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Market in Red as panic selling continues

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Sensex down

Mumbai, March 16: The BSE Sensex plunged over 2,100 points on Monday while the Nifty 50 cracked by 449 points or 4.51 per cent to 9,506 due to escalating global coronavirus pandemic.

The Nifty50 on the National Stock Exchange also dropped over 500 points to fall below the 9,500 mark.

At 9.37 a.m., the Sensex was trading at 31,960.19, lower by 2,143.29 or 6.28 per cent from the previous close of 34,103.48.

It opened at the intra-day high of 33,103.24 and has touched a low of 32,206.23 points.

All sectoral indices at the National Stock Exchange were in the red with Nifty private bank and financial service down by 7 per cent each, realty by 6.7 per cent, metal by 5.9 per cent, and IT by 4.9 per cent.
Among stocks, IndusInd Bank was the top loser after dropping by over 11 per cent at Rs 714 per share. ICICI Bank lost by 8.4 per cent and Axis Bank by 8 per cent while HDFC and Bajaj Finance dipped by 8.3 per cent and 7.4 per cent respectively.

The other prominent losers were Adani Ports, Titan, Vedanta, UPL and Tata Steel.

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SC notice to Tata Sons on cross-appeal by Mistry against NCLAT verdict

Mistry’s side had also wanted to place a note apparently on an interim arrangement, but it was not accepted by the court.

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Ratan Tata

New Delhi, May 29 : The Supreme Court on Friday agreed to hear a cross-appeal filed by Cyrus Mistry, seeking more relief than granted by the NCLAT verdict in December 2019.

The apex court issued notice to Tata Sons Pvt Ltd (TSPL) and others, and tagged the cross-appeals with the appeals filed by Tata Sons, Ratan Tata and others challenging the NCLAT verdict, which reinstated Mistry as the Executive Director of Tata Sons. Mistry and his firm sought removal of anomalies in the National Company Law Appellate Tribunal (NCLAT) verdict to get representation on the TSPL board.

A bench of Justices A.S Bopanna and Hrishikesh Roy, which took up the matter through video conferencing, said: “Issue notice. Tag with Civil Appeal Nos… And connected matters, if any. In the meantime, pleadings be completed by the parties within a period of four weeks from today. List the matter(s) thereafter.”

In January, the apex court had stayed the NCLAT order.

Through the cross-appeal, Mistry is seeking representation on the board in proportion to the 18.37 per cent stake held by his family. The cross-appeal argued that it was incumbent on the NCLAT to have granted proportionate representation that would have ensured that the interests of the SP Group are protected in future.

In the petition, Mistry has described the group’s relationship with Tatas as a quasi-partnership relationship of a vintage of over 60 years, holding 18.37 per cent in the equity share capital of Tata Sons and whose stake is now worth over Rs 1.5 Lakh crore.

In January, the apex court had observed, “You (Cyrus) have been out of the saddle for a long time…how does it hurt you today.” Tatas were represented through senior advocates A.M. Singhvi, Harish Salve, Mukul Rohatgi and Mohan Parasaran.

A heated argument broke out on the court’s remark on the stay of the tribunal judgement. Senior advocate C.A. Sundaram, representing the company Cyrus Investment Pvt Ltd, contended instead of staying the tribunal judgement, the court could order status quo; and a notice could be issued within two weeks to file a reply.

Mistry’s side had also wanted to place a note apparently on an interim arrangement, but it was not accepted by the court.

Senior advocate N.K. Kaul represented Mistry and senior advocate Shyam Divan represented the shareholders on Mistry’s side. Mistry’s side also said that they have been sidelined completely.

Sundaram contended before the bench he was not pressing on relief in connection with the reinstatement, instead he was against the wrong process adopted to remove Mistry.

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Freefall: Slowdown, pandemic pulls India’s FY20 GDP growth rate to 11 yr low

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slowdown in global economic growth

New Delhi, May 29 : The general economic slowdown, along with the impact of the global Covid-19 pandemic, pulled India’s GDP growth rate down to 3.1 per cent in the last quarter of 2019-20.

The Q4 growth rate was slower than 4.1 per cent in Q3 and 5.7 per cent reported for the like period of the previous fiscal.

Consequently, India’s FY20 GDP declined to 4.2 per cent from 6.1 per cent in FY19. This is the slowest rate of India’s GDP growth in the last 11 years.

However, the rate, if looked at from the prism of constant prices at 2011-12 prices, would still be the lowest in the last 8 years.

