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ETMarkets Morning Podcast (ETMarkets.com)

Market braces for recession; what FPIs are dumping & more

04:39 Min | March 30, 2020, 8:56 AM IST
Tune in! Here's what buzzing on Dalal Street this morning.
Transcript
Hello There! Good Morning. Welcome to the ETMarkets Morning podcast. This is Saloni Goel from ETMarkets.com, and here is all the news you need to start your day

The Headlines:

>> Stock market braces for recession ahead
>> FPIs dumping bank, energy and IT stocks
>> HeroMoto invokes force majeure

AND
>> India Nivesh shuts down PMS

And We have more. Stay with us.

Let’s first have a quick glance at how the markets are looking like...

Nifty futures on the Singapore Exchange traded some 50 points lower at 7am (IST), signalling a negative start ahead for Dalal Street. Elsewhere in Asia, shares slid as fears mounted that the global shutdown for the coronavirus could last for months.

>> Japan's Nikkei 3.2 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.2 per cent while South Korea shed 2.7 per cent.

>> Wall Street stocks tumbled on Friday, ending a massive three-day surge after doubts about the fate of the US economy resurfaced and the number of coronavirus cases in the country climbed. The Dow slumped 4.06 per cent to 21,636 while the S&P500 lost 3.37 per cent to 2,541 and the Nasdaq 3.79 per cent to 7,502.

IN THE CURRENCY MART

The rupee pared its initial gains to settle 27 paise higher at 74.89 against the US dollar on Friday after RBI announced various measures to stimulate growth amid coronavirus-induced lockdown in the country

LET ME NOW quickly GO OVER the top news we are tracking this morning.

STOCK MARKETS MAY BE BRACING FOR RECESSION
Delivery-based trades in India are rising, indicating that a section of the market is factoring in a major recession and wants to eject at the first opportunity. Delivery percentage on the NSE and BSE reached 36.87% in March, higher than their long-term average. Indian markets have lost more than half a trillion dollars in market capitalisation since the Covid-19-induced selloff began late February. Average daily turnover of the cash segment at the NSE and BSE rose 39% and 57% in March, compared with their respective one-year average.

DALAL STREET MAY GIVE UP GAINS
The 14% bounce in Indian stock indices in the last four sessions could face hurdles in the days ahead amid rising cases of coronavirus in India and elsewhere. Analysts expect Nifty to fall back below 8,000 levels and even touch 7,500, as the global economy faces its worst phase since the global financial crisis of 2008-09.

INDIA NIVESH SHUTS DOWN PMS

The PMS business of Mumbai-based brokerage India Nivesh has become the first casualty of the turmoil in the stock market in the past 40 days triggered by the spread of coronavirus. The firm is shutting down its fund management unit for rich clients amid speculation the group has not been able to recover a loan to the promoter of a retail company following the plunge in stock prices.

FPIs SELLING BANKS, ENERGY, IT STOCKS
FPIs have sold shares of banks, financial services, energy and IT in the first fortnight of March, according to data from the NSDL. Nearly 75% of the FPI outflow from Indian equities during March 1-15 was from these four sectors. FPIs have sold shares worth ?25,000 crore between March1and 15 and the outflow is likely to continue in the near term due to redemption in arbitrage funds and impositions of dividend tax from April 1, said fund managers.

Meanwhile...

CUSTODIANS SEEK RELIEF FOR FPIs… Five multinational banks, handling funds and securities of FPIs, have alerted the Indian capital market regulator that several foreign funds, caught in the Covid-19 situation, will be unable to renew their licence unless some of the rules are changed. In a joint letter to Sebi, Deutsche Bank, Citi, JP Morgan Chase, Standard Chartered and HSBC — which act as custodian banks — have asked the regulator to allow scanned copies of documents and emails for renewing registration, registering new funds, and opening bank accounts.

NOW, LET’S HAVE A QUICK LOOK AT SOME OF THE TOP CORPORATE NEWS THIS MORNING

>> Hero MotoCorp said it’s invoking force majeure to suspend full payments to vendors, since it has “no visibility of receivables,” with sales having come to a standstill

>> Sun Pharma said its Halol plant in Gujarat has been classified as 'Official Action Indicated' by the USFDA after a December 2019 inspection.

>> IndiaNivesh has decided to shut down its portfolio management services business, the company said in a communication to its clients.

>> Despite grim business outlook, Indian IT services firms are unlikely to resort to any major staff retrenchment, given the sensitivity of the issue.


>> Largest commodities bourse MCX is offering up to 3x more salaries to select few employees, who are working from office in the city.


LASTLY a look at OIL,

>> Crude oil prices slumped in Asian trade, tracking falls on stock markets after a sharp escalation in the coronavirus crisis over the weekend. WTI crude fell 3.9 per cent to $20 a barrel, while Brent was off 4.9 per cent at $23.

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