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COVID fear: Sensex loses 806 pts, gold hits life-time high

Italy saw virus cases jumping exponentially from three on Friday morning to more than 150 by Sunday. Italy’s spike now marks the biggest outbreak outside of Asia.

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Stock Market Down

Mumbai, Feb 24 : Indian stock markets alongside global equities markets tumbled and prices of safe haven assets such as gold logged a record high over fears of further disruption in economic activity owing to the jump in coronavirus-related deaths, particularly outside China.

Growth worries owing to the deadly virus outbreak knocked down the global oil prices by over 3 per cent and caused a sell-off in manufacturing sector stocks.

Nifty metal index crashed 5.36 per cent as investors distanced themselves from companies such as Jindal Steel & Power Limited, JSW Steel Limited, SAIL and Tata Steel Limited.

Meanwhile, gold’s record breaking run continued on Monday as investors sought more and more safe haven assets over increased uncertainty due to soaring coronavirus cases. Gold futures for April delivery topped the Rs 43,000 per 10 gm mark for the first time.

“Demand for safe-haven assets spiked as fresh coronavirus cases in South Korea and Italy indicated that business impact could be higher than thought earlier. The Trump-Modi meet is not providing clues to the market regarding trade deals, but the market is hoping for some hints in the future,” said Vinod Nair, Head of Research at Geojit Financial Services.

After the volatility index or the India ‘VIX’ climbed over 25 per cent, the Sensex closed 806.89 points lower at 40,363.23. The broader Nifty settled at 242.25 points lower at 11,838.60. The BSE mid-cap index closed 1.60 per cent lower while the small caps index closed lower by 1.58 per cent.

Risky asset classes such as equities bore the brunt of coronavirus spread outside China. South Korea reported its seventh coronavirus death and 161 new confirmed cases on Monday, bringing the total number to 763.

Italy saw virus cases jumping exponentially from three on Friday morning to more than 150 by Sunday. Italy’s spike now marks the biggest outbreak outside of Asia.

In China, the epicentre of the outbreak, coronavirus-related death jumped past 2,600. The deadly virus has infected more than 77,000 people in China and was described by Chinese President Xi Jinping as the “largest public health emergency since the founding of the country”.

Asian share indexes were a sea of red. Korea’s KOSPI Index slipped nearly 4 per cent, Shanghai Composite Index was down 0.28 per cent. Besides, Australia’s benchmark index slid 2.2 per cent while New Zealand was about 1.3 per cent lower.

“Seoul led a sharp drop across Asian and European equity markets Monday as South Korea announced a surge in COVID-19 infections, while oil plunged and safe-haven assets rallied on growing concerns about a possible pandemic,” said Deepak Jasani of HDFC Securities.

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Extend lockdown period till April 30 to contain Covid-19: CAIT

“Nearly 7 crore small businesses employ another forty crore people and therefore if by any chance the disease starts spreading among the traders of the country, then it will have a devastating effect on the entire nation.”

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Coronavirus india lockdown

New Delhi, April 8 : The Confederation of All India Traders (CAIT) has urged the Centre to extend the lockdown period till April 30 to curb the spread of Covid-19.

Accordingly, CAIT in a letter to Prime Minister Narendra Modi said that it has made this recommendation based on a survey conducted with senior trade leaders of all states.

“Although the traders will be facing several trading, economic and financial challenges, yet in the interest of the Country, the traders are well prepared to extend best services to the nation,” the confederation said in a statement.

“However, whatever decision the Government will take, the trading community across the country will follow the same in letter and spirit,” it said further.

“Even though the economic and financial impact of a continued lockdown may be unbearable, we are hopeful that we will fight back strongly to resurrect our economy and rebuild our resources with due support from the government in the form of a well thought out financial and economic stimulus to the small and medium trading sector.”

The letter said the confederation has undertaken a survey with prominent trade leaders of all states of the country and have come to the conclusion that during these troubled times, “it would be in fitness of things, if the current lockdown period is extended up to April 30, so to negate any prospect of further spreading of COVID-19”.

The letter said that in view of the burgeoning number of cases of Covid-19 in India over the last one week and to add impetus to the Government’s overall effort to combat the disease and prevent community spread, the business community stands with “you in solidarity and whatever the decision, the government takes, the trading community will abide by such decision and follow the same in its true letter and spirit”.

“After this period is seen through and after assessing the ground realities on that day, we should plan a staggered exit and start lifting restrictions if the situation permits. Almost all national leaders of domestic trade have expressed grave health and safety hazards to the retailers because of their incessant exposure to the public at large,” the letter read.

“Nearly 7 crore small businesses employ another forty crore people and therefore if by any chance the disease starts spreading among the traders of the country, then it will have a devastating effect on the entire nation.”

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Goldman Sachs halves India’s FY21 GDP growth to 1.6%

The report, however, said that a strong sequential recovery in the second half of the fiscal year is expected based on three assumptions.

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Goldman Sachs

New Delhi, April 8 : The outlook for the Indian economy looks bleak as the Goldman Sachs has revised its forecast for the country’s real GDP growth rate for the financial year 2020-21 to 1.6 per cent.

In a report, it said that with the spread of the pandemic and the eventual lockdown have resulted in a significant contraction in economic activity.

The outlook has been revised downwards from the previous forecast of 3.3 per cent.

“The 1.6 per cent growth for FY21 would be deeper compared to widely perceived ‘recessions’ India experienced in the 1970s, 1980s, and in 2009. Notably, the global COVID-19 crisis — or more precisely, the response to that crisis — represents a physical (as opposed to purely financial) constraint on economic activity that is unprecedented in postwar history,” it said.

It said that despite the policy support provided so far the nation-wide shutdown, and rising public anxiety about the virus are likely to lead to a sharp deterioration in economic activity in March, and in the next quarter.

The report, however, said that a strong sequential recovery in the second half of the fiscal year is expected based on three assumptions.

First, the 3-week nationwide lockdown, which is expected to be removed only in a staggered fashion, and social distancing measures reduce new infections over the next 4-6 weeks. Second, while the fiscal easing so far has been limited, the expectation is for further fiscal stimulus by the Centr and the states.

“Third, we expect the RBI to continue with its monetary easing policy, along with liquidity infusion measures. While more forceful policy support could present some upside risk, the recovery could further be delayed if the pandemic is not brought under control globally and domestically over the next few months,” it added.

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NAREDCO seeks $200 bn relief for the entire economy

“Since real estate accounts for 6-7 per cent of India’s GDP and employs nearly 10-11 per cent of population, we urge the government to focus on the demand of the developers.”

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NAREDCO

Mumbai, April 8 : Real estate industry body NAREDCO has requested the Centre for $200 billion relief for the entire economy to meet the impact of the Covid-19 outbreak.

NAREDCO said that real estate has been under consistent stress since the last few years and that market dynamics have changed rapidly which has resulted in rising unsold inventories in the country.

“The Covid-19 pandemic has paused the real estate sector while disrupting the businesses across the nation. While the RBI and the Finance Minister have taken several measures to ease the load on consumers’ shoulder, real estate collectively grapples with the impact of the pandemic,” NAREDCO said in a statement.

According to the real estate industry body, in order to keep up with the world economy, the Centre should suspend all NCLT activities for next 6 months considering the downfall of the economy of India.

“The idea is to provide a breathing space to companies who have faced huge losses due to rapidly decreasing stock prices, which has made high net worth companies prone to be taken over by foreign investors, the results of which can be devastating for India,” the statement said.

“Since real estate accounts for 6-7 per cent of India’s GDP and employs nearly 10-11 per cent of population, we urge the government to focus on the demand of the developers.”

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