RBI's Rs 50,000 crore special credit line for the Rs 45,000 crore credit risk fund industry was timely intervention to help restore investor confidence in mutual funds, in particular, and financial markets in general. But on the ground, its implemention might not be smooth. For, most fund houses may have exhausted selling top-rated papers to meet redemption pressure in last two months and could be left with only lower-rated securities. In that case, banks might be hesitant to keep non-investment grade paper as collateral to lend to these funds.
MARKET CUES: Where we stand >>>  | Nifty futures on the Singapore Exchange traded 43 points lower at 7 am (IST) in signs that Dalal Street could be headed for a weak session |
| Nifty50 climbed over 1 per cent on Monday but could not breach the stiff resistance in the 9,350-9,390 region on a closing basis. It formed a Gravestone Doji on the daily chart, as the bears made a comeback and cut gains |
| Options data indicated Nifty's immediate trading range between 9,000 and 9,500 levels. India VIX fell 2.76 per cent to 38.04 level, extending its gradual fall since last four weeks. |
| Elsewhere in Asia, shares traded mixed on Tuesday after a strong Wall Street session as easing lockdown restrictions by some countries. Shares slipped in Japan, ticked higher in Hong Kong and fluctuated in South Korea and China. |
| Wall Street saw a modest rally overnight. Dow rose 1.51%, the S&P500 1.47% and the Nasdaq Composite 1.11%. |
| Oil fell on Tuesday, adding to huge declines in the previous session, on worries about limited capacity to store crude worldwide. WTI crude futures dropped by as much as 7.1% to $12.01 a barrel while Brent crude futures fell 3.5% to $19.72 |
| The rupee rose by 21 paise to close at 76.25 against the US dollar on Monday, tracking positive domestic equities and weakening of the American currency in the overseas market. |
| LOOK WHO'S |  |
Big MSME credit line planned... The government is considering a proposal to guarantee Rs 3 lakh crore of loans to small businesses as part of a plan to restart the economy reeling under the impact of a 40-day lockdown. Under the proposal, small firms will be eligible to borrow an additional 20% of their credit limit. The extra debt will be fully backed by the government, which will set up a special fund to pay for any defaults.
Read More Axis Bank buys stake in Max Life... Axis Bank is set to acquire nearly 30% of Max Life Insurance from Max Financial Services, the flagship listed company of Analjit Singh, for Rs 1,600 crore, ET reported. India's fourth-largest private sector bank will become a strategic partner of the life insurance firm, in which Max Financial will eventually hold 70% after a two-stage transaction.
Read More IPO-bound LIC on a high… LIC underwrote the highest number of policies for a financial year in over six years despite a washed-out closing fortnight in March. January-March is the period when life insurers typically process higher volumes of business. In terms of individual new business, LIC issued 21.9 million policies during the financial year just gone by. The IPO-bound insurer's first-year premium income grew 25% to Rs 51,000 crore compared with an industry growth of about 11.6 per cent.
Read More RIL plans public fund raise.... RIL is planning a rights issue, its first public fund raise in 29 years. Its board will meet on April 30 to "consider a proposal to issue equity shares to existing shareholders on rights basis." Through a stock exchange notice on Monday, RIL said its board would meet on April 30 to "consider a proposal to issue equity shares to existing shareholders on rights basis". Earlier this month, the RIL board had approved a proposal to raise Rs 25,000 crore through NCDs.
Read More | AND WHO'S |  |
Graded exit from lockdown... The national lockdown is likely to be replaced with a graded and somewhat piecemeal lifting of restrictions with the least curbs in green zones or districts with low prevalence or no Covid-19 cases, while tough stipulations will remain in red zones, which currently include major cities like Delhi, Mumbai and Ahmedabad. Officials said the sum of consultations the Prime Minister had with chief ministers on Monday was that most states wanted the lockdown to continue with some easing of curbs, depending on the situation in a particular area.
Read More RBI buying govt debt?... RBI bought chunks of debt just after the government sold it, the latest data showed, further fueling talk that the central bank is supporting the nation's fund-raising efforts. Traders have been speculating over the central bank's role in bill auctions this month as a handful of bids lapped up sales and drove yields to the lowest in more than a decade. While RBI hasn't taken part in any government auctions, the latest data suggest that it could be buying short-term debt in the secondary market within hours of a sale.
Read More Firms with Franklin exposure hit... Companies with investments in the six shuttered credit funds run by Franklin Templeton now stare at a possible downgrade of their credit ratings as their liquidity profile could undergo a change if they are unable to redeem their investments. Rating firms have begun to demand from clients their exposure to the fund to figure out the magnitude of the hit that these companies could face.
Read More Meanwhile... States told to grab Covid opportunity... PM is learnt to have suggested that states should explore the possibility of attracting investments in view of the likelihood of many companies exiting from Chinese cities in the wake of the Covid-19 virus. The PM told the states CMs that they should be ready for such investments as India, with abundant manpower skill and improved infrastructure, has the potential to become an alternative destination.
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