The benchmark indices opened strongly this morning after the Prime Minister’s announcement yesterday of a Rs 20 lakh crore stimulus package.
Join us as we follow the top business news through the day.
COVID-19: Hetero to make Gilead’s Remdesivir in Hyderabad
Generic pharmaceutical firm and leading producer of anti-retroviral drugs Hetero has entered into a licensing agreement with Gilead Sciences Inc. for the manufacture and distribution of Remdesivir in 127 countries, including India.
An investigational drug, Gilead’s Remdesivir had received emergency use authorisation (EUA) from the U.S. Food and Drug Administration (USFDA) for treatment of hospitalised patients with severe COVID-19.
Announcing the deal, Hetero said Remdesivir will be manufactured at its formulation facility in Hyderabad. The facility has been approved by regulators such as the USFDA and EU, among others.
Stan Druckenmiller calls V-shaped recovery “a fantasy”
COVID-19 hits hotel industry; revenue per room drops 13-29% in Jan-Mar in top cities
Here are some stats from a report that sheds light on the impact of the coronavirus crisis on the hotel industry.
PTI reports: “The outbreak of COVID-19 has adversely impacted the occupancy levels at hotels across 11 major cities, resulting in a decline of up to 29 per cent in revenue per available room (RevPAR) during January-March this year, according to JLL India.
While occupancy level fell in a range of 5-17 percentage points, the RevPAR was down 13-29 per cent across 11 cities — Ahmedabad, Bengaluru, Chennai, Delhi, Goa, Gurugram, Hyderabad, Jaipur, Mumbai, Pune and Kolkata.
“The impact of COVID-19 has severely impacted the domestic hotel and hospitality sector in Q1 2020,” property consultant JLL India said in a report.
According to the data, both the occupancy level and RevPAR went down in all the 11 cities individually.
The occupancy level fell most in Delhi at 16.9 percentage points during January-March 2020 as compared with the year-ago period, followed by Jaipur at 16.4 percentage points.
There was a decline of 15.2 percentage points each in the occupancy level in hotels across Mumbai, Bengaluru and Gurugram.”
Rupee rises 21 paise to 75.30 against US dollar in early trade
The strength in domestic equities has helped prop up the rupee against the US dollar.
PTI reports: “The rupee appreciated 21 paise to 75.30 against the US dollar in early trade on Wednesday as Prime Minister Narendra Modi’s Rs 20 lakh crore economic stimulus package enthused investors.
Forex traders said PM’s economic booster aided sentiments. Besides, a positive opening in domestic equities also supported the local unit.
At the interbank foreign exchange, the rupee opened at 75.31, then gained ground to touch 75.30, registering a rise of 21 paise over its previous close.
On Tuesday, the rupee had settled at 75.51 against the US dollar.
In a big push to revive the COVID-hit economy, Prime Minister Narendra Modi on Tuesday announced massive new financial incentives on top of the previously announced packages for a combined stimulus of Rs 20 lakh crore.
Domestic bourses were trading on a positive note on Wednesday with the benchmark Sensex up 691.49 points at 32,062.61 and broader Nifty rising 195.80 points to 9,392.35.
Foreign institutional investors were net sellers in the capital market, as they offloaded equity shares worth Rs 1,662.03 crore on Tuesday, according to provisional exchange data.”
Package to unleash economic growth, drive post pandemic recovery, says India Inc
India Inc seems to be excited about the economic stimulus package that is expected to be announced this week, which it believes will kickstart growth.
PTI reports: “India Inc on Tuesday said Prime Minister Narendra Modi’s announcement of a Rs 20 lakh crore stimulus package was the “need of the hour” as it will pave the way for post pandemic recovery and unleash the next wave of economic growth.
In his speech, Modi announced that the total stimulus India is marshalling together to limit the impact of the COVID-19 crisis on the economy will be a little less than 10 per cent of the GDP and Finance Minister Nirmala Sitharaman will be announcing the exact details soon.
Industry bodies said the Make In India flagship will emerge as a key catalyst for attracting new investment, driven by much needed bold reforms in the areas of land, labour and liquidity.
