a severe risk in the near term.

We need to explore unconventional measures on fiscal, administrative and regulatory fronts on the lines of lead taken by RBI today. Lower crude oil prices will be one of the silver linings for India. We can also explore the idea of creating a crude oil strategic reserves by using Forex reserves. We have been running relatively higher duration in anticipation of strong monetary measures. We expect yields to remain soft in the near term. These announcement will be taken positively by the equity market, however, its movements will continue to be dictated by the evolving situation on COVID-19 crisis and its implications on the economy and corporate profitability. As a house, our focus continues to remain on the bottom up stock picking

EXPERT COMMENT | Umesh Revankar, MD and CEO, Shriram Transport Finance on RBI rate cut move

The rate cut of 75bps is in line with our expectations and will aid to bring down the cost of borrowing. The CRR cut of 100bps will help in infusing the desired liquidity requirement in the system. The three months moratorium announcement will reduce the repayment pressure on the borrower and give him buffer time to understand his income status and react to his repayment of the loan accordingly.”
 
Adding, “All in all, it is a very welcoming policy. The government have announced corrective measures to combat with current pandemic situation which would thereby help in bringing financial stability into the system"

MARKET ALERT :: Sensex rebounds, up 300 pts now


SECTOR UPDATE | Aviation sector outlook for FY21 by CARE Ratings

Even as the macros of the Indian aviation industry may be in favour of propelling its growth, the industry may not fully recover any time soon post the effects of the pandemic which has affected business operations, travel and tourism and economies world over. With most of the countries going under lockdown and banning/posing restriction on entry of foreign nationals, airline carriers world over are mulling their operations due to lack of demand and are grounding their fleet due to which the aviation industry is in a fragile financial position.

Going forward, there seems to be turbulence and stormy clouds for the Indian aviation industry as airlines will be operating on sub-par capacity which will result in low ticket booking, fall in revenues and low passenger load factor (PLF). Passenger growth of airlines is to fall sharply and register a negative 20%-25% growth for FY21. Passenger growth has been 13.7% during FY19 and 3.7% during FY20 (April-February).

EXPERT COMMENT | Anuj Puri, Chairman - ANAROCK Property Consultants, on RBI rate cut move

RBI’s latest announcement of a massive repo rate cut of 75 bps coupled with three months moratorium of EMIs on all outstanding loans is the biggest move that India has so far made to counter the COVID-19 fallout. The move will push credit flow into all industries reeling under the impact of the coronavirus. 
 
The repo rate cut will I fuse cash flows into the system and ensure that consumption disruption is minimised. It will effectively benefit all sectors, including real estate.  Given this time period, RBI will ensure that the benefit of the rate cut is directly passed on to actual consumers, which could eventually translate into more home loan takers. Additionally, this move of the RBI encourage banks to lend more and also enable industries to borrow.

The moratorium of three months of EMIs on all outstanding loans will be a major relief to all concerned stakeholders, including home loan borrowers and developers. Developers now get breathing space to get their financial act together, at least for now. Moreover, the fact that non-payment of EMIs will not cause loans to turn bad is a major relief.
 
All in all, this big-bang announcement by the RBI will benefit all industries in the country, and is undoubtedly the most convincing intervention yet to tame a major economic crisis in the country.

EXPERT COMMENT :: Gurpreet Sidana, Chief Operating Officer, Religare Broking

The announced cut of 75 bps in REPO rate is higher than the market expectation as the majority were anticipating 50bps and that too during the MPC meet in April. And to make sure that it translates into business, they cut the reverse REPO rate by 90bps, to encourage banks to lend and improve the credit flows in the system rather than parking the deposits with the RBI. Further, the RBI cut CRR by 100 bps to 3%. Above all, to directly touch the borrowers, they’ve gone for a 3-month moratorium to all the term loans and much-desired relief on interest on working capital.
 
It does not only save the urban middle class, industrial borrowers at large but also help the banks (scheduled and cooperative) and NBFCs which are already dealing with the stress of rising NPAs. And that, in turn, would reflect into their stock prices too. In short, it’s a win-win situation for all.

