The CEA has put out a solid explanation of Modi's version of 'New Deal'. The effect of Covid pandemic is a war-like situation, but it is different from a war, he says. It is causing supply-side disruptions, which are not permanent; just hands are off the machines. Temporary liquidity can tide over those difficulties. On the demand side, the impact can manifest if people start losing jobs. So, the demand-side measures are to lessen the impact on jobs. It is this focused resource allocation which helped the FM limit the stimulus impact on fiscal deficit at less than 2% of GDP.
MARKET CUES: Where do we stand >>>  | Nifty futures traded some 50 points down on the Singapore Exchange at 7 am (IST) in signs that Dalal Street was heading for some more selloff. |
| At the end of Friday's trade, maximum Call open interest stood at Nifty strike prices 10,000 and 9,500 levels, and maximum Put OI at 9,000 and 8,500. Options data indicated an immediate trading range between 8,800 and 9,500 levels of Nifty. |
| While Nifty recovered most of the intraday losses to settle flat on Friday. it still formed a bearish candle resembling a 'Hammer' on the daily chart. Analysts said the trend remains negative with Nifty heading towards the 8,900 level now a real possibility. |
| Elsewhere in Asia, equity benchmarks opened mixed as investors weighed encouraging signs of businesses reopening across major economies against more data showing the severity of the pandemic's impact and rising US-China tensions. Japan's Nikkei rose 0.2%, South Korean stocks 1%. Australian shares also advanced. Stocks were little changed in Hong Kong. |
| US stocks recovered from steep losses early Friday to close higher, despite data showing a plunge in April retail sales and news that the Trump administration will block shipments of semiconductors to China's Huawei Technologies, stoking fears of renewed trade tensions. Dow rose 61 points, or less than 0.3%; S&P500 11.20 points, or 0.4%, and the Nasdaq 70.84 points, or 0.8%. |
| Oil prices jumped by more than $1 a barrel on Monday to their highest in more than a month, supported by ongoing output cuts and signs of gradual recovery in fuel demand as more countries eased lockdowns. Brent crude prices climbed $1.34, or 4.1 per cent, to $33.84 a barrel while WTI crude gained $1.40, or 4.8%, to $30.83. |
| The rupee pared initial gains and provisionally settled 2 paise lower at 75.58 against the US dollar on Friday as investors awaited fresh cues from further announcements on the fiscal stimulus package. |
| The dollar held its ground on Monday as concern about global tensions with China overshadowed improving sentiment. The greenback was steady on most other Asian currencies after gains last week and flat against a basket of currencies. |
| LOOK WHO'S |  |
Ecommerce set to resume... Ecommerce firms such as Flipkart, Amazon and Snapdeal, as well as specialised etailers including Lenskart, Nykaa and Firstcry, are expected to resume full-fledged operations from Monday after the Centre removed restrictions on online retail as part of its Lockdown 4.0 plan. Earlier, these platforms could sell non-essential goods like smartphones and electronics in government-designated green and orange zones. In red zones, however, they were permitted to sell only essential items such as food and groceries. States will take the final call on allowing businesses to function based on their local needs and situation, the guidelines said.
Read More NBFC dollar bonds big hit... NBFCs have turned out be the darlings of global investors who are now betting big on dollar bonds after the finance minister announced a relief package for the sector last week. High-yield bonds sold by Manappuram, Muthoot, IIFL Fin, Shriram Transport, Indiabulls Housing have rallied in just about a week's time with yields plunging as much as 500 basis points (bps). This could well pave the way for local shadow banks tapping overseas capital. When yields fall, prices rise. A basis point is 0.01%.
Read More Remittances show revival... An early pickup in economic activity and rise in reverse remittances from rural to urban have led to revival in domestic remittances in May after a near total collapse in March and April. India's dominant players such as Fino Payments Bank, Spice Digital, Eko Financial Services and PayPoint are reporting a 35-50% recovery in business in the first two weeks of May against a 90% fall in March and April. More importantly, it is a reversal in trend.
Read More States get leeway in Lockdown 4.0... In the most significant easing of the national lockdown yet, the Centre on Sunday gave states considerable leeway in reopening market places in addition to standalone shops, allowed intra-state and inter-state passenger vehicle and bus travel and did away with the 33% staffing restriction for businesses to provide a fillip to the economy. Domestic and international passenger flights, metro rail services, hotels and dine-in at restaurants, shopping malls, educational institutions and large public gatherings remain specifically prohibited in all zones.
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India heading for deepest recession… Goldman Sachs expects India will experience its deepest recession ever after a poor run of data underscored the damaging economic impact of lockdowns in the world's second-most populous nation. GDP will contract by an annualized 45% in the second quarter from the prior three months, compared with Goldman's previous forecast of a 20% slump. A stronger rebound of 20% is now seen for the third quarter, while projections for the fourth quarter and first of next year are unchanged at 14% and 6.5%.
Read More MFs big seller of stocks in April... Domestic equities witnessed biggest selling by mutual funds in at least four years in April as the benchmark equity gauges climbed about one-fifth from the recent lows reached on March 23, Sebi data showed. In April, mutual funds sold Rs 7,965.5 crore worth of stocks, the highest since Rs 10,194.5 crore sold in March 2016. There was massive selling in sectors such as media and entertainment, metals, auto, paper and construction, giving funds an opportunity to make a quick exit.
Read More China warns US on trade ties... China's commerce ministry says it will take "all necessary measures" in response to new US restrictions on Chinese tech giant Huawei's ability to use American technology, calling the measures an abuse of state power and a violation of market principles. An unidentified spokesperson quoted Sunday in a statement on the ministry's website said the regulations also threatened the security of the "global industrial and supply chain". China will "take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises," it said.
Read More Meanwhile... PSU turfs opened for private players... Finance minister Nirmala Sitharaman on Sunday unveiled the government's plan to limit the role of public sector companies across the economy, while announcing assistance to help migrants, companies and state governments tackle the impact of the crisis, and provided more money for the rural job guarantee programme. The FM said the government will soon announce a new policy for PSUs, which will pave the way for the entry of private companies in all sectors, where state-run firms are present. Even in the strategic sectors, PSU presence will be limited to 1-4 entities while in other segments, the government will privatise state-run companies.
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