Stocks have recorded modest gains after opening the day in the red.

India's service sector PMI dropped to a record low, far below analyst expectations.

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

Manufacturing PMIs drop across the world

Sensex rises 232 points; bank, auto stocks jump

After the modest gains made in the opening hours, it was largely a day of choppy trading in the benchmark indices.

PTI reports: "Equity benchmark Sensex ended 232 points higher after a see-saw session on Wednesday, led by gains in banking, finance and auto stocks despite rising concerns over the country’s economic outlook as COVID-19 cases spike.

After swinging over 800 points during the day, the 30-share index closed 232.24 points or 0.74 per cent higher at 31,685.75.

On similar lines, the NSE Nifty rose 65.30 points, or 0.71 per cent, to finish at 9,270.90.

M&M was the top gainer in the Sensex pack, rallying over 5 per cent, followed by Bajaj Finance, HDFC Bank, ICICI Bank, Bharti Airtel and Hero MotoCorp.

On the other hand, ITC cracked over 5 per cent. HUL, TCS, Titan and Infosys too ended in the red.

According to traders, economic uncertainty due to the COVID-19 pandemic, muted corporate earnings and weak macroeconomic data are keeping investors wary."

Oil rises above $31 as lockdown easings counter supply glut

There's an intense battle between bulls and bears going on in the oil market as the lockdown is eased.

Reuters reports: "Oil rose above $31 a barrel on Wednesday as hopes for a recovery in demand as some countries ease coronavirus lockdowns offset a report showing a higher-than-expected rise in U.S. inventories.

Brent crude has almost doubled since hitting a 21-year low reached on April 22, supported by expectations demand will recover and by a record supply cut led by the Organization of the Petroleum Exporting Countries.

Brent was up 79 cents, or 2.6%, at $31.76 a barrel at 0930 GMT, having risen in the past six sessions. West Texas Intermediate (WTI) crude added 88 cents, or 3.6%, to $25.44

“Clearly, the optimism of the re-opening of the global economy has supported the oil rally,” said Naeem Aslam, analyst at Avatrade.

But in a reminder that a supply glut persists, the American Petroleum Institute said on Tuesday that U.S. crude inventories rose by 8.4 million barrels last week, more than analysts expected.

“We're talking about normalisation of supply and demand but we've got a long way to go,” said Lachlan Shaw, National Australia Bank's head of commodity strategy.

Italy, Spain, Nigeria and India, as well as some U.S. states began allowing some people to go back to work and opened up construction sites, parks and libraries.

Germany's federal government and 16 states have agreed on ways to ease the lockdown.

The easing of lockdowns should lead to a recovery in global oil demand, which in April was expected to collapse by at least 20%, an unprecedented drop, as governments told people to stay at home."

Rupee settles 9 paise lower at 75.72 against US dollar

The rupee was weak today in line with the weakness seen in stocks as investors pulled money out of India.

PTI reports: "The rupee depreciated 9 paise to close at 75.72 against the US dollar on Wednesday, following a strong American currency overseas and fears of a renewed trade war between the US and China.

Forex traders said the weakness in the rupee was largely due to the strengthening of the US dollar and sustained foreign fund outflows.

Moreover, rising coronavirus cases in the country also weighed on the local unit.

Rupee opened weak at 75.77 at the interbank forex market and then pared some losses to finally settle at 75.72, down 9 paise over its last close.

It had settled at 75.63 against the US dollar on Tuesday.

Foreign institutional investors remained net sellers in the capital market, as they sold equity shares worth Rs 1,059.39 crore on Tuesday, according to provisional exchange data."

Govt makes Rs 35K crore DBT transfers to help vulnerable sections fight Covid 19

Here are details of the disbursements made under the Rs 1.7 lakh crore economic rescue package announced in late-March.

PTI reports: "Around 39 crore beneficiaries have been provided with cash support through direct benefit transfer (DBT) amounting to Rs 34,800 crore under the Pradhan Mantri Garib Kalyan Package (PMGKP) till May 5, the Finance Ministry said in a statement on Wednesday.

The Rs 1.7 lakh crore PMGKP package was announced by Finance Minister Nirmala Sitharaman on March 26 to protect the weaker and the most vulnerable sections of the society from the impact of the Covid—19 induced lockdown.

Under the package, the government announced free food grains and cash payments to women and poor senior citizens and farmers. Its swift implementation is being continuously monitored by the Central and state governments.

So far, 67.65 lakh tonnes of food grains have been lifted by 36 states/UTs for April and 30.16 lakh tonnes of free ration of food grains have been distributed by the states/UTs to 60.33 crore beneficiaries covered under the Pradhan Mantri Garib Kalyan Ann Yojana.