NEWS ALERT | HDFC Life Insurance slips 8% to Rs 440

-- Around 50.45 million equity shares, representing 2.5 per cent of total equity, changed hands via block deals in morning trade 

Coronavirus impact: Fitch cuts banks' score of operating environment

Faced with the adverse fallout of COVID-19 on the banking sector in India, Fitch on Thursday revised its mid-point score for banks’ operating environment to 'BB' from 'BB+' earlier.
 
Increasing challenges from the pandemic are expected to worsen an already difficult operating environment, it said. ICICI Bank and Axis Bank are susceptible to a downward viability rating pressure, even though they have better income and capital buffers than their peers.

European stocks drop


Contribution to the S&P BSE Sensex today


This is not like a one-quarter hit; it will take time: PVR chief Ajay Bijli

The first salvo was when Jammu & Kashmir shut down theatres (March 11), then Kerala and Delhi followed suit. If social gathering propagates the disease then we are happy to meet public guidelines. It is not just a business issue. READ MORE

Coronavirus impact: GDP likely to fall to a three-decade low, say analysts

With the nation under a lockdown because of the coronavirus disease (COVID-19) outbreak, analysts suggest that the impact on various Indian industries could cost the economy around 3 per cent of GDP.
 
There has been around 40 per cent decline in economic activity after the lockdown, as only essential manufacturing (food & pharma) and services (grocery trade, health & public services) are functioning. READ MORE

RBI measures to improve returns of debt MF schemes, help liquid schemes

The liquidity-boosting measures taken by Reserve Bank of India (RBI) on Friday to mitigate the impact of the economic slowdown induced by coronavirus, is likely to improve returns of debt mutual fund (MF) schemes and help liquid schemes in handling redemption pressures. “The move will re-value the debt portfolios of existing investors as yields see softening,” said Dwijendra Srivastava, chief investment officer-fixed income, Sundaram MF. READ MORE

Fewer hits than misses in FMCG as demand and supply concerns weigh

The fast-moving consumer goods (FMCG) sector is believed to be faring better, given the daily-use products it sells. Expected margin gains from lower input costs, following the sharp correction in oil prices, adds to the belief. However, the road ahead may be tough, as demand and supply-related issues are bound to take a toll on their overall performance till the next quarter. READ MORE

RBI pulled out its bazooka to tackle Covid-19 slowdown: Experts on rate cut

Abheek Barua, Chief Economist, HDFC Bank, New Delhi
 
“In many ways the RBI’s measures went beyond the market’s expectation, particularly the magnitude of the policy rate cut and the CRR reduction. “The fact that unlike the ECB or the Fed, the RBI did not announce direct purchases of corporate bonds, leaving it to the banks instead, could be bothering markets. Besides there are no sectoral facilities for the worst hit like aviation, hospitality etc.” READ MORE

How coronavirus has exposed the pain points of migration and globalisation

By one estimate, some 17 million Indians were living outside the country in 2017 and around 391,000 went abroad as unskilled migrants. According to the 2001 census, 259 million people migrated from one state to another and from village to village. READ MORE

Bharti Airtel declines over 7%, top Sensex loser


EXPERT COMMENT | Jimeet Modi, Founder & CEO, Samco Securities on RBI announcements

RBI with its monetary policy tools has done what was expected, infuse liquidity of Rs. 3.74Lakh Crs (3.2% of GDP) through a cut in CRR by 1% , interest rate reduction by 75 bps to 4.4% and other liquidity boosting instruments to ease fund raising concerns in the short term. But in such uncertain times instead of fresh funds entities want to save their skin, RBI's relaxation of only 3 months instead of 6 months for moratorium on interest on loans and working capital has disappointed many.  No doubt, RBI is playing every card in its pocket to prevent a crisis like situation by giving banks the ability to lend more but as such no direct helping hand has been given to ailing industries as of now.  Overall good but capital market is disappointed. 

