The performance of the benchmark stock indices this morning suggests investors aren’t very impressed by the Centre’s economic stimulus package.US Federal Reserve Chairman Jerome Powell has warned that the economic recovery in the US after the coronavirus pandemic will turn out to be a long one.Join us as we follow the top business news through the day.11:50 AMDefence stocks in limelight; zoom upto 10%The changes to the Centre’s defence sector policy has enthused investors despite the sharp drop in the benchmark indices.PTI reports: “Shares of companies related to the defence sector zoomed upto 10 per cent in early trade on Monday after the government said it will relax foreign direct investment norms in defence manufacturing by allowing 74 per cent FDI under the automatic route.Bucking the overall weak broader market trend, shares of Hindustan Aeronautics jumped 10 per cent, Bharat Electronics rose 5.53 per cent, BEML advanced 5.31 per cent, Astra Microwave Products surged 4.93 per cent and Bharat Dynamics was trading up 4.71 per cent on the BSE.The government on Saturday said it will relax foreign direct investment norms in defence manufacturing by allowing 74 per cent FDI under the automatic route with a view to attracting overseas players in the sector.As per the current FDI policy, 100 per cent overseas investments are permitted in the defence industry — 49 per cent under the automatic route, while beyond that government approval is required.Finance Minister Nirmala Sitharaman said the FDI limit for the sector under automatic route will be raised from 49 per cent to 74 per cent.”11:20 AMShareholders to pay 25% for subscribing to RIL’s ₹53,125-cr right issue now, balance next yearReliance Industries shareholders will have to pay only 25% for subscribing to the company’s mega ₹53,125-crore rights issue, and the balance will have to be paid in two installments in May and November next year, the company said.Oil-to-telecom conglomerate’s rights issue will open for subscription of shareholders on May 20 and will close on June 3. One share will be offered for every 15 shares held at ₹1,257.Of the ₹1,257 per share price, only 25% is to be paid at the time of subscription. A similar amount will be due for payment in May 2021 and the balance 50% has to be paid in November 2021, the company said in a regulatory filing.
11:00 AMRupee slips 31 paise to 75.89 against US dollar in early tradeThe negative sentiment in domestic equities has weighed on the rupee this morning.PTI reports: “The rupee depreciated 31 paise to 75.89 against the US dollar in opening trade on Monday tracking weak opening of domestic equities and sustained foreign fund outflows.Forex traders said market participants are concerned about the effectiveness of the fiscal stimulus package and the impact of extended nationwide lockdown amid a significant rise in COVID-19 cases on the domestic economy.The local unit opened at 75.85, then lost further ground and fell to 75.89 against the US dollar, down 31 paise over its previous close.It had settled at 75.58 against the US dollar on Friday.The government on Sunday extended the coronavirus lockdown for two more weeks with the fourth phase providing more relaxations outside the containment zones.Though some restrictions were eased, “but the extension could further worsen the economic outlook for the current fiscal year, which could weigh on the currency further,” Reliance Securities said in a research note.Meanwhile, domestic bourses were trading on a negative note with the benchmark Sensex plunging 712.19 points at 30,385.54 and the broader Nifty down 204.85 points to 8,932.00.”
Global stocks start the week in Risk On mood led higher by US Futures as countries’ efforts to re-open their economies stirred hopes world was nearer to emerging. BUT Investors dismiss Fed warning and rising US-China tension. Bonds uchg. Gold hit 7y high at $1760, Bitcoin $9.9k. pic.twitter.com/bVAUIBqWwd— Holger Zschaepitz (@Schuldensuehner) May 18, 2020
10:45 AMAlibaba’s Jack Ma resigns from SoftBank boardSoftBank Group Corp said on Monday that Alibaba co-founder Jack Ma will resign from its board, in the latest departure by a high-profile ally of CEO Masayoshi Son.SoftBank said it will propose three new appointments to the board, including group CFO Yoshimoto Goto, at its annual general meeting on June 25.The departure of Ma, who retired as Alibaba’s executive chairman in September, comes as he pulls back from formal business roles to focus on philanthropy.
