| News Announcement |
Impact Analysis |
| Sensex and Nifty recover after 4 days of continuous fall |
- Both Nifty and Sensex touched new lows in the week as the Coronavirus situation worsened during the week
- The bounce was largely driven by short covering and it remains to be seen if it can sustain in the coming week
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| Dow Jones Index lost the most in a single week since the 2008 crisis |
- After a strong start, the Dow on Friday gave up all its gains and more and closed 908 points lower in trade
- The rapid spread of the virus in the US, massive shutdowns and the likely impact on GDP growth spooked markets
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| Brokers and investors start demanding scrapping of LTCG tax |
- The demand is to scrap the LTCG tax so that investors have an incentive to stay invested in equities for the long term
- In addition, the markets are also demanding that dividends and capital gains be made totally tax free for investors
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| Yes Bank resumes normal operations and is off to a smooth start |
- RBI had readied a war chest of Rs.60,000 crore to handle any run on deposits in Yes Bank, but that was not required
- The SBI assurance appeared to work as well as the confidence that Yes Bank will shore up funds with Rs.20,000 crore CDs
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| Alliance Bernstein downgrades HDFC Bank target price to half |
- The downgrade of HDFC Bank comes in the backdrop of a surge in unsecured creditors and succession planning issues
- The HDFC Bank stock is already available at a P/E ratio of less than 12X, one of the cheapest in recent memory
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| SEBI steps in to tackle volatility by making short selling harder |
- Under the new rules selling in futures will only be permitted with underlying after OI crosses Rs.500 crore
- In addition, the margins have been increased and the MWPL limits have been brought down to curb volatility
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| RBI to purchase bonds worth Rs.30,000 crore in the coming week |
- This is part of the RBI open market operations (OMO) to infuse liquidity into the financial system
- RBI has stayed away from cutting rates although most of the countries across the world have already taken the plunge
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| Court sends Rana Kapoor into judicial custody till the 02nd of April |
- Rana Kapoor is being investigated by the ED under the Prevention of Money Laundering Act
- He is alleged to have created dummy accounts and transactions to transfer money into foreign accounts
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| Japan’s Kubota to acquire 10% stake in Escorts Ltd. for Rs.1042 crore |
- The acquisition happens at a price that is almost a 40% premium to the current market price
- This deal will consolidate a relationship that has been existing as a joint venture for a very long time
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| ONGC and GAIL bounce back on mega dividend plans |
- PSU companies are declaring mega dividends to help the government meet its revenue targets for the year
- In addition, private companies are also declaring big dividends to escape the higher tax incidence post April 2020
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| India looks to fill up its strategic petroleum reserves with crude |
- The idea is to maintain a minimum inventory for half a month of local oil needs to ensure oil security
- Normally, countries adopt the practice of expanding their oil reserves at a time when oil prices are at a low
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| Pharma stocks lose less than the Nifty in the month of March |
- While the Nifty lost nearly 25% in March, the Pharma Index lost only 11% during the month
- Apart from the weak rupee, the pharma stocks also gained due to the sharp pick-up in demand for generics and APIs
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| MP Chief Minister, Kamal Nath, resigns ahead of the trust vote |
- That was inevitable after the speaker accepted the resignations of the 16 Congress MLAs
- Earlier the Supreme Court had ordered the speaker to hold the trust vote before 5 pm on Friday the 20th of March
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| NBFCs worried over spike in yields on commercial paper (CP) |
- CPs have been a popular short term instrument for the NBFCs to borrow money to on-lend in the markets
- However, the recent selling in CPs has led to a sharp spike in yields putting at risk the cost of funding for these NBFCs
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| SEBI extends the last date for quarterly and annual financial results |
- The dates for quarterly filing and annual filing have been pushed back by 45 days and 1 month respectively
- This has been triggered by the Coronavirus scare which led to a partial to virtual shutdown for most businesses
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| Carnage continues on IndusInd Bank on the stock markets |
- The stock has lost nearly 50% since the beginning of March and over 85% since the beginning of the year
- After the Yes Bank episode, the markets have become wary of any private bank that that has high NPA potential
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| Rupee breached the Rs.75/bbl mark during the week |
- This was largely driven by an impending slowdown, a strong dollar index and a surge in FII flows out of India
- While the RBI has been on the sidelines, it did intervene to support the rupee around the 75 mark
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| Most agencies downgrade India GDP for FYF21 and FY20 |
- The consensus downgrade for FY21 appears to be from 5.7% down to 5.1% due to the Coronavirus aftermath
- The FY20 GDP growth may take a big hit in the fourth quarter and may even end up below 4% in the quarter
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| Supreme Court rejects plea for reduction in AGR charges |
- Supreme Court came down heavily on the DOT and the telecom companies for non-adherence to the order
- There will be an additional hearing in April where the Solicitor General will present the DOT cases
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| Government likely to cut rates on small savings by next month |
- This has been necessitated to prevent the distortion of the yield curve due to the tax shields on small savings
- In addition, the high rates on small savings were also making it tough for banks to cut rates and transmit repo cuts
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| IT sector takes a big hit in value during the month |
- The market cap loss on IT sector has been to the tune of nearly $31 billion in the month of March
- That is despite the strong dollar. IT stocks have been hit by fears that the slowdown could hit IT spending substantially
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