“Real GDP or Gross Domestic Product (GDP) at Constant (2011-12) Prices in the year 2019-20 is now estimated to attain a level of Rs 145.66 lakh crore, as against the First Revised Estimate of GDP for the year 2018-19 of Rs 139.81 lakh crore, released on 31st January 2020,” the National Statistical Office (NSO) said.

“The growth in GDP during 2019-20 is estimated at 4.2 per cent as compared to 6.1 per cent in 2018-19.”

“GDP at Constant (2011-12) Prices in Q4 of 2019-20 is estimated at Rs 38.04 lakh crore, as against Rs 36.90 lakh crore in Q4 of 2018-19, showing a growth of 3.1 per cent.”

On a sequential basis, the quarterly growth rate has progressively come down from 5.2 per cent in Q1 of 2019-20 to 4.4 per cent in Q2 and 4.1 per cent in Q3.

Last fiscal, the Indian economy faced a severe demand slowdown on account of high GST rates, farm distress, stagnant wages and liquidity constraints.

Additionally, the national lockdown implemented to curb the Covid-19 outbreak has dealt a severe blow to the economy.

However, the NSO said that these estimates on quarterly as well as annual basis are likely to undergo revisions.

“In view of the global Covid-19 pandemic and consequent nationwide lockdow nmeasures implemented since March 2020, the data flow from the economic entities has been impacted,” the NSO said.

“As some of these units are yet to resume operations and owing to the fact that the statutory time-lines for submitting the requisite financial returns have been extended by the government, these estimates are based on the available data.”

Besides, the NSO data showed that Gross Value Added (GVA) growth rate during the fourth quarter of 2019-20 on a YoY basis fell to 3 per cent, from 5.6 per cent during the like period of the previous fiscal.

Similarly, the GVA growth rate during 2019-20 on a YoY basis declined to 3.9 per cent, from 6 per cent during the like period of 2018-19.

The GVA includes taxes but excludes subsidies.

As per the estimates, the growth in the ‘agriculture, forestry and fishing’ is estimated to be 5.9 per cent from YoY growth of 1.6 per cent and ‘mining and quarrying’ of 5.2 per cent from (-) 4.8 per cent.

On the other hand, ‘manufacturing’ is (-) 1.4 per cent from a YoY rise of 2.1 per cent and construction activity plunged by (-) 2.2 per cent from 6 per cent.

Furthermore, the GVA growth rate of ‘electricity, gas, water supply & other utility services’, ‘trade, hotels, transport, communication and services related to broadcasting’, ‘financial, real estate and professional services’ and ‘public administration, defence and other services’ respectively also declined during this period.

Another key growth gauge — Gross Fixed Capital Formation — which underscores the overall acquisition of produced assets in the economy, at constant (2011-2012) prices, is estimated to have declined to 28.8 per cent from a YoY rise of 31.7 per cent in Q4 of 2018-19.

For 2019-20, the GFCF fell by (-) 2.8 per cent from a YoY rise of 9.8 per cent in the previous fiscal.

Commenting on the GDP data, D.K. Aggarwal, President, PHD Chamber of Commerce and Industry, said: “We are optimistic that the growth will revive in the second half of the financial year 2020-21 on the back of various reform measures announced by the Government during the last few weeks.”

India Ratings & Research’s Chief Economist Devendra Kumar Pant said: “From production side, the growth was driven by agriculture and public administration. Government expenditure has helped both GVA and GDP growth.”

“Going forward, with private expenditure growth dwindling due to the shutdown and labour migration, investment demand contracting due to weak consumption demand and stretched corporate balance sheet, government expenditure will again be the growth engine in FY21.”

According to Suman Chowdhury, Chief Analytical Officer, Acuite Ratings & Research: “The figures for FY20 largely reflect the intensification of the economic slowdown that started to build up from Q2/Q3 of FY19. The gradual slowdown in the growth trajectory is indicated in the revised quarterly GDP figures and the estimated print for FY20 at 4.2 per cent as compar ed to 6.1 per cent in FY19.”

“Clearly, the growth momentum got further dampened towards the year end due to the economic disruption from the virus outbreak that already started a couple of weeks before the onset of the pan India lockdown in the last week of March.”

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India’s core industrial output crashes by over 38% in April

The eight core industries include coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity.

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industrial production output

New Delhi, May 29 : The output of India’s eight major industries’ crashed in April 2020 by over 38 per cent on account of the national lockdown implemented to curb the Covid-19 outbreak.

On a sequential basis, the Index of Eight Core Industries had declined by 9 per cent in March 2020.

The eight core industries include coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity.

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