Business Live: Stocks risky after worst day in historical past; bonds see no industry in first 20 mins


Stocks started the day strong with the Sensex and the Nifty gaining close to 5% in the initial minutes of trading.

The rally, however, was short-lived as sellers overwhelmed the market soon pushing the indices into the red.

Meanwhile, the economic impact of the coronavirus pandemic is starting to show as governments across the world struggle to prop up their economies.

Join us as we cover the top business stories through the day.

12:00 PM

Aviation stocks drop further after travel ban

The free-fall in airline stocks shows no signs of abating as domestic and international travel have come to a virtual standstill.

PTI reports: “Aviation stocks on Tuesday dropped up to 10 per cent after the announcement of suspension of all domestic operations of Indian airlines from March 25 amid Covid-19 pandemic.

Shares of IndiGo’s parent InterGlobe Aviation tanked 9.99 per cent to Rs 765.05 — their one-year low on the BSE.

SpiceJet also dropped 4.92 per cent to Rs 31.85 – its 52-week low as well as lower circuit.

Airlines will suspend all domestic operations from March 25 amid the outbreak of coronavirus (Covid-19), the Aviation Ministry announced on Monday.

The country has already suspended international flights.”

11:40 AM

Bond market sees no trade in first 20 minutes

 

11:30 AM

Gold could benefit from inflation fueled by virus response, says Goldman Sachs

Gold, a traditional safe haven asset, has failed to rally despite the economic uncertainty over the last few weeks. That might be about to change according to research coming from Goldman Sachs.

Reuters reports: “Goldman Sachs said on Tuesday inationary concerns triggered by the central bank policy response to the coronavirus outbreak should underpin gold prices this year as the “currency of last resort.”

“Combined with the fiscal nature of the current policy response to COVID-19, we believe physical inflationary concerns with the dollar starting near an all-time high will for once dominate financial asset inflation that was a feature of the past decade,” the Wall Street bank said in a note dated March 23.

The announcement from the Fed for ‘open ended’ quantitative easing offsets the negative impact to emerging markets wealth, Goldman Sachs said.”

11:00 AM

Experts urge corporates to avoid pay cuts and layoffs to expedite recovery

Corporations looking to cut costs to survive the current economic downturn are getting some counter-intuitive advice from some quarters.

Edited excerpts from PTI: “Experts are of the view that it is the time for India Inc to send across a long-lasting message and it is their duty to provide a sense of security to their workforce by retaining their existing staff members and that can be achieved as any fresh hiring is anyway unlikely to happen at the time.

There are several areas where expenses can be cut to ensure that staff costs are left untouched, experts said, while listing publicity budget among the “most unnecessary” expense heads in the current scenario. Besides, travel, hiring and training costs have as such gone down, they said.

Several business consultants and HR experts said companies need to be careful when it comes to rationalising expenses as job and pay cuts would further aggravate the problem by delaying the recovery.”

10:40 AM

Australia passes “most significant” economic support package

Talking about governments grappling with the economic cost of the coronavirus pandemic, here’s the Australian government’s most-recent stimulus package.

Some of the details from IANS: “Under the stimulus measures, eligible small and medium sized businesses, and not-for-profits (including charities) that employ people, will receive payments of up to A$100,000 in an attempt to prevent losses.

They also agreed to set aside an extra A$40 billion dollars for urgent unforeseen spending regarding the pandemic.”

10:25 AM

Global economy to contract 1.5% in 2020 due to the coronavirus pandemic

Estimates regarding the growth impact of the coronavirus pandemic are beginning to come in slowly. Here’s one from a Washington-based thinktank.

IANS reports: “The global economy was expected to contract 1.5 per cent in 2020 amid the coronavirus pandemic, according to the Washington-based Institute of International Finance (IIF).

The IIF is a global association of the financial industry with over 450 members from more than 70 countries and regions, reports Xinhua news agency.

“We cut our global growth forecast from 2.6 to 0.4 per cent in the last two weeks, but the building COVID—19 pandemic, the OPEC price war and mounting credit stress in advanced and emerging markets continue to reshape the picture in fundamental ways,” the IIF said in a report published on Monday.

“Our global growth forecast now stands at -1.5 per cent, with a contraction of 3.3 per cent across mature markets and growth of only 1.1 per cent,” in emerging markets, the report said, adding that there was “huge uncertainty” about the economic impact of COVID-19.”

 

10:15 AM

Stock market update: Stocks trade in the red after losing all initial gains

Ashish Rukhaiyar reports from Mumbai:

Equity benchmarks opened on a strong note on Tuesday–a day after registering their worst single-day fall–but failed to maintain the gains as the underlying weakness in investor sentiments again led to selling in most stocks.

The 30-share Sensex, which gained nearly 1,500 points to touch a high of 27,463 in the first few minutes of the session, dipped into the red to trade at 25,843.39, down a marginal 138 points at 10:07 AM. The Nifty was at 7,570.55, down 39.70 points.

The India VIX jumped over 15% to touch a record 82.91. On BSE, more than 1,000 sticks were in the red, as against around 500 gainers. In the Sensex pack, 18 stocks were in the red.

9:45 AM

Stocks fail to bounce back

The benchmark stock indices had a strong opening this morning but lost most gains within minutes.

The Sensex and the Nifty were up close to 5% this morning after yesterday’s heavy losses but lost most of their gains to trade with gains of around 1%.

It is worth noting that stocks have witnessed strong intermittent rallies since the time they started crashing earlier this month. Investors, however, have continued to sell into these rallies.

Meanwhile, the rupee has shown some strength.

PTI reports: “The Indian rupee witnessed marginal recovery in early trade and appreciated by 18 paise to 76.02 against the US dollar on Tuesday tracking positive opening in domestic equities.

At the interbank foreign exchange the rupee opened at 76.02, registering a rise of 18 paise over its previous close.

On Monday, rupee had settled at 76.20 against the greenback.”

9:30 AM

Coronavirus lockdown affects delivery of essential goods

The lockdown of cities and states across the country has affected the free movement of many essential goods, say e-commerce players. This could further depress economic activity.

PTI reports: “With lockdowns being imposed in various parts of the country to contain the spread of coronavirus, e-commerce players, including Amazon India, on Monday faced disruption in the delivery of even essential products to their customers.

Online retailers pointed out that their delivery staff is being stopped by local police and urged authorities to streamline the movement of delivery agents and goods.

Industry watchers said there is an urgent need to clarify the kind of products that are allowed to be delivered by ecommerce companies.

Further, they said there is a need for uniform classification of essential items across various states and that instructions need to flow down clearly to the last mile, where the delivery agents are facing issues.”

9:15 AM

Stocks set to bounce back after worst fall in history

In the pre-open minutes, the Nifty was up around 3% while the Sensex gained 4% as investor sentiment improved after yesterday’s historic fall.

Yesterday, the Sensex witnessed its worst fall in history, crashing over 13% over the nation-wide economic shutdown to control the spread of the coronavirus pandemic.

 



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