Market Strategy by Motilal Oswal Financial Services

Complete lockdown in an already sluggish economic growth environment of India, is leading to extremely volatile market conditions. If not contained well, the spread of the virus can have significant impact on the domestic consumption-driven economy. What makes this slowdown unique is that the policymakers’ intervention – monetary or fiscally – will be broadly ineffective in addressing the economic effects unless the COVID-19 forces subside naturally. The longer it takes for the situation to normalize, the more anxiety will lead to profound actions from the policymakers. However, we note that such significant corrections have opened up equally significant investment opportunities in the past for long term investors. Even in the past we have seen many major economic issues impacting the market, however we have recovered from most of them over time. Volatility is the friend of long term investors by making good stocks cheaper and attractive. The best strategy for retail investors would be to accumulate good fundamental and quality stocks gradually over the next few weeks and months.
 
Top 10 Ideas: Reliance Industries, HDFC Bank, Hindustan Unilever, HDFC Ltd, Infosys, Bharti Airtel, ICICI Bank, Ultratech, Alkem Labs, Tata Consumer

NEWS ALERT :: Closure of bank branches mere rumours: DFS

MARKET VOICE :: Vijay Kedia on picking fundamentally sound stocks

MARKET UPDATE | Top gainers on the BSE at this hour


EXPERT COMMENT | Amnish Aggarwal, Head of Research at Prabhudas Lilladher

Monetary Policy Committee (MPC) has taken bold measure by reducing repo rate by cutting Repo, LAF and CRR and allowing the moratorium on loans in its advanced scheduled April MPC meet. Repo rate has been slashed by 75bps (4.4%) with accommodative stance to contain COVID-19 related slowdown. We believe that the measures aim at ensuring the liquidity issues and increase lending in the system. RBI incentives are at 3.2% of GDP which shows serious resolve to fight the current pandemic, although it hints at anemic growth and uncertainty in the near term. We believe Q4FY20 GDP to see a steep fall at sub 4% level, further we believe retail inflation to moderate from current level of 6.6% (Feb'20) and to fall under RBI target of 4% (+/- 2%) given food inflation is easing out and likely decline in core inflation due to fall in consumer demand amid COVID-19 outbreak. We believe recent compliance related measure and relief package by Government along with RBI measure will shelter decline in economic growth to some extent. Further, we believe simultaneous effort by RBI and GOI to continue in form of more unconventional measure and fiscal stimulus.

MARKET VOICE :: Vikas Khemani

MARKET VOICE :: Ambareesh Baliga

Fall from intra-day high today

COMPANY DAY'S HIGH(RS) DAY'S LOW(RS) FALL(%)
INDUSIND BANK 542.30 403.00 -24.50
ICICI SEC 294.60 241.10 -16.40
RAJESH EXPORTS 685.05 573.00 -16.36
SYNGENE INTL. 262.00 220.80 -15.73
CHALET HOTELS 233.60 200.00 -14.38
Click here for the full list

INDUSTRY VOICE :: Vikram Kirloskar, President, Confederation of Indian Industry

The major announcements by RBI on CRR, Repo rate & Moratorium will ease the minds of industry. RBI has been very responsive & the Governor has done a fantastic job.


'RBI’s direction on deferment of EMI dates is ambiguous and half-hearted'

EXPERT COMMENT :: Dhiraj Relli, MD & CEO, HDFC Securities on RBI action

The much-awaited MPC announced a massive 75bps repo rate cuts and 90bps reverse repo rate cut; expanding the policy corridor, thus making the rate cut more than 75bps. Massive liquidity infusion (~3.2% of GDP after pandemic outbreak) via CRR rate cut of 100bps, MSF, especially targeted LTROs for onward lending to corporates would ease the elevated yields. Relief to the borrowers by way of a moratorium on term loans for 3 months, deferment of interest payment on working capital loans is a big positive.
 