“We appreciate that the Prime Minister spoke about the areas of land, labour, liquidity and simplification of laws which are the key challenges of the economy. Reforms in these four areas will truly unleash the next wave of economic growth within this crisis situation,” CII Director General Chandrajit Banerjee said.
Ficci President Sangita Reddy said the strengthening of the five pillars — economy, infrastructure, system, demography and demand will pave the way for India returning to a higher sustained growth path again.
“We expect that the contours of the package to be announced by Finance Minister Nirmala Sitharaman will address the needs of the poor and needy, MSMEs and also the industry and common man on the whole. The stress on land, labour and liquidity is what is required to make India self-reliant,” she added.”
Stocks record strong gains
Ashish Rukhaiyar reports from Mumbai:
Equity benchmarks registered strong gains in the morning session on Wednesday, a day after prime minister Narendra Modi announced a ₹20 lakh crore stimulus package for the country to counter the impact of the coronovirus pandemic.
At 10:25, the benchmark Sensex was trading at 32,044.73, up 673.61 points or 2.15%. Earlier in the day, it gained 1,474 points to touch a high of 32,845. Meanwhile, the broader Nifty was at up 190 points or 2.06% at 9,386.30.
Stocks like HDFC Bank, ICICI Bank, HDFC, L&T, Kotak Mahindra Bank, Axis Bank and Infosys contributed the maximum to the Sensex’s gains in the morning session. Incidentally, ICICI Bank, L&T and Ultratech Cement were up 5% each.
The overall breadth of the market was also strong with more than 1,300 gainers as against 446 stocks that declined.
Coronavirus lockdown | Industrial output shrank 16.7% in March 2020
India’s factory output plummeted to record lows in March, with the Index of Industrial Production contracting 16.7%, reflecting the drastic impact of the countrywide lockdown that began on March 25. This comes after a positive growth of 4.5% recorded in February.
Manufacturing sector output slumped 20% in March, while electricity generation shrank almost 7%, according to data released on Tuesday by the Ministry of Statistics and Programme Implementation. The mining sector remained flat, without any growth or contraction in output.
“I have been looking at IIP data from April 1982 onward, and this is the biggest ever contraction since then. It is no surprise, as all industrial activity was halted for one week, apart from State-level lockdowns which began earlier,” said D.K. Pant, chief economist of India Ratings and Research, part of the Fitch group.
Sensex zooms over 1,400 points on PM Modi’s Rs 20 lakh crore economic booster
The long wait for a fiscal stimulus is over, and investors seem to be enthused about it.
PTI reports: “Equity benchmark Sensex rallied over 1,400 points in opening session on Wednesday as Prime Minister Narendra Modi’s Rs 20 lakh crore stimulus package to revive the coronavirus-hit economy boosted domestic investor sentiment.
After touching a high of 32,845.48, the 30-share index pared some early gains to trade 818.68 points or 2.61 per cent higher at 32,189.80.
Similarly, NSE Nifty soared 213.50 points, or 2.32 per cent, to 9,410.05.
ICICI Bank was the top gainer in the Sensex pack, surging around 7 per cent, followed by L&T, Axis Bank, Bajaj Finance, Hero MotoCorp, M&M, UltraTech Cement and Maruti.
On the other hand, Nestle India, Bharti Airtel, Sun Pharma and Reliance Industries were trading in the red.
In the previous session, the BSE barometer settled 190.10 points or 0.60 per cent lower at 31,371.12, and broader Nifty declined 42.65 points, or 0.46 per cent, to 9,196.55.
Foreign portfolio investors offloaded equities worth Rs 1,662.03 crore in the capital market on Tuesday, provisional exchange data showed.
According to analysts, domestic investors cheered the government’s massive stimulus package to revive the pandemic-stricken economy.
The Prime Minister on Tuesday announced massive new financial incentives on top of the previously announced packages for a combined stimulus of Rs 20 lakh crore.
He said the package will be around 10 per cent of the GDP and “will play an important role in the ‘Atmanirbhar Bharat Abhiyan’ (self-reliant India campaign).”