QBiz: Investors Brace for More Pain; Fuel Consumption to Burn out
Representational image. 
Representational image. (Photo: Reuters)

QBiz: Investors Brace for More Pain; Fuel Consumption to Burn out

1. Investors Brace for More Pain as India Goes Under Lockdown to Curb COVID-19

Investors may have to brace for more pain as selling pressure could extend with India entering a virtual shutdown phase to contain the spread of COVID-19. Already, foreign portfolio investors’ selloff in March hit a record of $6.24 billion (Rs 46,200 crore). This is far in excess of $4.4 billion outflows seen in January 2008 due to the global financial crisis.

Analysts say the market bloodbath is worse than in 2008. Last week, investor sentiment was crushed with the Sensex dropping as much as 17 percent before recovering sharply on Friday to end the week with a 12 percent deficit. On a month-to-date basis, the markets are down 22 percent, while the India VIX has more than doubled, signalling extreme anxiety.

(Source: Business Standard)

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2. Petrol, Diesel Consumption Likely to Burn Out in Coronavirus Heat

India is likely to see a drop of 5-10 percent in the quantity of fuel sales owing to COVID-19 restrictions. The decline in purchases of petrol, diesel, and jet fuel is set to dampen the annual consumption figures of the current financial year and also 2020-21.

This will be a repeat of what happened in China, where demand for all commodities, including petroleum products and steel, had shrunk after the epidemic surfaced in Wuhan, leading to the accumulation of vast stocks.

A reprisal of this has been seen in India during the initial three weeks of the epidemic. Based on an estimate by the China National Petroleum Corporation (CNPC), the country’s requirement of gasoline, diesel, and jet fuel may fall 36 percent during the January-March period (Q1) over the same duration last year.

(Source: Business Standard)

Also Read : Lockdown in 15 UP districts till 25 March Amid Coronavirus Scare

3. Markets to Operate Normally on Monday: SEBI Amid Reports of Shutdown

The stock markets will operate normally on Monday, said regulatory and exchange officials on Sunday. The clarification came after reports surfaced that the market regulator Sebi and the finance ministry was considering shorter trading hours or even a complete shutdown in the wake of the coronavirus outbreak.

“Markets will work normally tomorrow (Monday),” said a Sebi official. “All segments at BSE will operate as usual on 23 Monday,” said Ashish Chauhan MD & CEO, BSE.

Market participants took to the social media over the issue of keeping markets close. Many investors urged the government and Sebi to keep markets closed following a harrowing week, where the benchmark indices plunged 12 percent. However, many cited the example of Philippines saying what it was a bad idea.

(Source: Business Standard)

4. COVID: Govt Tells Companies Not to Terminate Workers & to Protect Wages

The Central government has asked all companies to ensure that workers, especially contract labour, who take leave as a precaution towards the coronavirus pandemic (Covid-19) should be treated to be ‘on duty’ and their salaries should not be deducted.

“In the backdrop of such challenging situation, all the employers of public or private establishments are advised to extend their coordination by not terminating their employees, particularly casual or contractual workers from job or reduced their wages, Union labour and employment ministry joint secretary Kalpana Rajsinghot said in a letter dated 20 March sent to employers’ associations, adding, “If any worker takes leave, he should be deemed to be on duty without any consequential deduction in wages for this period.”

(Source: Business Standard)

Also Read : Coronavirus Impact: Maruti, Mahindra, Honda Suspend Operations 

5. Domestic Flights to and From Delhi Airport Will Continue to Operate: DGCA Official

The capital's IGI Airport will remain functional despite massive lockdown measures being implemented by the authorities across the country to contain the spread of COVID-19.

Domestic flights to and from Delhi airport will continue to operate, said a DGCA official and denied the reports of suspension of domestic operations.

Earlier it was reported that all domestic flights coming to Delhi will be suspended from tomorrow till 31 March as the number of positive coronavirus has risen to 27 in the national capital.

(Source: Livemint)

6. Ashok Leyland Scales Back Hinduja Leyland Finance Stake Purchase Plan

Ashok Leyland Ltd will acquire a smaller stake in a non-bank lending unit, after concerns raised by investors about the transaction sent the commercial vehicle maker’s shares plunging.

The company’s board of directors, at a meeting held on 21 March, said they would acquire 6.99 percent stake in Hinduja Leyland Finance Ltd, from 19 percent previously after considering feedback from minority shareholders. Ashok Leyland had initially proposed to infuse over Rs 1,200 crore in the unit by acquiring stake in tranches, leading to near-30 percent fall in its shares on 19 March as investors turned cautious amid the current market scenario.

The maker of trucks to tippers and tractors would now buy shares worth Rs 390.49 crore from Everfin Holdings, an associate of Everstone Capital, and the Hinduja Group at Rs 119 apiece, taking its stake in Hinduja Leyland Finance to 68.82 percent, according to company data.

(Source: BloombergQuint)

7. India to Spend $1.3 Billion to Boost Pharmaceutical Production

India will set up a nearly 100-billion-rupee ($1.3 billion) fund to encourage companies to manufacture pharmaceutical ingredients domestically after supply chain disruptions due to the coronavirus pandemic exposed the country’s dependence on China and raised the specter of drug shortages.

The program includes spending on infrastructure for drug manufacturing centers, and financial incentives of up to 20 percent of incremental sales value over the next eight years, according to a government statement.

India imports almost 70 percent of its active pharmaceutical ingredients – the chemicals that make a finished drug work – from China. A number of those chemicals are sourced from Hubei province, the epicentre of the coronavirus outbreak. As the world’s single largest exporter of generic drugs, India is responsible for about 20 percent of the world’s supply.

(Source: BloombergQuint)

8. India Issues Guidelines for Private Testing, Ropes in National Labs as Coronavirus Cases Increase

As the number of people getting infected by the novel coronavirus rises in India, the government has issued guidelines for testing by private labs in the country, set price caps for such tests, and roped in national laboratories.

All private laboratories that have National Accreditation Board for Testing and Calibration Laboratories accreditation for real-time polymerase chain reaction assay for RNA virus will only be allowed to conduct COVID-19 tests, according to the guidelines issued by the Indian Council of Medical Research on Saturday. The laboratory test can only be offered when prescribed by a qualified physician as per the ICMR guidelines for COVID-19 testing.

(Source: BloombergQuint)

9. Maruti Suzuki, M&M, Hero MotoCorp Suspend Production

India’s leading automobile manufacturers announced that they’d suspend production at their manufacturing facilities to ensure employee safety and help contain the spread of coronavirus.

The country's largest car-maker said it has decided to suspend production at its manufacturing facilities in Haryana with immediate effect due to the coronavirus outbreak.

"The company will shut production and office operations at its facilities in Gurugram and Manesar (Haryana) with immediate effect till further notice," Maruti Suzuki said in a statement.

(Source: BloombergQuint)

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