An attempted rebound in stocks amid continued signs of slowing spread of Covid-19 across the globe seems to be evaporating, as more real concerns about economic and earnings outlook dawn on investors. While many economists have warned that a global recession is around the corner, if we are not in one already, the forecasts show US may be in for the worst recession in modern history. The problem, as one economist put it, is that the current health crisis is hurting the core of economic activity: consumers.
STREET PULSE: Where we stand Nifty futures on the Singapore Exchange traded some 146 points down at 7am (IST), signalling a possible selloff ahead on Dalal Street. Elsewhere in Asia, stocks stepped back after two sessions of sharp gains as investors turned wary on getting too optimistic about the coronavirus while death tolls were still mounting across the globe.
Read More  | MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.5%, Japan's Nikkei dropped 0.7% and South Korea 0.8%. |
| In overnight trade, Dow ruined a 900-point rally from the morning hours to close negative. S&P500 fell 0.17% and the Nasdaq 0.33% |
| Oil climbed , reversing most of the prior session's losses, as investors pinned hopes on a Thursday meeting where Opec members and allied producers will discuss output cuts to shore up prices that have tumbled amid the coronavirus pandemic. Brent gained 72 cents, or 2.3%, to $32.59 a barrel, while WTI crude rose $1.30, or 5.5%, to $24.93. |
| The rupee on Tuesday surged by 49 paise to close at 75.64 against the US dollar, following a rally in stock markets. |
| WHO'S |  |
LOCKDOWN EXTENSION AHEAD?… The Centre is looking at extending the lockdown beyond April 14 after many state governments and health experts suggested such a course of action on the ground that the Covid-19 threat is still looming large. The move came days after the PM had called upon chief ministers to come up with a strategy towards a "staggered exit" from the lockdown. This idea was to draw up a district-wise phased plan, but many states apparently felt that implementation would be challenging, especially when Covid-19 cases have still not ebbed. The current speculation is that an extension of about two weeks until April-end is under consideration.
Read More NBFCS IN A SOUP… NBFCs are on the edge with commercial paper worth Rs 1.6 lakh crore and NCDs worth Rs 87,000 crore coming up for redemption by June as cash flows dwindle and banks play hardball on extending credit. Small and medium-sized NBFCs are most at risk due to the disruption caused by the Covid-19 outbreak. Large lenders will be able to tap RBI's Rs 1 lakh crore targeted longer term refinancing operations window but others are likely to face a crunch.
Read More STRATEGIC SALES ON HOLD… The government has back-burnered its plans to sell stakes in state-owned companies to strategic and non-strategic investors for the time being even as stock markets across the world have crashed in the wake of the Covid-19 outbreak. Strategic disinvestments in Shipping Corporation of India and Container Corporation of India have been put on hold for now. Deadlines for submitting bids for Air India and BPCL could also be extended further if potential bidders seek more time.
Read More ICRA CUTS GROWTH FORECAST... Rating company ICRA scaled down its forecast for India's economic growth to 2% for FY21 from a range of 4.7% to 5.2% estimated previously, it said in an update released online on Tuesday. It also lowered its estimate for growth in FY20 to 4.4% from 4.7% earlier. The revisions came just under two weeks since the previous estimate on March 24.
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OUTSIZED RETURNS IN EQUITY!… The Indian stock market is poised for 'outsized' returns if the yield on the trailing 12-month Nifty earnings over the 10-year government bond yield is anything to go by. The trailing 12-month Nifty earnings yield has turned higher than the government bond yield for the first time since 2009 by 10 basis points. There have been only two such instances in the past, during financial year 2002-03 and in financial year 2008-09 — and both instances were followed by outsized returns.
Read More MARKET TO TEST 9,000 ON NIFTY... The market could test the 9,000 resistance on the Nifty in the very near term, provisional options data for April 9 expiry showed after Tuesday's monster 9% Nifty rally to 8,792. The open interest put-call ratio for April 9 expiry jumped to 1.5 on Tuesday from 0.82 on Friday as bulls sold more put options while bears cut their outstanding call positions. Even for April 30 expiry the PCR rose to 1.21 from 1.17. For April 9 expiry, the resistance stood at 9,000, followed by 9,500 levels.
Read More DRUG EXPORTS BAN GONE... India has relaxed a ban on exports of paracetamol and hydroxychloroquine, both used in Covid-19 therapies, and placed them in the licensed category. US President Donald Trump had threatened India with retaliation if it rejected his country's demand for the supply of hydroxychloroquine, which he sees as key to battling the infection. The move to ease the export ban followed the recommendation of an expert panel, officials with knowledge of the matter said.
Read More Meanwhile... NO TAKER FOR BAD LOAN… Bad loans put up for sale had few takers in March, a traditionally busy month for such deals, with just about a third of the assets drawing bids in a market virtually shut down by the Covid-19 pandemic. Banks and NBFCs had put up about Rs 10,000-15,000 crore of bad assets for sale in March, which is normally the busiest month in the calendar. But the offers drew bids for less than Rs 5,000 crore.
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