10:30 AME-commerce companies may resume full services from MondayThe wait may be over for e-commerce companies whose operations have been hit hard by the lockdown.PTI reports: “E-commerce companies are likely to resume full services across most parts of the country from Monday under the fourth phase of the lockdown that allows greater relaxations, although industry watchers say they are waiting for states’ decision on the matter.According to the latest Union Home Ministry’s order, “all other activities will be permitted, except those which are specifically prohibited” under the fourth phase of the lockdown that ends on May 31.However, in containment zones, only essential activities will be allowed. States and union territories – based on their assessment of the situation – may prohibit certain other activities in various zones or impose such restrictions as deemed necessary, the order added.Emails sent to Flipkart and Amazon India did not elicit a response.Srinivas Mothey, Senior Vice President of Paytm Mall, said the move will help the company deliver to most of the metro cities which were in the red zones.”10:00 AMSensex plunges over 800 points in early trade; bank stocks crackThe final tranches of the economic stimulus package announced over the weekend did not impress investors.PTI reports: “Equity benchmark Sensex plunged over 800 points in opening session on Monday dragged by losses in banking stocks as the government’s fiscal stimulus package failed to revive confidence in domestic investors.After hitting a low of 30,265.67, the 30-share index was trading 731.91 points or 2.35 per cent lower at 30,365.82.Similarly, NSE Nifty slumped 226.90 points, or 2.48 per cent, to 8,909.95.ICICI Bank was the top laggard in the Sensex pack, cracking around 6 per cent, followed by Axis Bank, SBI, Bajaj Finance, Titan, Maruti, IndusInd Bank, PowerGrid and ONGC.On the other hand, Infosys and TCS were trading with gains.In the previous session, the BSE barometer settled 25.16 points or 0.08 per cent lower at 31,097.73, and the broader Nifty slipped 5.90 points, or 0.06 per cent, to close at 9,136.85.Foreign portfolio investors offloaded equities worth Rs 2,388.04 crore in the capital market on Friday, provisional exchange data showed.Doubts over the effectiveness of the fiscal stimulus package, extension of the nationwide lockdown and spike in COVID-19 cases in the country weighed on investor sentiment, traders said.”
9:45 AMPaying off loans, investing in SIPs will equip one to deal with financial turbulence Credit card as a payment mechanism is not bad if the full bill is settled. However, if the bill is only paid in part, with the rest to be settled over a period of time, the demon will celebrate as it will make one’s life miserable.All kinds of loans cause obstacles in wealth creation. This does not mean we should not borrow. Instead of staying in a rented house and paying rent, it is better to go for a home loan and pay monthly instalments in the form of EMIs. Similarly, if someone is ill in our family and there isn’t sufficient health cover, we have to borrow.Borrowing for funding daughter or son’s education is also justifiable, but having borrowed, pay off the loan at the earliest.
9:30 AMUS economy will recover, could stretch through end of next yearThe US Federal Reserve Chairman thinks the road to recovery after the coronavirus pandemic will be a long one.PTI reports: “The US economy, the world’s largest, which has been thrown into a recession due to the coronavirus pandemic, will rebound but the recovery could stretch through the end of next year, Federal Reserve Chairman Jerome Powell has said.His statement came days after a top economic advisor to President Donald Trump favoured giving tax incentives to American companies to move their manufacturing units from China to the US, amidst a new rift in the bilateral relationship over Beijing’s handling of the coronavirus crisis.The US has expressed disappointment over China’s handling of the COVID-19 which has claimed nearly 90,000 lives in America.China, which is the world’s second largest economy, in the beginning of the year signed the Phase-1 of a trade deal with the US, ending a bitter two-year tariff war that had rattled the global economy.Federal Reserve Chairman Powell, during a 60 Minutes programme on CBS News on Sunday, said that in the long run and even in the medium run, one would not want to bet against the American economy.”