Overall MPC gave more than what was expected and assured to resort to more measures if the situation worsens. The impact of these measures on the economic growth could take some time to fructify. Financials will get breathing space as far as recovery and NPA recognition is concerned. It could elevate sentiments temporarily but the main impact will be visible post the lifting of lockdown. In the interim softer yields could benefit investors in Gsec/other debt papers (including Banks) to book some MTM gains.
 
 

EXPERT COMMENT :: Upasna Bhardwaj, Sr. Economist, Kotak Mahindra Bank

RBI, very correctly so, announced a comprehensive bazooka covering all aspects of the economy by taking measures system-wide both through liquidity, rates and regulatory forbearance (retail as well as for industry) and also targeted measures to manage the corporate bond markets. The measures should help in tiding through the end of the year issues which many banks/institutions were fearing and will go a long way in cushioning the dislocations in various markets. We expect additional scope for 40-50bps of rate cut with any further easing and extension of measures depending on the nature of spread of COVID-19

EXPERT COMMENT | Nikhil Kamath, Co-founder & CIO, True Beacon & Zerodha on RBI 's announcement

The measures that RBI has taken to ensure sufficient liquidity for corporates and the business community is a measure that will provide the relief, as is delaying interest payments and EMI so that businesses and individuals are not unduly punished by debt obligations in light of this unforeseen shock. However, liquidity and loan provisions must be combined with direct and effective income support to the marginalized sectors of the economy to ensure speedy recovery in both supply and demand.

PM Modi says, RBI's steps will boost liquidity

Tech view: Should you use the rally in banks post the rate cut to exit?

NIFTY BANK: The most significant level for this index is 22,000. Any move toward this may see extensive selling pressure. Going forward, the index might not show deeper corrective moves; however, the upside may eventually see strong resistance in the range of 21,000 to 21,500 levels. The overall trend has lesser volumes - rather it is trading below-average volume. READ MORE

Aurobindo Pharma gains 12% after USFDA issued EIR for Hyderabad facility

Shares of Aurobindo Pharma gained 12 per cent to Rs 406 on the BSE on Friday, after the company announced that its Hyderabad-based facility has received an Establishment Inspection Report (EIR) with Voluntary Action Initiated (VAl) status from the US FDA. The stock of drugmaker was trading higher for the fourth straight day and has rallied 38 per cent during the period. READ MORE

MARKET UPDATE:: Sensex turns green amid volatile trade


Balrampur Chini up 10% as ICICI Bank buys stake in NBFC arm

Shares of Balrampur Chini Mills were locked in the 10 per cent upper circuit for second straight day, at Rs 90, on the BSE on Friday after ICICI Bank bought minority stake in the company’s associate company Auxilo Finserve. “Pursuant to the definitive agreements executed on March 25, 2020, ICICI Bank has invested Rs 51.09 crore in the associate company, Auxilo Finserve by way of subscribing 34.06 million equity shares of Rs 10, constituting 9.90 per cent of its equity share capital at a premium of Rs 5 per share,” Balrampur Chini Mills said in regulatory filing on Thursday after market hours. READ MORE

EXPERT COMMET | Joseph Thomas, Head of Research - Emkay Wealth Management

"The RBI announcement is inclusive of all the possible actions from a monetary policy perspective, like the rate action to bring down policy rates directly, liquidity action to support effective transmission of lower rates to ultimate users of credit, and a number of regulatory and developmental measures. The measures have addressed all the fundamental issues in a comprehensive manner using both conventional measures like cut in the repo rate to the tune of 75 bps and the CRR cut of 100 bps, and also substantial liquidity measures, apart from actions like access to domestic banks in offshore currency NDFs. The relief given on the repayments in term loans is indeed a very timely action and would serve to remove lot of stress which a large number of borrowers may face in the coming days. This is a direct and targeted approach to the fluid situation in the face of an uncertain inflation and growth trajectory. This scaffolds the positive impact of the fiscal measures and strengthens our response to the adverse economic impact of the pandemic."

