June 16, 2020 / 3:35 AM / 18 days ago

Morning News Call - India, June 16

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    FACTORS TO WATCH
    3:00 pm: ASSOCHAM webinar to discuss impact of COVID-19 driven lockdown on
non-banking finance sector in Mumbai.
    
    PROMOTION 
    LIVECHAT - REUTERS GLOBAL MARKETS FORUM
    Chris Weston, Head of Research at Pepperstone in Sydney, joins us to discuss
the equity market rally, how much of the second wave of COVID-19 is a worry for
the markets, and what to expect from here. To join the conversation at 9:30 am
IST, click on the link: refini.tv/2P8N0Wp
    
    
    INDIA TOP NEWS
    • Election-bound Bihar state records nearly double national jobless rate
    India's eastern Bihar state, one of the country's largest and poorest
states, posted a steep rise in unemployment in the year ended June 2019 to
record nearly double the national jobless rate, only months out from elections.

    • RBI may need to choose between FX, bond interventions in H2-economists
The Reserve Bank of India's interventions in the foreign exchange market have
helped reserves climb to a record $501.7 billion in early June, but economists
say the pace of increase is likely to taper in the second half of this fiscal
year.
    • Tata Motors to shed 1,100 JLR jobs after pandemic hits earnings
    Tata Motors expects to shed about 1,100 temporary jobs at Jaguar Land Rover
after it raised the cost-cutting target at its luxury unit by 1 billion pounds
to ride out the disruptions caused by the coronavirus outbreak.
    • Indian exports fall by over 36% in May
India's merchandise exports shrank by more than a third in May from a year ago,
dragged down by a fall in global demand and shipments due to the outbreak of
coronavirus, trade ministry data showed on Monday.
    • Lakshmi Vilas Bank approached by potential investor
    Indian private lender Lakshmi Vilas Bank said on Monday it had been
approached by Clix Capital but gave no details after local media reported that
the finance company had proposed taking a significant stake in LVB.
    • Criticism mounts as New Delhi hospital beds run out amid COVID-19 surge
    India's capital is fast running out of hospital beds amid a surge in
coronavirus cases and is struggling to contain the pandemic, after critics said
it did too little to prepare and reopened shopping malls and temples too soon.
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    • India steps up bet on gas with first gas trading exchange
    India on Monday launched its first gas trading exchange, enabling local and
foreign players such as Shell, Vitol and Trafigura to sell directly to domestic
customers.
    • Sweden's Sinch to buy India's ACL Mobile for $70 million
    Fast-growing Swedish cloud computing services provider Sinch said on Monday
it had agreed to buy Indian firm ACL Mobile for about $70 million in cash, its
third large acquisition since the start of March.
    • Dutch Tata Steel employees hold further strike actions
    Dutch Tata Steel employees held further strike actions on Monday to protest
against job cuts planned as part of a broader restructuring, the FNV union said.

    
    
    GLOBAL TOP NEWS
    • Bank of Japan keeps policy steady, eyes recovery from pandemic 
The Bank of Japan kept monetary settings steady on Tuesday and stuck to its view
that the economy will gradually recover from the coronavirus pandemic,
signalling that it has taken enough steps to support growth for now.
 
    • Beijing puts fresh curbs to stop spread of coronavirus out of Chinese
capital
    Beijing authorities imposed more restrictions to stop the spread of a fresh
outbreak of coronavirus in the Chinese capital to other provinces, banning
outbound travel of high-risk people and suspending some transportation services
out of the city.
    • Fed will begin purchasing corporate bonds on Tuesday
    The Federal Reserve said it will start purchasing corporate bonds on Tuesday
through the secondary market corporate credit facility (SMCCF), one of several
emergency facilities recently launched by the U.S. central bank to improve
market functioning in the wake of the coronavirus pandemic.
    
    
    Thomson Reuters/INSEAD Asian Business Sentiment Survey 2020Q2
    Thomson Reuters and graduate business school INSEAD ask Asia-Pacific
companies to rate their six-month business outlook, in a survey which in Q1
yielded a sentiment index of 53 at near 11-year-lows. The latest survey will be
released at 0300 GMT on Wednesday.​
    
    
    LOCAL MARKETS OUTLOOK
    (As reported by NewsRise)
    • SGX Nifty nearest-month futures were 1.8% higher at 9,992.00. 
    • The Indian rupee is likely to edge higher against the dollar as shares
rebounded after the U.S. Federal Reserve said it will begin buying corporate
bonds as part of a previously announced program to ensure flow of credit to
large corporates.
    • Indian government bond yields are likely to open largely unchanged ahead
of fresh supply of state debt, while market awaits steps from the central bank
to absorb excess supply. The yield on the benchmark 5.79% bond maturing in 2030
is likely to trade in a range of 5.78%-5.82% today.
   
    
    GLOBAL MARKETS
    • Wall Street closed higher on Monday following an announcement by the U.S.
Federal Reserve regarding its corporate bond purchasing program that boosted
investor confidence, which had been wavering amid a spike in new COVID-19
cases.
    • Asian shares and Wall Street futures rallied on Tuesday as the formal
start of the Federal Reserve's corporate bond buying programme boosted global
investor sentiment and calmed earlier worries about a second wave of coronavirus
infections.
    • The dollar nursed losses on Tuesday, after the U.S. Federal Reserve
announced it would begin broad buying of corporate debt, boosting investor
sentiment and appetite for riskier currencies.
    • U.S. Treasury yields rose on Monday as stocks recovered from earlier
losses and after the Federal Reserve said it would expand its purchases of
corporate bonds, boosting risk appetite.
    • Oil prices dippedon jitters that a rise in coronavirus infections around
the world could hurt fuel demand, but hopes that production cuts could be
extended kept declines in check.
    • Gold steadied supported by a weaker U.S. dollar, which fell after the
Federal Reserve announced it would buy individual corporate bonds in the
secondary market, although an uptick in risk appetite limited bullion's advance.

    
    
                   CLOSE        FII INVESTMENTS  EQUITIES     DEBT
 PNDF spot         75.98/76.01  June 15          494.90       59.01 crores
                                                 crores       
 10-yr bond yield  5.79 pct     Month-to-date    23,335       (1,989) crores
                                                 crores       
                                Year-to-date     (17,010)     (1,07,403) crores
                                                 crores       
 
    (FII investment numbers are in Indian rupees. Source: National Securities
Depository Limited)

    
    For additional data:
    India govt bond market volumes                 
    Stock market reports                
    Non-deliverable forwards data              
    Corporate debt stories               [IN CORPD]
    Local market closing/intraday levels [IN SNAPSHOT]
    Monthly inflows                      [INFLOWS RTRS TABLE IN]
    
    ($1= 75.91 Indian rupees)

 (Compiled by Nachiket Tekawade in Bengaluru)
  
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