| News Announcement |
Impact Analysis |
| COVID-19 cases cross 1 million across the world with no signs of abating |
- US led the affliction accounting for over 25% of all afflictions globally as the problem has exacerbated in last few weeks
- Italy continues to lead in terms of casualties followed by Spain and the US. Europe has seen more than 40,000 deaths
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| US jobless claims doubled in one week to 6.6 million showing COVID pain |
- This was twice the number of jobless claims in a week as the lockdown started to show on lay-offs in business
- The jobless claims had touched a low of 4% but is now expected to take unemployment back to 15% in the US
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| Sensex and Nifty cracked on the last day of the trading week |
- The weak jobs data in the US and the rising number of cases in India took its toll on the stock markets
- The sharp fall in the stock market was largely led by the banking and the automobile stocks
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| Moody’s downgrades Indian banking sector from Stable to Negative |
- The asset quality is expected to suffer in the coming quarters as the lockdown takes its toll on income levels
- Moody’s expects private banks to be badly hit as realty loans and consumption loans could see the maximum defaults
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| India seeks $6 billion aid from the World Bank and ADB for COVID-19 |
- India has sought support for testing, Coronavirus kits, creating medical infrastructure, mass immunization etc
- World Bank has already committed $1 billion to India but the real challenge for India is to scale up testing for COVID-19
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| Auto companies see deep cuts in sales in the month of March 2020 |
- As was expected the sales of CVs, four-wheelers and even two-wheelers took a deep cut in March
- While CVs took a hit of 80-90% in terms of sales, it was 50% fall for two-wheelers and around 60% for cars
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| FPIs sell Rs.124,000 crore in equity and debt combined in March 2020 |
- This is the largest single-month selling by FPIs since they were first permitted into Indian markets in 1992
- The selling was largely driven by the COVID-19, weak growth expectations and risk-off sentiments overall among FPIs
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| Fitch downgrades India’s GDP growth for FY21 to just 2% |
- This is a downgrade of over 300 bps and they expect the next 3 quarters to be severe pain points for growth
- The lockdown may be temporary but the impact on income levels and demand is likely to be more long-lasting
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| Mahindra group turns down the proposal to invest in Ssangyong Motors |
- Mahindra group has a long term deal with Ssangyong Motors of Koreas since the last few years
- However, considering the tight auto demand globally, the group has decided against investing further money
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| The world markets lost nearly $25 trillion in market cap in 2 months |
- The 30% correction in most of the key markets like the US, UK, Germany, Japan, and India has taken its toll
- The virus has led to a series of lockdowns across the world and that is taking a toll on jobs, incomes, and production
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| Grounded airplanes could pose a serious risk for global insurers |
- It is estimated that the global grounding of airplanes could result in loss claims to the tune of $160 billion
- That would clearly result in a number of insurance companies going bankrupt as this is more of a Black Swan event
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| US hints that oil producers could consider deep oil cuts to hold price |
- Trump has hinted at supply cuts to the tune of 15 million bpd, which should be enough to stabilize oil prices
- Brent crude fell below $25/bbl before bouncing back but the US and OPEC are keen to support the price at these levels
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| SBI MF becomes the largest MF in India in terms of Assets under management |
- Despite the fall in markets, SBI MF managed to boost its AUM to first place, pushing HDFC MF and ICICI Pru behind
- SBI MF was already the leader in equity mutual funds space for a long time with equity AUM of nearly $37 billion
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| Moody’s places IndusInd Bank on Review for a likely Downgrade |
- The sentiments have turned against the bank after it recently announced a 11% shrinkage in its deposit base
- Moody’s has expressed concerns over deposit shrinkage as well as the deteriorating asset quality of the bank
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| India VIX tapers but still remains elevated at the 55 levels |
- The VIX needs to reach its equilibrium levels of less than 20 for the markets to be able to recover from lower levels
- VIX is the fear index and shows a high degree of fear that is still implicit in the option pricing in the market
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| RBI shortens trading timings for money, debt and forex markets |
- The total trading timing will be curtailed to 4 hours to avoid too much volatility in the midst of thin volumes
- However, this curtailment will not apply to exchange-traded debt and other exchange-traded currency derivatives
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| Rupee weakens beyond Rs.76 to the dollar on COVID-19 panic |
- The rupee weakened on expectations that the compression in growth could be substantial and could spike NPAs
- With FPIs withdrawing over Rs.1.25 trillion in March, the sentiments have clearly turned bearish for the rupee
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| Sovereign Wealth Funds are likely to trigger selling pressure in India |
- With most of the SWFs being oil based, the sharp fall in crude prices could force selling in assets that still have value
- In India SWFs account for nearly 6.1% of the total FII Assets Under Custody (AUC), which is large enough to impact
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| ITC ties up with Dominos Pizza to delivery Aashirvad Atta |
- ITC will look to ride the distribution network and feet-on-street army of Dominos to open a new channel
- Dominos also benefits from the brand recall and the customer familiarity of the brand to push its own sales
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| PMI manufacturing falls sharply to 51.2 for March 2020 |
- This sharply lower than the 54.5 recorded in February. While manufacturing is still expanding, momentum is faltering
- The real impact of the lockdown could be felt in the March numbers as the full impact of the COVID-19 will be felt
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| Rating downgrades outpace rating upgrades at CRISIL and ICRA |
- This is a trend that is seen for the first time after the financial crisis that struck post-Lehmann in 2008
- This indicates that domestic debt could be under a lot of strain and downgrades could impact the cost of funds
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