Besides, 6.19 lakh tonnes of food grains have been distributed, covering 12.39 crore beneficiaries, by 22 states/UTs for May 2020.

Moreover, 2.42 lakh tonnes of pulses have also been dispatched to various states/UTs.

The Finance Ministry statement said that as of May 5, 4.82 crore free Ujjwala cylinders have been delivered, while a total of 5.09 crore cylinders have been booked. Under the package, the government has decided to distribute free cooking gas cylinders to Ujjwala beneficiaries for three months till June 30."

Bond-buying risks could outweigh rewards for emerging central banks

As emerging market central banks try to ape their developed market counterparts, economists warn about the unintended consequences of such action.

Excerpts from a Reuters report: "Emerging market central banks are launching asset purchase programmes to help mitigate the economic impact of coronavirus, a fresh test of unconventional policy tools that were only adopted by developed economies a decade ago.

A dozen countries, from Chile to the Philippines, South Africa and Turkey, have launched or boosted quantitative easing (QE) schemes through which they will buy government bonds and sometimes other domestic securities.

Like the U.S. Federal Reserve and other major central banks which have used QE since the global financial crisis of 2008-09, they aim to prime their economies with newly created money to spur lending and investment as interest rates hit record lows.

But some former policymakers and analysts warn that repeating what is essentially a monetary policy experiment in emerging economies could have unintended consequences.

“I don't think it is either advisable or necessary for emerging markets to go into QE right now,” said Divvuri Subbarao, governor of the Reserve Bank of India from 2008-2013, who warns of dangers in suggestions the RBI could help the Indian government monetise its budget deficit by buying bonds.

Emerging economies lack the big domestic savings pools seen in developed countries and rely on foreign investors, attracted by relatively high interest rates, to cover big payment deficits and underpin their currencies.

Any measures that bring rates closer towards the zero levels long seen in major economies therefore risk deterring those vital overseas fund flows.

“In high-yielders which have already de facto lost a degree of market access, the risks of QE are larger,” said Saad Siddiqui at JPMorgan. “Here is a risk that, at an unknown tipping point, a combination of fears of policy indiscipline, inflation and capital outflows will dominate, with capital controls a possible end state.”

That tipping point may be determined by a combination of factors, including the size of any QE programme and policymakers' ability to convince markets of its temporary nature, Siddiqui said."

Gold futures surge on domestic demand, global cues

As investors switch to risk-off mode, safe haven demand for gold has helped improve the price of the metal.

PTI reports: "Gold prices on Wednesday rose by Rs 8 to Rs 45,759 per 10 gram in futures trade as speculators indulged in creating fresh positions on firm global cues.

On the Multi Commodity Exchange, gold contracts for June traded higher by Rs 8, or 0.02 per cent, at Rs 45,759 per 10 gram in a business turnover of 13,745 lots.

Similarly, the yellow metal for August delivery edged up by Rs 31, or 0.07 per cent, to Rs 45,955 per 10 gram in a business turnover of 6,632 lots.

Fresh positions built up by participants on firm global cues mainly led to rise in gold prices, analysts said.

Globally, gold prices rose 0.08 per cent to USD 1,711.90 per ounce in New York."

Govts imposing taxes in times of distress ‘cruel’, says Chidambaram

Governments must borrow to meet their deficits and not impose higher tax burdens when economic activity has ground to a halt amid the coronavirus pandemic, senior Congress leader P. Chidambaram said on Wednesday after the Centre and the Delhi government hiked taxes on petroleum products.

New or higher taxes are justified only when the economy is booming, the former finance minister said, dubbing the imposition of taxes as “cruel”.

Tax burdens on the middle class and the poor is actually taxing distress, he said in a series of tweets.

“Governments should give money to the people in times of distress, not squeeze and take money from the people,” Mr. Chidambaram said.

Most employers keen to retain existing workforce amid COVID-19 crisis

Could this be a sign that employers expect the economy to be back on its feet soon?

PTI says: "At a time when the Indian job market is going through increasing uncertainty surrounding the COVID-19 pandemic, most employers in the country are keen to retain their existing manpower, says a survey.

According to staffing company Genius Consultants ‘9th Hiring, Attrition and Compensation Trend 2020-21’, around 81 per cent of the respondents have shown interest to carry on with existing manpower and retaining them.

The survey, however, noted that almost 53 per cent of employers are not going for new recruitment, even as around 15 per cent respondents indicated that there will be replacement hiring.

Interestingly, 10 per cent respondents said there will be new job opportunities this financial year, the survey said adding that the northern region will provide more opportunities for job seekers.

