Bear markets are known to cause creative destruction, and market bottoms trigger leadership changes. Leaders of the previous market cycle lose dominance and fall apart, paving the way for new leaders to emerge. If that theory holds, Indian banks and financials should taper off and a new breed has to emerge. When that happens, Nifty will underperform the broader market, as financial services holds almost 39% weightage in it. There was glimpse of that in Wednesday's market, a sign that Nifty's bottom may be around the corner.
STREET PULSE: Where we stand Nifty futures on the Singapore Exchange traded 76 points lower at 7am (IST), signalling some more pain ahead on Dalal Street. Elsewhere in Asia, shares fell after a coronavirus-driven plunge in US retail sales and factory production and increasing gloomy economic outlooks for Asia.
Read More  | MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.6 per cent. Japan's Nikkei fell 1.3 per cent. |
| US stocks declined in overnight trade. The Dow fell 445 points, or 1.86 per cent; the S&P500 lost 62 points, or 2.20 per cent, and the Nasdaq 122 points, or 1.44 per cent |
| Oil prices recovered. WTI rose nearly three per cent to change hands at $20.44 a barrel after falling below $20 on Wednesday -- its lowest price in 18 years. Brent rose two per cent to trade at $28.31 a barrel. |
| The rupee pared early gains and fell 17 paise to hit an all-time low of 76.44 against the US dollar on Wednesday, tracking weak domestic equities and strengthening of the greenback |
| WHO'S |  |
CHINESE INVESTORS WARY... Leading Chinese funds with exposure to India are looking for an exit strategy from here as these investors face backlash from various countries worldwide for looking to lap up distressed assets amid the global downturn. State-owned entities including Bank of China, China Construction Bank and China Investment Corporation, among others, have approached consultants seeking plans for an orderly exit from India if the government imposes restrictions on their investments in the country.
Read More BANK WOES SPILL OVER... Investors in retail banks — the favourites on Dalal Street till a couple of months ago — may need to brace for more testing times in the months ahead. Analysts say severe downturn and resultant job losses on account of the lockdown could lead to fall in consumer lending and a jump in bad loans for these lenders. Shares of most retail banks have already dropped sharper than the market amid the broad-based selloff.
Read More INDIA STARES AT DEFLATION?… As India's wholesale inflation eased to a four-month low in March amid a drop in prices of food and non-food articles fell, economists said deflationary factors would be at play rather than inflationary factors going ahead. "At present, we expect the WPI to record a disinflation of 1.5% in FY21," said Aditi Nayar, principal economist, ICRA. Inflation, as measured by the wholesale price index, was 1% in March, down from 2.26% in the preceding month, while food inflation fell to 4.91% from 7.79% in February, official data showed.
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GOVT READIES TO OPEN INDUSTRY... The Narendra Modi administration on Wednesday took an important step towards resumption of normal economic activity by partially lifting restrictions on manufacturing and construction, and further eased movement of goods traffic from April 20. Nearly 80% of India's export units located in special economic zones, export oriented units (EOUs) and industrial townships and clusters could resume work in some form by April 20. Government officials say around 1,000 units in special economic zones (SEZs) could become operational.
Read More NORMAL MONSOON AHEAD... Monsoon rainfall will be normal this year, the weather office said. This is great news for farmers and the economy in the midst of a long lockdown as two-thirds of the country depends on agriculture for livelihood and higher farm income boosts overall demand and business sentiment. "Quantitatively, the monsoon seasonal (June to September) rainfall is likely to be 100% of the Long Period Average (LPA) with a model error of ± 5%," India Meteorological Department said in its annual forecast for the rainy season.
Read More FM READIES MSME BOOSTER… Finance minister Nirmala Sitharaman will meet Prime Minister Narendra Modi on Thursday to finalise the stimulus and support measures to counter the severe economic impact of Covid-19. "If the package is finalised, it could be unveiled soon after," a government official said on condition of anonymity. The package is likely to focus on the MSME sector, which has been the worst hit, and could include an over Rs 15,000 crore credit guarantee fund, another government official said.
Read More Meanwhile... 3 SHORTLISTED TO REPLACE PURI… HDFC Bank has identified three contenders to succeed CEO Aditya Puri. They include bank's executive directors Sashidhar Jagdishan and Kaizad Bharucha and Citi Commercial Bank global CEO Sunil Garg. The candidatures will be discussed at a board meeting on April 18.
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