Key highlights: RBI reduces repo rate by 75 bps to 4.4%; slashes CRR by 100 bps

The central bank also reduced the cash reserve ratio (CRR) of all banks by 100 basis points to 3 per cent with effect from March 28 for 1 year. RBI will maintain accommodative stance, Governor Shaktikanta Das said while announcing decisions of Monetary Policy Committee (MPC). READ MORE
RBI governor Shaktikanta Das

Auto shares trade weak after 3-day gain; Hero MotoCorp, Bajaj Auto down 5%

Shares of automobiles companies erased their early morning gains and were trading up to 6 per cent lower on the National Stock Exchange (NSE) on Friday, despite the Reserve Bank of India (RBI) lowering the key repo rate by 75 basis points (bps) to 4.4 per cent to help arrest the economic slowdown in the wake of the coronavirus (Covid-19) outbreak. READ MORE

EXPERT COMMENT :: RBI's rate cut provides the much-needed balm to revive the economy

This is probably the first time that the central bank has changed this corridor size to 65 bps from 40 bps. It will be interesting to see how banks respond, as they would need to be more responsive to the need of the hour and change their mindset to ensure they lend more to companies. READ MORE
Madan Sabnavis, chief economist, CARE Ratings (


MARKET ALERT :: Sensex slumps 500 pts


EXPERT COMMENT | Abhimanyu Sofat, Head of Research, IIFL Securities

RBI announced bold set of measures amounting to ~3.2% of GDP to fight coronavirus will be well taken by the market. Measures of no asset classification downgrade for 3 months on term loans, working capital loans moratorium will be a relief for the industry. Providing liquidity in investment grade corporate bonds will help in improving the currently stalled credit markets. Additionally, CRR cut of 100 bp along with repo and reverse repo cuts are likely to help induce additional liquidity. We had hoped for any additional liquidity window for NBFCs & MFs which hopefully with the possible backstop from the government RBI may be able to provide in the future.

EXPERT COMMENT :: Effectiveness of monetary stimulus will be limited, says Deepthi Mary Mathew, Economist at Geojit Financial Services

It could be said that RBI has announced massive liquidity boosting measures including cuts in repo rate, reverse repo rate and CRR. The governor has also hinted about using unconventional methods if needed. In the present scenario, considering the weak sentiments in the economy, the effectiveness of monetary stimulus will be limited. Three month moratorium on loans is a welcome step.

Nifty Auto index turns red


EXPERT COMMENT :: This is an opportunity to make outsized gains over the next few years

In a surprise move, the Reserve Bank of India (RBI) lowered the key repo rate by 75 basis points (bps) to 4.4 per cent and slashed the reverse repo rate by 90 bps to 4 per cent. Central Banks around the globe are adopting a ‘whatever it takes’ approach to provide the required boost to the economy in this period of crisis and the Reserve Bank of Indian (RBI) was expected to follow suit. Positive macroeconomic indicators, spread of India’s interest rates above global interest rates and lower inflation expectations provided the RBI and government large headroom for giving monetary and fiscal stimuli. Also, the RBI has $480 billion of foreign exchange reserves, which puts India in a comfortable position in terms of foreign exchange reserves. READ MORE
S Naren, executive director and chief investment officer at ICICI Prudential AMC

MARKET UPDATE:: Sensex extends fall


EXPERT COMMENT :: RBI has shown that it is tough, says V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

A 75 bps rate cut is a massive step towards liquitdity boost. It's a relief-cum-stimulus package with a big repo cut and even bigger reverse repo cut. This, together with, CRR cut will be a big stimulus for banks to lend. Total liquidity injection along with measures announced earlier would amount to Rs 3,70,000 crores, which is 3.2 % of GDP. The 3 month moratorium on term loans is a great relief to borrowers. The combination of measures to boost liquidity, improve monetary transmission and relax repayment pressures will act with force multiplier in the economy. 

