NIFTY HIGH LOW
1. India Cases Near 50,000; Mumbai Steps Up Covid-19 Fight
🔹The total number of confirmed Covid-19 cases in India inched closer to 50,000 with state and the central governments struggling to find a balance between lives and livelihood.
🔹This includes 14,183 patients who’ve been discharged and 1,694 who’ve died.
🔹India saw its highest-ever one-day recoveries at 1,456, while 126 died in the last 24 hours.
🔹Meanwhile, Mumbai--the city with the highest number of confirmed Covid-19 cases in India--has given administrative heads of civic wards the power to take over private hospitals and nursing homes to fight the pandemic.
🔹Besides, Chief Minister Uddhav Thackeray has also requested Railways, Ports, Army, Navy and other central government undertakings to make their facilities available across Maharashtra for Covid-19 containment.
🔹This underscores the health crisis that the state, which has over 15,000 cases and over 600 deaths, is facing.
Globally, cases crossed 36 lakh leaving over 2.56 lakh people dead.
🔹The U.K.’s coronavirus death toll soared passed that of Italy, making it the worst-hit country in Europe.
🔹Hong Kong moved to ease restrictions, and the state of Bavaria set out plans to reopen its economy in what may serve as a blueprint for the rest of Germany.
🔹President Donald Trump said Americans should begin returning to their everyday lives even if it leads to more sickness and death.
2. What Kerala’s Covid-19 Strategy Can Teach The Centre
Kerala has only 36 active Covid-19 cases, yet, as per the central government’s zoning plan, social and commercial activity remains restricted across most of the state as 12 of 14 districts are either red or orange, only two are green.
🔹“We have been trying to tell Delhi that there is a lot of flexibility required,” Thomas Isaac, Kerala’s finance minister said even as he described the flexibility the state has given to local governments in managing health and social services.
🔹“We cannot be micromanaged from Delhi,” he told BloombergQuint when asked how states would administer the centre’s new zoning policy.
🔹Kerala may be an outlier, given its higher literacy levels and sustained investment in local healthcare infrastructure, its success in containing the virus spread, as narrated by Isaac below, underscores the one critical thing needed to win the battle — devolution of power.
3. India’s Services Activity Saw ‘Drastic Decline’ In April
The nationwide lockdown, which continued through the month of April, brought India’s services sector to a near standstill, showed data released by IHS Markit.
🔹The India Services Business Activity Index fell to 5.4 in April, an “extreme decline” from 49.3 in March, IHS Markit said. A reading of less than 50 indicates contraction in business activity.
🔹The reading is “indicative of the most severe contraction in services output since records began in December 2005,” the release said.
🔹According to respondents to the survey, activity fell severely as a result of the nationwide lockdown, leading businesses to shut down their operations as demand collapsed.
4. Moratorium For NBFCs: SBI Relents
India’s largest lender State Bank of India will allow non-banking financial companies to avail the benefits of a three-month repayment moratorium permitted by the Reserve Bank of India, a senior bank official told BloombergQuint on condition of anonymity.
🔹Without relief from banks earlier, NBFCs were left in a spot.
🔹While they had to offer a moratorium to their customers, a similar relief was not provided to them, leading to potential asset-liability and cashflow mismatches at these lenders.
🔹SBI has now changed its position. The bank will offer a moratorium to NBFCs on repayments due between March 1 and May 31, the official quoted above said.
🔹Since much of the period for which is the moratorium is applicable has passed, the bank will not count any overdue payments from NBFCs as defaults.
5. Chargesheet Filed Against Rana Kapoor
🔹The Enforcement Directorate on Wednesday filed a chargesheet against Yes Bank Ltd. co-founder Rana Kapoor, arrested on money laundering charges.
🔹Kapoor, former managing director and chief executive officer of Yes Bank, was arrested by the ED on March 8 under the Prevention of Money Laundering Act.
🔹He is accused of sanctioning loans to certain firms against kickbacks.
🔹Among other things, the central probe agency is investigating Rs 600 crore received by a company allegedly controlled by Kapoor, his wife and three daughters from an entity linked to the scam-hit Dewan Housing Finance Ltd.
6. Nifty Rises; GSK To Sell HUL Stake At A Discount
Indian equity markets snapped a two-day losing streak and closed with modest gains.
🔹The S&P BSE Sensex gained over 550 points from the day's low to end at 31,685, up by 0.75 percent.
🔹The NSE Nifty 50 too gained 0.7 percent to close at 9,270, rebounding close to 150 points from the day's low.
🔹Among sectoral indices, the Nifty Bank index and the Nifty Auto index rose, while the FMCG index underperformed.
GlaxoSmithKline Plc is selling its entire stake in Unilever’s listed India unit for about $3.3 billion, according to terms seen
🔹Glaxo and Horlicks Ltd. will together sell as many as 133.8 million shares in Hindustan Unilever Ltd.
🔹Prices will range between Rs 1,850-1,950 a share, representing a discount of as much as 8 percent to Wednesday’s close.
🔹JPMorgan Chase & Co., HSBC Holdings Plc and Morgan Stanley are the bookrunners.
7. How India’s Steep Fuel Price Hike Hurts Oil Retailers
Shares of India’s three listed fuel retailers fell after the government raised taxes to shore up its revenue amid the new coronavirus pandemic.
🔹India raised taxes on petrol and diesel by Rs 10 and Rs 13 a litre, respectively, effective May 6. That’s the second such move in less than two months and comes at a time international crude oil prices slumped.
🔹Yet, retail sale price of the fuel will not change, implying the companies will have to bear the brunt of the hike in excise duty.
🔹And that’s expected to hurt their gross marketing margin.
Trading Tweaks
💫Move Into ASM Framework: Digicontent
💫Move Into Short-Term ASM Framework: Healthcare Global Enterprises
💫Move Out Of Short-Term ASM Framework: Nippon Life India Asset Management, Unichem Laboratories, Shreyas Shipping & Logistics, Aurionpro Solutions
Money Market Update
🔹The rupee ended with modest losses at 75.77 against the U.S. Dollar as compared to Tuesday's close of 75.64.
Asian stocks have opened lower on Thursday morning, digesting weak overnight cues from the U.S. amid mixed corporate earnings and worsening macro data.
Treasuries have edged higher, a pull back after its recent declines amid a surge in U.S. debt issuances. The U.S. Dollar has held gains while the yen continues to trade near its highest level since mid-March.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 1 percent to 9,163 as of 6:55 a.m.
SGX Nifty trading around 9,150 Vs Nifty May Fut’s previous close of 9,280; indicates lower opening for Indian markets today.
Covid_19 Update | Brazil records at least 10,503 new cases of coronavirus (record high) & 615 deaths in the past 24 hours.
So far, more than 73,000 deaths & 12.2 lk cases have been recorded in US, per JHU data.
China reports 2 new cases, both 'imported', per govt
CLSA believes earnings momentum for Pharma will continue. Sun, Cipla, Aurobindo & Cadila are top picks
CLSA says 2020 is turning out to be similar to the last downcycle of 2015 for metals. Hindalco & Coal India are top picks
|Jefferies prefers MGL & Guj Gas over IGL amongst Gas Utilities companies. It believes sharp rise in taxes on petrol/diesel is positive for city gas cos
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