Investor sentiment has been dominated by fears of a second wave of the coronavirus pandemic that could prolong lockdown measures.
Join us as we follow the top business news through the day.
Rupee falls 22 paise to 75.95 against US dollar in early trade
The weakness in domestic equities has weighed on the rupee, which has depreciated against the US dollar.
PTI reports: “The rupee depreciated 22 paise to 75.95 against the US dollar in opening trade on Tuesday amid strengthening American currency overseas and weak opening in domestic equities.
Forex traders said the local unit opened weak against the greenback tracking gains in the US gollar. Moreover, selloff in domestic equities and rising coronavirus cases in the country weighed on investor sentiment.
The local unit opened at 75.89, then lost further ground and fell to 75.95 against the US dollar, down 22 paise over its previous close.
It had settled at 75.73 against the US dollar on Monday.
“Most Asian currencies depreciated against the US Dollar this Tuesday morning as investors remained cautious about re-opening the economy too quickly, which could result in a second wave of the COVID-19 infections,” Reliance Securities said in a research note.
On the domestic front, market participants will be keeping an eye on inflation and Index of Industrial Production number that will be released later in the day.”
Nobel laureate Duflo says cash transfer to poor makes sense economically as well
One more economist has weighed in favor of a larger cash stimulus for the poor to help revive the economy.
PTI reports: “Pitching for cash transfers to the poor for helping them deal with the impact of the COVID-19 crisis, Nobel laureate Esther Duflo on Monday said doing so is not just a moral necessity, but an economic one as well, as it can create demand which will benefit all.
Duflo, a professor of economics at MIT, who was recognised for her work along with husband Abhijit Banerjee, also asked businesses to lobby for such efforts by the government in their own interest.
It can be noted that a lot of analysts have been flagging concerns about the impact of the crisis on individual finances since the lockdowns began.
The government has so far announced income support and upping works under the employment guarantee scheme as part of a Rs 1.7 lakh crore aid package but not taken a universal basic income type cash transfer package.
It is the responsibility of the government to ensure the cash transfer and this is something businesses should be keenly interested in, not just because it is the right thing to do morally, but it is the most responsible thing to do economically, Duflo said.”
Non-essentials demand to rise, says Walmart
Walmart India on Monday reported a ‘steadying of consumption’ across several essential categories in the last few weeks.
The e-tailer, which operates 28 Best Price stores across nine States, now expects some pent-up demand for non-essentials.The company works on a membership-based wholesale platform, where kiranas, offices, institutions, hotels, restaurants and caterers as well as the army and paramilitary source items such as groceries, personal care and other essentials.
As per Anuj Singh, chief merchandising officer, Best Price, Walmart India, a couple of weeks into the lockdown, supply pipelines had depleted across consumption categories while the demand from kiranas for items such as tea and biscuits continued to be strong.
Indian shares slip amid fears of new coronavirus wave; banks slide
The benchmark indices continued to show weakness this morning after a weak performance in yesterday’s session.
Reuters reports: “Indian shares fell on Tuesday, tracking Asian markets that dropped on worries about a second wave of coronavirus cases, following news of fresh infections in the Chinese city where the COVID-19 pandemic originated.
The NSE Nifty 50 index was down 1.15% to 9,133.70 by 0355 GMT, and on course to fall for the second straight day, while the S&P BSE Sensex fell 1.27% to 31,161.65.
The central Chinese city of Wuhan reported five new cases on Monday, casting doubts over efforts to lower coronavirus-related curbs as businesses restart and individuals went back to work.
The Nifty banking index fell the most among the 12 sectoral indexes, with a 2.2% drop.
India’s retail inflation data for April was due later on Tuesday. A Reuters poll predicted inflation likely eased to a five-month low last month as India’s lockdown and subsequent sluggish demand drove price pressures down.
As of Tuesday, COVID-19 cases in India had surged well past 70,000 and deaths neared 2,300.”