BQuick On April 27: Top 10 Stories In Under 10 Minutes

This is a roundup of the day's top stories in brief.

1. India's Deadliest 24 Hours As Covid-19 Cases Cross 28,000

The Covid-19 pandemic has now infected over 28,000 people in India as the nation mulls extending a lockdown for a second time.

• India added 1,463 new cases of Covid-19 in the last 24 hours, taking the total tally to 28,380, according to the health ministry's update at 5 p.m.
• This includes 886 deaths and 6,362 patients who have recovered.
• Over the last 24 hours, there have been 448 recoveries and 60 deaths.
• This was the most number of fatalities in India recorded in a day.

• There are now eight states with more than 1,000 Covid-19 cases in India.

Follow the Covid-19 outbreak in India here.

Globally, cases crossed 2.9 million leaving over 207,000 people dead.

• Lockdowns across Europe were eased with a drop in new cases. Italy said it will ease restrictions next week, while Germany reopened some schools.
• U.K., where Prime Minister Boris Johnson returned to work, warned that lifting the lockdown could lead to a second spike.
• The WHO took a swipe at U.S. saying its difficult to understand why it would reduce funding to the international health body amid a pandemic.

Track the developments from across the globe here.

2. States Seek Lockdown Extension, Gradual Resumption In Economic Activity

In their meeting with Prime Minister Narendra Modi on Monday, some chief ministers sought an extension in the nationwide lockdown to contain the coronavirus pandemic, while gradually resuming economic activity.

• They were unanimous that with the increase in number of Covid-19 cases, a cautious approach should be followed, Puducherry Chief Minister V Narayanasami told reporters after the meeting.
• Most of his counterparts from states ruled by the Bharatiya Janata Party wanted the lockdown to continue and slowly resume the economic activity, he said.
• Odisha Health Minister Naba Das, who attended the video conference along with Chief Minister Naveen Patnaik, told ANI later that he demanded that the lockdown should continue for one more month.
• Narayanasami, however, said he called for gradually lifting the lockdown as states are losing revenue. Economic activity needs to start with certain restrictions so that people also get employed, he said, adding that the central government must release pending GST compensation to states immediately.
• PM Modi, who so far stressed on saving lives and prevention, in a statement after the meeting also said importance needs to be given to the economy as well.

Today was the 4th interaction with CMs. We continued discussions on COVID-19 containing strategy as well as aspects relating to increased usage of technology, reforms and more. https://t.co/xB7pnjmh2P

April 27, 2020

Here are the other suggestions that were discussed in the meeting.

3. Coming Soon: Government Guarantee On Small-Business Loans?

India is considering a proposal to guarantee as much as Rs 3 lakh crore ($39 billion) of loans to small businesses as part of a plan to restart Asia's third-largest economy, which is reeling under the impact of a 40-day lockdown, people with knowledge of the matter told BloombergQuint.

• Under the proposal, small firms will be eligible to borrow an additional 20 percent of their credit limit, the people said, asking not to be identified as the discussions are private.
• The extra debt will be fully backed by Prime Minister Narendra Modi's administration, the people said.
• The government will set up a special fund to pay for any defaults, they said.

With the economy set to contract for the first time in four decades, Modi's endorsement is the only way to make it attractive for banks to lend.

India's central bank Governor Shaktikanta Das underlined the need for fiscal measures to support the economy, saying a slippage in budget gap target was unavoidable amid the coronavirus crisis.

• The government is working on an economic package to tackle the impact of the virus, Das told Cogencis newswire in an interview whose transcript was released by the Reserve Bank of India Monday.
• Meeting the fiscal gap goal for the financial year started April 1 -- 3.5 percent of gross domestic product -- was very challenging and he expects the government to make a judicious call on managing the deficit.

Whether relating to the deficit or liquidity, Das said any measure will have to be timely.

4. Indian Stocks Rise; Oil Plunges Again

Indian equity markets ended the first trading day of the new week with gains, albeit off the highest point of the day.

• The S&P BSE Sensex ended at 31,743 gaining 1.3 percent during the day.
• The index fell 360 points from its day's high of 32,103.
• The NSE Nifty 50 index too fell nearly 100 points from its day's high of 9,377 to end at 9,282 up by 1.4 percent.
• Forty two out of the 50 index constituents ended with gains.
• All sectoral indices ended the day with gains with the Nifty Bank and the Nifty I.T. index ending with gains of 2.5 percent each.

Follow the day's trading action here.

U.S. stocks climbed alongside equities in Europe and Asia as major economies edged toward reopening, the Bank of Japan boosted stimulus measures and corporate results rolled in.

• Financial companies were among the best performers in the U.S. amid a surprisingly good earnings report from Deutsche Bank and continued talk of easing the lockdowns that have helped contain the coronavirus.
• The misery for West Texas oil continued and futures in New York tumbled below $13 a barrel amid a glut of crude.
• The euro and pound gained.

