Nifty currently trades at a trailing PE of 16.2 times, the lowest in six years, while trailing P/B of 2.1 times is at its lowest since the Global Financial Crisis. India's market-cap-to-GDP stands at 54%, a level last seen during the GFC. If the damage to the rupee remains moderate, forex reserves stay high and oil prices do not rise sharply, that would provide a silver lining for India in an otherwise gloomy environment. That can also make Indian market a big draw for a part of the trillions of dollars flooding overseas economies. Theories of healthy long-term returns on Indian equities from here on are premised on these factors.
STREET PULSE: Where we stand Nifty futures on the Singapore Exchange traded some 22 points higher at 7am (IST), signalling possible positive start ahead on Dalal Street. Elsewhere in Asia, markets looked poised for another day of gains after stocks rallied on signs of a slowdown in coronavirus-related deaths, even as oil prices resumed decline on doubts over a potential Saudi-Russian pact to cut output.
Read More  | Hong Kong futures were up and Australia futures rose in early trade. Nikkei futures opened lower, but were 2.3% above the cash close. |
| US stocks rocketed higher in overnight trade, with each of the major indices rallying at least 7%. Dow rose 1,627 points, or 7.73%, to 22,679, the S&P500 gained 175 points, or 7.03%, and the Nasdaq 540 points, or 7.33%. |
| Oil prices rose amid hopes that the world's biggest producers of crude will agree to curtail production as the coronavirus pandemic ravages the global economy, even as analysts cautioned the cuts may do little to boost demand. Brent crude gained 73 cents, or 2.2%, to $33.78 a barrel while WTI crude rose by 97 cents, or 3.7%, to $27.05 |
| India's currency market was closed on Monday for an official holiday. On Friday, the rupee settled 53 paise lower at 76.13 against the US dollar amid a significant rise in coronavirus cases in the country and weakness in domestic equities. |
| WHO'S |  |
HARD-HIT SECTORS… The current timetable suggests India's nationwide lockdown would last until mid-April. But that wouldn't mean customers would start crowding theatre halls or book airline travel immediately. The finer things in life — recreation, leisure and luxury — must wait. And that's not ideal for stocks of airlines, hotels, fine-dining restaurants, or multiplexes. Analysts and fund managers believe that these sectors will be among the last to regain full form after the lockdown ends.
Read More SERVICES ACTIVITY CONTRACTS… India's services sector activity contracted in March, bearing the impact of the Covid-19 pandemic that dented demand, especially in overseas markets, as discretionary spending was knocked by public health measures aimed at stemming the outbreak, a private survey showed on Monday. The IHS Markit India Services Business Activity Index recorded 49.3 in March, down from February's 85-month high of 57.5. A reading above 50 indicates expansion, while a figure below signals contraction.
Read More EMI HOLIDAY FOR ALL… RBI on Monday reached out to several banks and NBFCs to say that borrowers should be considered 'under moratorium by default' regardless of their opting-in or otherwise. The regulatory instruction, conveyed through emails, is very different from what many lenders have decided to follow. Many banks are offering the option to defer the payment of loan interest and principal only to borrowers who specifically ask for it.
Read More MF CUT-OFF TIME ADVANCED.. Mutual funds have temporarily changed the cut-off timings for buying and redeeming from April 7 to April 17, in line with RBI's reduced trading hours for money markets and forex markets. Investors will have to put in their transaction requests early to avoid delays in purchases and redemptions by one working day. For purchase of liquid funds and overnight funds, the cut-off time for getting the previous day's NAV has been advanced by an hour to12.30 pm. For other funds, the cut-off time has been advanced to1 pm from 3 pm. For investors looking to redeem, the cut-off time for all funds has been advanced from 3 pm to1 pm to get the same day's NAV.
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OIL HOLDS OUT HOPE… Crude oil leapt by about a fifth late last week on expectations that measures to contain a global price war will cushion a crucial global commodity — and price reversals in Brent and Nymex point to a rebound in Indian equities. Past data suggests crude's revival from record lows has always triggered relief rallies in Nifty. It isn't likely to be very different this time either, at least going by technical indicators, including the RSI and put-call ratios that indicate Indian equities are in an 'oversold' zone. Over the past 25 years, each of the three bounce-backs in crude after its plunge to multi-year lows were followed by a recovery in emerging markets, including India.
Read More SAFER BETS… Pharma companies have re-emerged as the safer bets for investors in the ongoing market turmoil. With valuations at multi-year lows and the sector expected to remain resilient in the current downturn, investors are opting for larger pharma firms such as Dr Reddy's, Sun Pharma and Cipla, among others. The Nifty Pharma Index has fallen 9.6% in the last one month, compared to a 28% fall in the benchmark Nifty during the same period.
Read More OIL DEAL IN US COURT… Major oil producers including Saudi Arabia and Russia are likely to agree to cut production at a Thursday meeting but only if the US joins the effort, aimed at coping with the disastrous effect of the coronavirus on fuel demand, three OPEC+ sources told Reuters on Monday. The US has not committed to taking part in any deal, which President Donald Trump has said could take 10-15% of world supply off the market.
Read More Meanwhile... PLAN AFOOT TO LIFT LOCKDOWN… Prime Minister Narendra Modi called on all ministries to prepare business continuity plans to mitigate the impact of Covid-19 and put the economy back into recovery mode once the lockdown ends. Each ministry has to identify 10 key decisions and 10 priority focus areas for action. The Cabinet has approved a 30% cut in pay for all MPs and ministers, including the PM, for a year. The current 21-day lockdown is scheduled to end on April 14.
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