·
Indian markets continued to
close in red for the sixth consecutive week. BSE Sensex and Nifty 50 fell ~0.3%
and ~1%, respectively, however theØ losses were
trimmed by the stimulus measures announced by the Reserve bank of India in the
form of repo rate cut repo rate by 75 basis points (bps) to 4.4% and economic
stimulus measure announced by the Finance Minister Nirmala Sitharaman in the
form of 1.7 lakh crore relief package for the poor and migrant workers in the
country to fight the economic fallout from the coronavirus pandemic.
·
Going forward, the growth in
number of COVID-19 cases among other factors such as the movement of rupees,
crude oil prices, foreignØ currency inflows and outflows will continue to determine the
forward-looking market pattern.
·
We expect the trading range for
Nifty between 7800 -9000 in the near term.
·
Government bond prices ended
higher last week. The yield of the 10 year benchmark 6.45% 2029 paper settled
at 6.14% on March 27asØ against 6.26% on March 20.
·
RBI’s Monetary Policy Committee
decided to cut the repo rate by 75 basis
points (bps) to 4.4% ,reverse repo-rate by 90 bps to 4% and cashØ reserve
ratio (CRR) by 100 bps to 3%, gave gilts a boost in the last week.
·
The Central bank purchased
dated securities for a total notified Rs 30,000 crore supporting the bond
prices.
·
The Central bank also announced
the auction of 77 day and 84 day cash management bills for a total notified Rs
80,000 crore
Domestic
News
·
Finance Minister Nirmala
Sitharaman announced a Rs 1.7 lakh crore relief package- PM Gareeb Kalyan, for
the poor and migrant workers in theØ country to
combat the challenges posed by the coronavirus(Covid-19) pandemic amid 21 days
lockdown.
·
RBI allowed lending
institutions and banks a 3-month moratorium, and allowed them to defer interest
on all loans and working capitalØ
repayments.
·
RBI reduced the cash reserve
ratio (CRR) of all banks by 100 basis points to 3.0% of net demand and time
liabilities (NDTL) with effect from theØ
reporting fortnight beginning March 28, 2020,for a period of one year ending on
March 26, 2021.
·
RBI also decided to reduce the
requirement of minimum daily CRR balance maintenance from 90% to 80% effective
from the first day of theØ reporting fortnight beginning March 28, 2020,one-time dispensation
available up to June 26, 2020.
·
RBI allowed lending
institutions and banks a 3-month moratorium, and allowed them to defer interest
on all loans and working capital repayment
International
News
·
US equities surged in the last
week mainly boosted by a $2 trillion rescue package to support the US economy
that is affected by Covid-19Ø outbreak. Dow Jones, NASDAQ recorded a growth of ~17% and ~13% on
WoW basis.
·
US Fed announces the purchase
of an unlimited amount of Treasuries and securities tied to residential and
commercial real estate toØ prevent a credit crunch. It
also announced new lending programs worth $300 billion to support the financial
markets.Ø
·
Britain’s FTSE surged 12% as
Bank of England announced a quantitative easing of 645 billion pounds to combat
the economic impact ofØ
·
Coronavirus followed by the
series of stimulus measures taken up by the central banks and governments
across the world. UK consumer prices
advanced 1.7% in February, slower than the 1.8% gain in January; producer
prices were 0.4% on the year to February 2020,Ø down
from 1.0% in January 2020.
·
Other European equities, too,
advanced on optimism over the US stimulus package. France’s CAC 40 and
Germany’s Dax rose about 12% each.
·
Asian equities ended in
positive territory. Japan’s Nikkei index rallied 17% on tracking gains in US
equities.
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