Markets are closed today on account of Ambedkar Jayanti.

Inflation numbers released yesterday showed an easing of retail inflation, but economists have warned about rising food prices spoiling the party pretty soon.

Meanwhile, industry leaders are hoping for the easing down of lockdown measures today to mitigate the massive economic pain caused over the last 3 weeks.

Join us as we follow the top business news through the day.

High frequency data show impact of lockdown in March

India plans to fill strategic oil storage by the third week of May

India plans to completely fill its strategic petroleum reserve (SPR) by the third week of May by moving about 19 million barrels into the sites by then, the managing director of the country's SPR said on Tuesday.

India is moving the oil to the SPR to help the country's refineries reduce their excess crude as the lockdown to contain the outbreak of COVID-19 has dented transportation and industrial fuel consumption in Asia's third-largest economy.

India's fuel demand in March declined by 17.8%, the lowest in over two decades.

India will be diverting cargoes for loading in April already bought by refiners Indian Oil Corp, Bharat Petroleum, Hindustan Petroleum and Mangalore Refinery and Petrochemicals Ltd. The refiners cut their crude processing after local fuel demand collapsed and are unable to store the excess oil themselves.

Hope govt will announce economic stimulus packages soon, says Nasscom

All eyes right now are on the government as people await the announcement of the second economic rescue package, which has been in the works for a couple of weeks already.

PTI reports: "IT industry body Nasscom on Tuesday said it is hopeful that the government will announce economic stimulus packages soon to help rebuild the economy even as the nationwide lockdown was extended till May 3 to contain the spread of coronavirus infection.

Welcoming the move to extend the lockdown, Nasscom said it is imperative that people to adapt to this “new normal” and build in practices like social distancing in everyday lives over the next many months.

“The nationwide three-week lockdown (that was to end on April 14) has played a key role in helping India contain the spread of Covid-19.

“While, there are some districts that are still heavily impacted, it is heartening to hear about patients recovering and some districts reporting no new cases over the last 2-3 days,” Nasscom said in a statement.

There is still a long battle ahead and the extension announcement by the government till May 3 will help India to build on the containment strategy of the last three weeks and also strengthen readiness to support the post-lockdown phase, it added."

Apple shipped 2.5 million iPhones in China in March following virus slump

Some signs of normalcy returning to the Chinese economy as authorities begin to end the lockdown.

Reuters reports: "Apple Inc shipped roughly 2.5 million iPhones in China in March, a slight rebound after one of its worst months in the country ever, according to government data published on Friday.

Smartphone companies are hoping for a strong recovery in demand in China, where the deadly coronavirus is subsiding, just as it spreads overseas and looks set to trigger a global recession.

Mobile phone shipments in China in March totalled 21 million units, according to data from the China Academy of Information and Communications Technology (CAICT), a government think tank.

That was a more than three-fold increase from February, yet still down roughly 20% compared with March 2019.

Chinese retailers largely resumed operations by early March, with brick-and-mortar outlets re-opening and e-commerce logistics getting back in gear after the virus and tough containment measures brought much of the economy to a standstill in the first two months."

Oil slips as producer cuts fail to banish demand fears

The agreement among major oil producers to cut production has not helped oil prices very much amid dropping demand for the commodity.

Reuters reports: "Oil prices edged lower on Tuesday, with investors apparently unconvinced that record supply cuts could soon balance markets pummeled by the coronavirus pandemic, though a predicted plunge in U.S. shale output provided some support.

Brent futures fell 25 cents, or 0.8%, to $31.49 a barrel by 0825 GMT after settling 0.8% higher on Monday. U.S. West Texas Intermediate (WTI) crude was down 22 cents, or 1%, at $22.19, having dropped 1.5% in the previous session.

The Organization of the Petroleum Exporting Countries (OPEC), along with Russia and other producing countries - a grouping known as OPEC+ - agreed over Easter to cut output by 9.7 million barrels per day (bpd) in May and June, equating to about 10% of global supply before the coronavirus outbreak.

Additional output cuts by the United States, the world's biggest producer, and other nations outside the OPEC+ group will take the estimated total reduction to about 19.5 million bpd. Yet oil prices remain down by more than 50% this year.

“OPEC+ cut volumes are too small to counter the peak impact coming from the demand side,” JBC Energy said in a note."

A March of doom for the auto industry

Total wholesale dispatches of vehicles slumped 45% to just over 10.5 lakh units in March 2020 as manufacturers halted production and sale in the last week amid the lockdown due to the outbreak of COVID-19.

The automobile industry had dispatched over 19.08 lakh units to dealers in March 2019, as per data released by the Society of Indian Automobile Manufacturers (SIAM). Production of vehicles across segments also fell by 33.6% to about 14.47 lakh units, compared with over 21.8 lakh units in March 2019.

“The month of March 2020 was one of the most challenging months for the auto sector as the 21-day lockdown [brought] the production and sales of vehicles to a standstill in the last week. As revenues took a severe hit, OEMs struggled to meet fixed cost and working capital requirements,” Rajan Wadhera, president, SIAM, said.