But this year, the increment scenario seemed “unwelcoming” with 61 per cent with companies saying no to increment due to the current economic situation, whereas 27 per cent thought increment will be less than 5 per cent and around 11 per cent thought the increment will range between 5-10 per cent.

In terms of downsizing employee strength, the survey found that 21 per cent respondents said layoffs are on the cards and indicated that junior levels are more susceptible over middle and senior management people."

What would happen if President Donald Trump decided not to pay China back?

Rupee slips 18 paise to 75.81 against US dollar in early trade

Domestic economic uncertainty has weighed on the rupee, which depreciated against the dollar this morning.

The rupee depreciated 18 paise to 75.81 against the US dollar in opening trade on Wednesday amid strengthening American currency overseas and sustained foreign fund outflows.

Forex traders said the weakness in the rupee was largely due to the strengthening US dollar. Moreover, rising coronavirus cases in the country also weighed on the local unit.

India's services activity collapses as coronavirus palayses global economy

The contraction in service sector activity due to the lockdown has turned out to be far worse than what was expected.

Reuters reports: "India's services activity suffered a shock collapse in April as the coronavirus lockdown crippled global demand, causing a historic spike in layoffs and reinforcing fears of a deep recession in Asia's third-largest economy, a private survey showed.

The grim result for the industry, the engine of economic growth and jobs, underlined the pandemic's sweeping impact across India as authorities extended a nationwide lockdown, in effect since March 28, until May 17.

The Nikkei/IHS Markit Services Purchasing Managers' Index plunged to an eye-popping 5.4 in April from March's 49.3, an unprecedented contraction since the survey first began over 14 years ago.

It also shattered a Reuters poll forecast of 40 and was way off the 50-level separating growth from contraction, with the single digit outcome marking by far the most extreme result among major economies.

“The extreme slide in the headline index, which fell by over 40 points, shows us that the strict lockdown measures have led to the sector essentially grinding to a complete standstill,” Joe Hayes, an economist at IHS Markit, said in a release.

The steep downturn in activity underlined the widespread havoc wrought by the pandemic worldwide, with many fearing the worst global recession since the 1930s."

Govt to gain Rs 1.6 lakh crore this fiscal from record excise duty hike on petrol, diesel

It looks like the steep hike in taxes on petrol and diesel will do good to the government's finances, which have been hit hard by the lockdown.

PTI reports: "The cash-strapped government will gain close to Rs 1.6 lakh crore in additional revenues this fiscal from a record increase in excise duty on petrol and diesel, that will help make up for revenue it lost in a slowing economy and shutting down of businesses due to coronavirus lockdown.

Late on Tuesday evening, the government hiked excise duty on petrol by Rs 10 per litre and that on diesel by Rs 13 a litre to mop up gains arising from international oil prices falling to a two-decade low.

This is the second hike in excise duty in less than two months and will help government garner over Rs 1.7 lakh crore in additional revenues annually at 2019-20 level of consumption, industry officials said.

Considering the slump in consumption due to travel restrictions imposed by coronavirus lockdown, the gains in the remaining 11 months of the current fiscal year (April 2020 to March 2021) will be close to Rs 1.6 lakh crore, they said.

Together with Rs 39,000 crore in annual revenues gained from the March 14 excise duty hike of Rs 3 per litre each on petrol and diesel, the government stands to gain as much as Rs 2 lakh crore."

Oil prices fall as rising U.S. inventories reassert supply concerns

Oil prices fell on Wednesday, ending a multi-day streak of gains, as investors focused on oversupply risks after U.S. crude inventories rose more than expected amid a slump in demand caused by restrictions to halt the coronavirus spread.

U.S. West Texas Intermediate (WTI) crude futures fell as much as 2.1% to $24.05 a barrel and were down 14 cents at $24.41 a barrel at 0201 GMT. WTI has snapped a five-day winning streak.

Brent crude futures were flat at $30.97 a barrel.

Brent prices climbed 13.9% in the previous session, part of a six-day rise. Investors may be hesitant to increase their purchases of Brent as the contract has climbed too much over the past streak.

Sensex sheds over 200 points in early trade; Nifty below 9,200

The corporate earnings season isn't turning out to be great for the benchmark indices, which have seen some heavy selling this week.

PTI reports: "Equity benchmark Sensex dropped over 200 points in early trade on Wednesday tracking losses in index-heavyweights ITC, Axis Bank and Kotak Bank amid rising concerns over the country’s economic outlook as COVID-19 cases spike.

The 30-share index was trading 256.76 points or 0.82 per cent lower at 31,196.75, and the NSE Nifty fell 77.60 points, or 0.84 per cent, to 9,128.