Get your daily fix of global markets here.

5. RBI Comes To Mutual Funds' Rescue

The Reserve Bank of India has opened a special 90-day liquidity facility for mutual funds which are facing redemption pressure.

• The facility comes days after Franklin Templeton decided to wind-down six credit schemes, locking in nearly Rs 30,000 crore in investor funds.
• The special facility will channel Rs 50,000 crore in liquidity towards mutual funds, should they choose to use it.
• Similar windows were opened in 2008 and 2013, when credit markets were under stress.

Find out how the liquidity window will work and what the measure could mean for mutual funds.

The NSE brokers' lobby wants the market regulator to set up a high-level committee to take over the management of Franklin Templeton Mutual Fund, after the asset manager wound up six debt schemes citing liquidity issues caused by the new coronavirus pandemic.

• The Association of National Exchange Members of India also asked SEBI to examine investment decisions of the mutual fund, besides safeguarding erosion of the investor wealth, according to its letter to the Finance Ministry.
• The brokers, however, sought the market regulator's intervention to safeguard the Rs 86,000-crore investment across all Franklin Templeton's mutual fund schemes as of March.

It said that the fund house's investment in low-rate paper is questionable.

6. IndusInd Bank Profit Falls On Higher Provisions

IndusInd Bank Ltd.'s quarterly profit missed analysts' expectations as the lender more than doubled the provisioning for its rising bad loans.

• Net profit fell 16.2 percent over last year to Rs 301.8 crore.
• Gross non-performing asset ratio rose to 2.45 percent from 2.18 percent.
• Provisioning more than doubled over the previous quarter to Rs 2,440.3 crore.

Here's what the management said about the upcoming impact of Covid-19 on its books.

7. WTI Crude's Negative Plunge And The Crisis At MCX

Five days before WTI crude price fell into negative territory, the CME Group, operator of commodity exchange Nymex, had alerted that such an unprecedented event could unfold. It asked members to prep systems for prices below zero.

• India's Multi Commodity Exchange, which offers futures mirroring New York crude oil prices, its second-most traded contract on the platform, didn't pay heed. Neither did brokers and the regulator in India.
• For brokers in India tracking WTI crude oil prices for trading on MCX, it was a double whammy.
• Not only was the exchange not prepared for negative prices, but they were also locked out of trading at 5:00 p.m. as the Securities and Exchange Board of India had curtailed trading hours during the lockdown.

Now three brokers Motilal Oswal, Religare and PMC have dragged moved the Bombay High Court for losses. Here's what they allege.

8. Financing The Covid-19 Response

The shortfall in the FY21 budgeted gross tax revenue could be over Rs 5 lakh crore, cautions M Govinda Rao, member of the 14th Finance Commission.

• If an additional expenditure of Rs 3 lakh crore is considered, the slippage in fiscal deficit could be almost 2.5 percent of GDP at the central level alone.
• We could end up with an aggregate deficit of more than 11 percent of GDP even without considering the off-budget liabilities.
• Under the circumstances, it may be necessary to monetise a part of the deficit by the RBI directly lending to the government.

Here are the challenges and choices, according to Rao.

9. Why Specialty Chemical Makers May Recover From Covid-19 Setback Early

As a national lockdown to contain the novel coronavirus outbreak froze supply chains, specialty chemical makers too faced logistics and labour problems.

• But it is one sector that's expected to rebound faster than others.
• That's because the industry continues to operate, though at a reduced capacity, as it supplies chemicals to essential sectors such as pharmaceuticals, personal health and hygiene and agrochemicals.
• Analysts and company executives expect performance to improve as the sector relies on exports.
• Moreover, supply from China is likely to reduce in this category, providing a bigger opportunity for domestic specialty chemical makers.

Speciality chemical companies have the potential to scale up their production once economic activity resumes.

Related Coverage

• Clothing industry turmoil to cut cotton grower India's sales.
• PIL seeks full refund of flight tickets cancelled during lockdown, Supreme Court issues notice.
• Coronavirus lingers in air of crowded spaces, a new study finds.
• Wall Street quants are turning their skills to the virus fight.

10. Shapoorji Pallonji Arm's Rs 1,554-Crore Deal

Shapoorji Pallonji Infrastructure Capital is selling five solar power assets to KKR & Co. in a deal worth Rs 1,554 crore.

• The 317 MW portfolio includes a 169 MW solar power plant in Maharashtra and 148 MW in Tamil Nadu.
• “SP Infra has signed definitive agreements with KKR, under which the company will sell five operational solar energy assets to KKR for a total consideration of Rs 1,554 crore ($204 million),” the infrastructure developer said in a statement on Monday.
• Details of the deal have not been disclosed.

The transaction is subject to customary approvals.

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