What changed for D-Street while you were sleeping

NEW DELHI: US Federal Reserve’s decision to buy unlimited assets did not go down well with US markets in overnight trade, but stock markets across Asia are rallying on hopes that the move may cushion demand in the world’s largest economy.

Here’s breaking down the pre-market actions.

TRADE SETUP

Singapore trading sets stage for gap-up start
Nifty futures on the Singapore Exchange traded 349.25 points or 4.67 per cent higher at 7,828.75, indicating a gap-up start for Dalal Street.

Tech view: Nifty resistance at 7,850
The index has breached the swing low of 7,832 and is approaching the 61.8 per cent retracement of the rally from the 2011 low, which is near 7,550 level, said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan. “Any bounce towards the 7,850 and 8,000 levels can be taken as fresh shorting opportunity,” Ratnaparkhi said.

Asia, US futures up in early trade
E-Mini futures for the S&P 500 jumped 1.9 per cent and Japan's Nikkei gained 4.9 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan added 1.2 per cent, though that followed a drop of almost 6 per cent on Monday. South Korea and Australia also recouped a little of their recent losses.

Oil prices jump 4%
Oil prices rallied at the open in Asia Tuesday on Federal Reserve measures to boost the coronavirus-hit US economy, offsetting concerns about a failure to approve a rescue package. US benchmark West Texas Intermediate was up 4.3 per cent at $24 a barrel while Brent crude, the international benchmark, rose 3.8 per cent to $28 a barrel.

US stocks settle lower
Wall Street's slide deepened as unprecedented moves by the US Federal Reserve to shore up credit across the economy proved insufficient to sooth investors' fears about the swiftly-spreading coronavirus. The Dow Jones Industrial Average index tumbled 3.04 per cent to end at 18,591.93 points, while the S&P500 index lost 2.93 per cent to 2,237.4. The Nasdaq Composite dropped 0.27 per cent to 6,860.67.

FPIs sell Rs 2,989 crore worth of stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 2,989.29 crore on Monday, data available with NSE suggested. DIIs were net buyers to the tune of Rs 1,082.24 crore, data suggests.

MONEY MARKETS

Rupee: The rupee on Monday crashed by 100 paise to settle at its lifetime low of 76.20 against the US currency due to heavy dollar demand and meltdown in equities as lockdowns to contain coronavirus spread fanned recession fears.

10-year bonds: India 10-year bond yield fell 1.93 per cent to 6.38 after trading in 6.24-6.39 range.

Call rates: The overnight call money rate weighted average stood at 4.96 per cent, according to RBI data. It moved in a range of 3.40-5.20 per cent. (Not updated)

HAPPENING TODAY

• BoE FPC Statement
• UK PM Statement on Coronavirus
• Japan Leading Economic Index Jan
• EU March Markit Manufacturing Flash PMI

MACROS

US Fed announces buying of unlimited assets
In its latest drastic step, the Fed offered to buy unlimited amounts of assets to steady markets and expanded its mandate to corporate and muni bonds. The numbers were certainly large, with analysts estimating the package could make $4 trillion or more in loans to non-financial firms.

FM sets Rs 15 lakh income cap to tax NRIs
Finance minister Nirmala Sitharaman softened the contentious budget proposal to tax non-resident Indians, putting in place a threshold of Rs 15 lakh for the levy of tax on incomes emanating from India, while leaving out global incomes from the tax ambit. Through amendments to the finance bill, she provided a carveout for REITs and InvITs in respect of changes in the taxation of dividends announced in the budget. Non-resident ecommerce firms will face a 2 per cent equalisation levy or the socalled Google Tax.

30 states, UTs in complete lockdown
A total of 30 states and Union Territories have imposed complete lockdown, covering a total of 548 districts in the country, to check the spread of coronavirus, the government said on Monday. Six other states have put in place similar restrictions in some areas in the wake of the outbreak. There are 28 states, eight UTs and in the country. The central government has also asked states to enforce additional restrictions, if necessary, leading to imposition of curfew in Punjab and Maharashtra.