EXPERT COMMENT :: Rumki Majumdar, Economist, Deloitte India

The extent of the policy rate cut and the LTRO operations indicate the willingness of the policymakers to ensure liquidity in the system. After all, businesses must have access to funds to run their day-to-day operations and service debt. Today's move indicates that the government is now focusing on different ways to cushion the economy from the COVID-related impact and to position businesses for eventual recovery once the crisis is over (and it will eventually be over). The much-needed policy coordination between the government and the RBI, as we are seeing now, will be key in fuelling the eventual recovery.

FM Sitharaman says slashed interest rate needs quick transmission

MARKET CHECK:: Sensex slips into the red post RBI Governor's address


NEWS ALERT | Last tranche of capital conservation buffer postponed: Shaktikanta Das

>> Banks may reassess working capital Cycle, won’t be treated as NPA

NEWS ALERT | LTRO operation upto Rs 1 lk cr for 3 yrs to maintain liquidity

>> To be done at floating rate linked to policy repo rate

>> Reduce CRR of all banks by 100 bps w.r.t NDTL for 1 year


NEWS ALERT | RBI guv on impact of Covid-19

>> If Covid-19 spreads to greater extent -- 

1) Global slowdown will deepen

2) Slump in crude could provide relief

3) Jan, Feb inflation print indicate they are running higher than RBI projection 

NEWS ALERT | RBI cuts repo rate by 75 bps to 4.4%, stance remains accommodative: RBI guv

>> Reversed repo rate reduced by 90 bps to 4%

>> To mitigate Covid-19 impact

>> Voted 4:2 majority 

MARKET CHECK:: Sensex pares some gains ahead of RBI press meet


CORONAVIRUS UPDATE :: Total cases in India rise to 724: Govt

>> Active cases: 640
 
>> Recovered: 66

>> Death toll: 17 

BROKERAGE RADAR :: MOFSL on govt relief package

>> According to government calculations, the packages would cost the central exchequer a total of INR1.7t (0.9% of GDP). The packages include provision of extra food, cash, utilization of idle funds with the state governments, and an increase in the wage rate, among others. Even the organized sector got some relief
through payment toward their respective provident fund accounts.
 
>> The government however, did not make it clear as to how the additional cost of INR1.7t will be financed – through extra market borrowings or some other means?
 
>> It is almost a given that the first quarter of FY21 will see very less economic activity, which implies that government revenues in terms of indirect tax collections (customs, excise, GST) will be heavily impacted.
 
>> Although the government has relaxed its FY20 fiscal deficit target by 50bp to 3.8% of GDP, growth is expected to come somewhere ~4.5% now as against the earlier expected ~7.5%. Based on this assumption, fiscal deficit in FY20 is likely to come in at ~3.9% of GDP

CORONAVIRUS UPDATE FOR INDIA

-- Confirmed cases: 724

-- Deaths: 17

-- Active cases 640

-- Cured/discharged: 66

(As per Health Ministry)

Rate sensitive stocks gain :: Nifty Auto Index rises 4%


BROKERAGE RADAR | Edelweiss Securities on relief package by the govt

The government has announced an Rs 1.7tn (0.8% of GDP) relief package, which includes: i) in-kind transfers (food for poor); ii) cash transfers (through DBT to lower income groups, pensioners, construction workers, etc); and iii) other measures (collateral-free loans for specific groups etc).The relief package adds up to 0.8% of GDP. We think these measures are necessary, but underwhelming. The actual fiscal outgo may be just 0.2–0.4% of GDP as several measures may not entail extra spending. This pales in comparison with the policy response globally. And one is not sure if this would be funded by extra borrowing or rationalising/saving expenditure elsewhere. Besides, the package failed to address the serious issue of debt repayments amid the lockdown (RBI will need to address the same). We do hope more measures will follow shortly to address the mounting risk of debt defaults. There are signs of stress building-up in credit markets (spreads are widening). 

STOCK ALERT :: Ircon extends gain, surges 41% in 3 days


YES Bank surges 15% on capital infusion plan

>> The board, at its meeting on Thursday, approved raising of funds for an additional amount aggregating up to Rs 5,000 crore in one or more tranches, by issuing securities.


