As India goes into a 21-day lockdown in a desperate bid to contain the coronavirus contagion, the stock market would still be operating along with some other essential services. Industry veterans say this is important because one of the basic promises of the market is that whenever one wants to buy or sell at a price, it would ensure liquidity. Yet, as volumes dry up, there are suggestions to reduce market sessions, maybe to one hour a day, just to facilitate essential buying and selling, and curtail the F&O and equity derivative segments.
STREET PULSE: Where we stand Nifty futures on the Singapore Exchange traded some 130 points lower at 7am (IST), signalling fresh weakness ahead on Dalal Street. Elsewhere in Asia, shares extended their rally in the wake of Wall Street's big gains as the US Congress appeared closer to passing a $2 trillion stimulus package.
Read More  | MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.3 per cent with Australian shares rising 4.5 per cent and South Korean shares gaining 4 per cent. Japan's Nikkei added 2 per cent. |
| Wall Street rallied in overnight trade with the Dow logging best one-day gain since 1933. The index surged 2,112 points, or 11.37 per cent, to 20,704, while the S&P500 rallied 209 points, or 9.38 per cent, and the Nasdaq 557 points, or 8.12 per cent |
| Oil prices extended gains for a third session on Wednesday. WTI crude touched a high of $25.10 a barrel early in the session and was at $24.61 a barrel, up 60 cents, or 2.5 per cent. Brent crude rose 49 cents, or 1.8 per cent, to $27.64 |
| The rupee snapped its four-session losing run on Tuesday and gained 26 paise to settle at 75.94 (provisional) against the US dollar after Finance Minister Nirmala Sitharaman said the government was working on an economic package to deal with the coronavirus crisis |
| WHO'S |  |
NATION LOCKED DOWN... Prime Minister Narendra Modi declared a three-week nationwide lockdown starting midnight Tuesday, explaining that it was the only way of breaking the Covid-19 infection cycle. This essentially extended the lockdown from most states and Union Territories to the entire country and provided a more definite timeline. "Social distancing is the only way to break the cycle of infection," he said. All other lockdown conditions, such as the availability of essential commodities, remain the same, the government clarified.
Read More VOLUMES DRY UP ON BOURSES… Stock trading volumes slumped in Mumbai, with fresh regulatory curbs on margins and derivative trades amplifying the impact of the Covid-19-induced lockdown on one of the world's biggest, busiest and oldest equity markets. The combined turnover of BSE and NSE cash market on Monday and Tuesday was Rs 39,814 crore, about a quarter lower than the one-month average turnover of Rs 52,200 crore. Similarly, the combined turnover of F&O segment in the last two sessions was Rs 5.5 lakh crore, a fall of 64% from the one-month average daily turnover of Rs 15.4 lakh crore.
Read More LOCKDOWN IMPACT… Discretionary spending in India may take a hit of $45 billion (Rs 3.3 lakh crore) per month due to Covid-19 outbreak, according to a research by Axis Capital. This is equivalent to 1.4% of GDP. On average, an Indian consumer spends about $80 or nearly Rs 5,700 per month on discretionary items of which two-third is from urban regions and the balance from rural areas. It includes expenditure on clothing, footwear, household equipment, and recreation.
Read More HOTEL OUTLOOK CUT… Edelweiss has slashed margin estimates for hotel sector companies as massive lockdowns and restrictions on travel amid the Covid-19 outbreak are expected to take a heavy toll on the industry which is dependent on movement of people and a running economy as its bread and butter. The brokerage has cut target price on Lemon Tree Hotels to Rs 53 from Rs 65 and on Indian Hotels to Rs 139 from Rs 171.
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INDIA STIMULUS COMING… Finance minister Nirmala Sitharaman promised a comprehensive economic package "sooner than later" to counter the disruption caused by the coronavirus outbreak and announced significant relaxation in statutory and regulatory compliances. These include raising the threshold for filings under the IBC that will help the MSME sector, no charges on cash withdrawals from the ATMs of any bank, and extension of the ongoing income tax settlement scheme until June 30 at the prevailing terms.
Read More US STIMULUS ON ANVIL… The US Congress appeared closer to passing a $2 trillion stimulus package to curb the coronavirus pandemic's economic toll. Senior Democrats and Republicans in the divided U.S. Congress said on Tuesday they were close to a deal on a $2 trillion stimulus package to limit the coronavirus pandemic's economic toll. But it was unclear when they would be ready to vote on a bill. Investor fears about a sharp economic downturn are easing after the US Federal Reserve's offer of unlimited bond-buying and programmes to buy corporate debt.
Read More INVOKING ACT OF GOD… Business owners from real estate, hospitality and tourism sectors have approached banks citing the "Act of God" clause in their loan covenants to delay payments and seek restructuring of past loans. An Act of God, or force majeure in legal parlance, describes an event outside of human control or activity, and is generally invoked in extreme circumstances where the business has been affected by a natural calamity, epidemic or war.
Read More Meanwhile... SHARE SALE TARGET MISSED... With a week to go for the financial year to end, the government is set to fall short of its revised divestment target of Rs 65,000 crore by a little over 20%, even as officials expect some deals to close this month. Proceeds from divestment including offers for sale, equity traded funds and buybacks, stood at Rs 35,537.32 crore as of March 12, officials said, adding that an additional Rs 15,000 crore is expected from NTPC's buyout of NeepCo and THDC and the sale of Kamarajar Port to Chennai Port Trust.
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