RBI intensifies liquidity booster
The Reserve Bank of India (RBI) intensified liquidity enhancement measures to unclog the credit markets that are beginning to see a squeeze with short-term rates climbing as investors hoard cash amid uncertainty about the impact and duration of the coronavirus outbreak. The measures are being hurried through after rates in the inter-bank call money market hardened amid some banks declining to trade with weaker ones and yields on commercial paper and corporate bonds climbed. The overnight call rate surged as high as 5.50% Monday, up from 4.96% on March 2. The benchmark repo rate is at 5.15%. The central bank will inject as much as Rs 1 lakh crore in variable repo trades.

LS passes Finance Bill without discussion
The Lok Sabha passed the Finance Bill, Monday, by voice vote without discussion, amid ruckus in the House with opposition parties seeking a fiscal stimulus package in the wake of the Coronavirus outbreak. In the Union Budget 2020-2021, the government proposed to spend Rs 30,42,230 crore in the next financial year, 12.7% higher than the revised estimate of 2019-20. By passing the Bill, these financial proposals have been given effect.

Key eco surveys put on hold
The government has put on hold various economic surveys including those to measure unemployment and domestic tourism besides a multiple indicator survey, till March 31 in the wake of the Covid-19 pandemic. The ministry of statistics and programme implementation (Mo-SPI) has been carrying out the Seventh Economic Census since July 29 last year, but the pace of its data collection has slowed. Periodic Labour Force Survey (PLFS), Multiple Indicator Survey and one on domestic tourism are the other surveys that have been put in abeyance as all these surveys require mandatory door-to-door visits that put both the enumerators and respondents at risk.

Govt grounds domestic flights
Domestic airline Operations will be suspended in India after Tuesday midnight, a move that will bring the country to a standstill. “The operations of domestic schedule commercial airlines shall cease operations with effective from the mid night that is 23.59 hours IST on 24/3/2020,” said a statement from the government. The release added that airlines have to plan operations so as to land at their destination before 2359 hours on 24/3/2020. “The restrictions shall not apply to solely cargo carrying flights,” added the statement.

Maintain production of essentials: PM
Prime Minister Narendra Modi on Monday asked Indian companies to maintain production lines of essential commodities and ensure there is no hoarding as well as black marketing in the wake of the country fighting the coronavirus outbreak. He asked India Inc to allow employees to work from home and not to cut down on workforce in spite of the pandemic's negative impact on their businesses.

Auto industry stares at $2b loss
The automotive industry is expecting a loss of 7.5 lakh units in production and $2 billion in revenue in March alone because of the lockdowns to combat the Covid-19 outbreak. Despite the tough business environment, several automakers ET spoke to said they would not lay off any permanent or temporary workers. The government has also told India Inc to not cut jobs or salaries. Production has come to almost a standstill, as state governments have imposed lockdowns and companies themselves shut their factories to help break the chain of the coronavirus outbreak.

G-20 agrees to joint action plan
The G20 Finance Ministers and Central Bank Governors met virtually on Monday 23 to develop a joint G20 Action Plan in response to COVID-19, which will outline the individual and collective actions that G20 has taken and will be taking to respond to the COVID-19 pandemic. The G20 Finance Ministers and Governors discussed ways for stepping up coordinated efforts by bilateral and multilateral creditors to address the risks of debt vulnerabilities, especially in low-income countries, amid the COVID-19 pandemic, according to a G-20 Presidency statement.

Trump says he may scale back closures
US President Donald Trump said on Monday he will not allow the coronavirus to do long-lasting damage to the U.S. economy and that he would consider how to move forward after a 15-day shutdown ends next week. “America will again and soon be open for business,” Trump told a news conference at the White House. He added: “We are not going to let it turn into a long-lasting financial problem.”