Future Retail hits 5% lower circuit on report Group founder Kishore Biyani is looking to sell a large chunk of stake in the company


Piramal Enterprises vaults 15%

>> Rating agency CARE has affirmed its AA/Stable credit rating for additional NCD of up to Rs 1,000 crore.


Aurobindo Pharma locked in 10% upper circuit


NEWS ALERT :: Moody's pegs India's FY20 GDP at 2.5%

>> FY21 GDP pegged at 5.8%

Nifty IT index trades higher


NEWS ALERT :: RBI likely to have finalised steps to boost growth: Bloomberg

>> RBI's MPC likely to have met earlier this week

Axis Bank hits 10% upper circuit


SECTORAL TRENDS AT NSE :: Nity Bank index surges over 1,400 pts


MARKET UPDATE | 2.5% equity of HDFC Life changes hands


SENSEX HEATMAP :: Banks leading from the front


OPENING BELL


OPENING BELL | Sensex surges ahead of RBI press conference


Will the RBI cut interest rates today? Here's what top brokerages expect

While the Monetary Policy Committee (MPC) of the RBI originally was slated to meet in the first week of April, the central bank in a surprise move is holding a briefing today. READ MORE
RBI Governor Shaktikanta Das

Top gainers and losers at S&P BSE Sensex during Pre-Open


Market at Pre-Open


Market at Pre-Open


Rupee opening

Rupee opens higher at 74.69/$ vs Thursday's close of 75.15 against the US dollar
 

Stocks to watch: NTPC, YES Bank, Future Group stks, Lupin, Aurobindo Pharma

Future Group stocks: Future Group founder Kishore Biyani is in talks with investors including PremjiInvest to sell a large chunk of the promoter stake in Future Retail Ltd (FRL) to tide over his liquidity crisis, according to media reports.
 
NTPC: State-owned power giant NTPC on Thursday said it has signed share purchase agreements to acquire the government''s stakes in THDCIL and NEEPCO for a total of Rs 11,500 crore. READ MORE

CRISIL cuts India's FY21 growth forecast to 3.5% amid coronavirus outbreak

The severe dent in the economic activity due to the coronavirus pandemic led rating agency Crisil to sharply cut its growth estimate for 2020-21 to 3.5 per cent, on Thursday. Earlier, the agency had predicted an economic growth of 5.2 per cent for the next financial year. The agency welcomed the Rs 1.70-trillion package announced by Finance Minister Nirmala Sitharaman earlier in the day but said more measures like loan forbearances for small businesses and households are necessary. READ MORE

Derivatives strategy on Manappuram Finance by HDFC Securities

Buy Manappuram Finance April Futures at Rs 103.5
 
Rationale:
 
-- We have seen long roll-over in the Manappuram Finance Futures’ yesterday, where we saw 74 per cent roll over to the April series with rollover cost rising to nearly 2 per cent. READ MORE
 

Bulk deals on BSE as on Thursday

Bulk deals on NSE as on Thursday

FII/FPI & DII trading activity on NSE, BSE and MSEI


Nifty Technical Outlook by Nirmal Bang Securities

Nifty is expected to open gap up and likely to witness positive move during the day. Technically, Nifty has a support of 8570-8380. If Nifty manages to surpass 8740 then only we may witness extension of pull back rally  towards 8820/8970 Overall view is cautious as we are witnessing profit booking at higher levels so hold the long positions with the strict stop loss.  It’s a stock specific market trade the calls with strict stoploss.

ALERT :: RBI PRESSER AT 10 AM

Rupee check

Source: Bloomberg


Oil check

>> US crude ticked up 1.77% to $23 a barrel in Asia. Energy markets have been caught in a tug-of-war between hopes for stimulus spending and worries about excess supplies of crude.

SGX Nifty

>> At 8:14 am, the index was trading 81 points or 0.94% higher at 8,723 level

Asian markets: Stocks rise on bets of more stimulus

Source: Reuters


Wall Street: Dow wraps up strongest three days since 1931

Source: Reuters


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