Zomato, Grofers deny merger talks as e-grocery enters top gear

Zomato and Grofers, who recently entered a partnership to tap into the demand for home delivery of groceries, have denied rumours of a merger.

IANS reports: "Gurugram-based food delivery platform Zomato and e-grocer Grofers on Tuesday refuted reports that they are in acquisition or merger talks after reports surfaced that Zomato may acquire Grofers for nearly $750 million.

Flush with funds, Zomato currently partnered Grofers for the delivery of essential items — along with other FMCG and grocery stores —— to meet the surge in demand amid social distancing and nationwide lockdown that has now been increased till May 3.

In a statement shared with IANS, Zomato said that the company has partnered with Grofers, along with other FMCG companies, local groceries stores and modern retail chains, to pilot its grocery delivery service.

“We are not aware of any other conversation with Grofers,” a Zomato spokesperson added.

A Grofers spokesperson added: “The news on the merger is a pure speculation and completely untrue. Grofers is the country’s biggest online grocery retailer and has been growing at 2x every six months”."

Extended lockdown to cause $234.4 billion economic loss, says Barclays

Here's an estimate of the likely economic cost of the lockdown that has now been extended till May 3.

PTI reports: "Extension of the nationwide lockdown till May 3 will inflict an economic loss of USD 234.4 billion, and result in stagnant GDP for calendar year 2020, a British brokerage said on Tuesday.

The economic growth will be zero for calendar year 2020 and when seen from a fiscal year perspective, will rise 0.8 per cent in 2021, brokerage Barclays said in a note.

Hours earlier, Prime Minister Narendra Modi extended the three-week lockdown ending Tuesday till May 3, citing the need to arrest the growth in coronavirus infections. He did hint at relaxations in unaffected areas starting from April 20, but added that this will be based on strict monitoring.

The brokerage had said earlier that the three-week lockdown would likely to have an economic cost of USD 120 billion which is now estimated to balloon up to USD 234.4 billion.

It was earlier expecting India to clock a 2.5 per cent growth in calendar 2020, which has now been projected to be zero, while the FY21 growth has been revised down to 0.8 per cent from the 3.5 per cent earlier."

More US jobs lost in the past four weeks than were created since the 2008-2009 financial crisis

RIL to hit NCD market with ₹10,000-crore issue on April 16

To cash in on cheap funds flooding the debt market through the targeted long-term repo operations route, Reliance Industries (RIL) will raise ₹9,000 crore through an NCD sale to refinance the existing high-cost rupee debt.

The most cash-rich company is also one of the most indebted corporates sitting on debt pile of over ₹1.54 lakh crore as of March 2020.

According to an exchange filing, RIL is launching a ₹9,000-crore non-convertible debenture (NCD) issue on April 16 and the proceeds from the debt sale will be used to repay existing rupee debt.

The issue has two components: a ₹4,500-crore fixed rate tranche and an equal tranche with floating rate and both the issues are offering a coupon of 7.20%-4.40% of repo with a spread of 2.80%.

SoftBank shares fall 3.5% after flagging first FY loss in 15 years

Softbank is facing its worst crisis in years as many of its tech bets have gone sour after being hit hard by the global lockdown.

Reuters reports: "SoftBank Group Corp shares fell 3.5% on Tuesday morning after estimating the Vision Fund will record a 1.8 trillion yen ($16.73 billion) loss in the year ended March due to the tumbling value of bets on unproven startups.

The disastrous performance by the fund on which CEO Masayoshi Son has staked his reputation will drag the entire group to its first annual loss in 15 years, SoftBank said.

The Vision Fund recorded a loss of around 800 billion yen in the nine months to December, indicating that losses widened in the final quarter of the financial year. SoftBank did not provide details on which tech bets have been marked down, a long-standing irritant for analysts and investors."

Private lenders may lose deposits to PSBs due to Yes Bank bailout, says Moody's

Here's Moody's on the likely unintended consequence of the Yes Bank bailout.

PTI reports: "The Yes Bank rescue has undermined confidence of depositors in private sector lenders and will lead to smaller entities losing deposits to state-run banks, a report said on Tuesday.

The research report from global ratings agency Moody’s Investors Service comes at a time when many private sector lenders have reported a contraction of deposits in the March quarter when the Yes Bank crisis happened. The RBI - which had to steer the over Rs 10,000 crore Yes Bank bailout - has repeatedly assuaged such concerns, saying money in all the banks is safe.

“The Yes Bank event undermines depositor confidence in private sector banks, whereas public trust in PSBs (public sector banks) will remain strong, underpinned by a perception of strong government protection for them,” the rating agency said.

“As a result, some private sector banks, particularly, small institutions could lose deposits to PSBs, which will weaken their funding profiles,” it added."

Auto dealers send SOS to PM

The Federation of Automobile Dealers Associations (FADA) has written to Prime Minister Narendra Modi seeking urgent measures, including complete waiver of interest on bank loans during lockdown, to help dealers stay afloat in the “extremely bleak” situation due to which lakhs of jobs are at stake.

“COVID-19 has come as a shock to all of us as the Indian auto industry was preparing for recovery in sales growth after 15 months of downturn. A new normal growth rate is going to be set, post the COVID-19 which is projected to be far lower than the normal. The current situation can lead to an existential situation for many of our members and their employees,” FADA president Ashish Kale said in the letter dated April 12.

The industry body, which represents around 15,000 auto dealers, sought complete waiver of interest on all categories of loans from banks and NBFCs for the lockdown period and an extension of 4% interest subvention/subsidy for working capital/loan requirements to companies for a period of nine months post the lockdown.

IMF to provide debt relief to help 25 countries deal with pandemic

To ease the burden of the economic crisis linked to the coronavirus pandemic, the International Monetary Fund has provided 25 countries some relief from their debt obligations.

Reuters reports: "The International Monetary Fund said on Monday it would provide immediate debt relief to 25 member countries under its Catastrophe Containment and Relief Trust (CCRT) to allow them to focus more financial resources on fighting the coronavirus pandemic.

IMF Managing Director Kristalina Georgieva said the fund's executive board approved on Monday the first batch of countries to receive grants to cover their debt service obligations to the fund for an initial six months.

She said the CCRT had about $500 million in resources on hand, including new pledges of $185 million from Britain, $100 million from Japan, and undisclosed amounts from China, the Netherlands and others. The fund is pushing to raise the amount available to $1.4 billion.

About $215 million of the total would be used for grants to the first 25 countries over the next six months, with extensions possible up to two years, an IMF spokeswoman said.

“This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts,” Georgieva said in a statement."

China's March crude oil imports rose 4.5% y/y on stockpiling

Chinese oil refiners are making use of cheap global crude oil prices to increase their reserve levels, so much so that the country's oil imports have grown year-over-year despite falling demand.

Reuters reports: "China's crude oil imports in March rose 4.5% from a year earlier, according to official customs data, as refiners stocked up on cheaper cargoes despite falling domestic fuel demand and cuts in refining rates caused by the COVID-19 disease outbreak.

China, the world's top crude oil importer, took in 41.1 million tonnes of oil, according to the official data from the General Administration of Customs. That is equal to 9.68 million barrels per day (bpd).

The official March figure in bpd compared to an average of 10.47 million bpd for the first two months of the year. Imports in the first quarter rose 5% from a year earlier to 127.19 million tonnes, customs said, equal to 10.2 million bpd."

Gold climbs to over 7-year high on coronavirus-led economic worries

After cooling off a bit last month, gold has begun to rally due to increasing economic uncertainty linked to the coronavirus pandemic.

Reuters reports: "Gold prices rose to a more than seven-year high on Tuesday as mounting fears of a steeper global economic downturn due to the novel coronavirus increased bullion's safe-haven appeal.

Spot gold gained 0.1% to $1,715.25 per ounce by 0037 GMT, having touched its highest since Dec. 2012 at $1,722.20 earlier in the session.

U.S. gold futures rose 0.5% to $1,770.20 an ounce."

‘About $250 billion lost so far, post economic shutdown’

Most businesses in non-essential products and services will have to resort to scaling down of operations in the range of 25-75% in the wake of the COVID-19 pandemic and the resultant lockdown.

Automobile, high-end consumer goods, consumer durables, fancy FMCG items, expensive clothing, gems and jewellery, leisure holidays, restaurants and star hospitality will be some of the sectors that will witness deep down compression, while essential services such as food companies, pharmaceuticals and healthcare providers will continue to do business as usual, industry experts and trade body representatives said.

The compression will lead to the loss of millions of jobs across segments in the country by the end of May, although data as of now is ‘the most fragile factor’. Businesses will embark on stringent austerity measures as reducing people and minimising the use of real estate will be critical in this regard.

Pradeep Bhargava, president, Mahratta Chamber of Commerce, Industries and Agriculture (MCCIA) said the COVID-19-driven uncertainty had resulted in erosion of income at all levels.

Economists expect retail inflation to spike in April due to lockdown

Even as retail inflation eased in March, economists have warned that the impact of the lockdown on food prices could cause April's retail inflation to spike.

Core inflation, however, may drop due to the severe hit to consumer demand overall.

PTI reports: "Economists on Monday termed the ease in March CPI inflation to a four-month low of 5.1 per cent as a misplaced sense of improvement because the impact of lockdown on food prices will be felt in April.

Retail inflation as measured by consumer price index (CPI) slowed to a four-month low of 5.91 per cent in March as against 6.58 per cent in February 2020 and 2.86 per cent in March 2019.

The number does give a sense of improvement in inflation, which is misplaced given that the real impact of the lockdown will be felt sharply in April as prices of food items have increased quite sharply, Care Ratings chief economist Madan Sabnavis.

With the lockdown across the country and limited movement of goods due to absence of labour, trucks and activity in wholesale markets, there have been sharp declines in supplies of foodgrains, horticulture, sugar which have been reflected in higher prices in the market.

This can push food inflation towards the 10 per cent mark. We can expect CPI inflation in April to be above 6 per cent, Sabnavis said."