Investors weren't enthused this morning by the government's stimulus package with the benchmark indices down more than 2% at open.
Join us as we follow the top business news through the day.
Rupee falls 13 paise to 75.59 against U.S. dollar in early trade
The rupee depreciated 13 paise to 75.59 against the U.S. dollar in opening trade on Thursday amid strengthening American currency overseas and negative opening of domestic equities.
Forex traders said the local unit opened weak against the greenback tracking losses in some of the major Asian currencies and gains in the dollar.
Moreover, market participants are concerned about the fiscal deficit concerns of the ₹20-lakh-crore economic stimulus package as there is still no clarity on how the package would be financed.
The local unit opened at 75.57, then lost further ground and fell to 75.59 against the dollar, down 13 paise over its previous close.
Saudi Arabia cuts oil output to 18-year low
Lack of medical investment, healthcare infra big challenges for India’s COVID-19 fight: Fitch
Here's a quick summary of the challenges that India with its poor medical infrastructure faces in its fight against the coronavirus.
PTI reports: "Despite additional funding, the continued lack of medical investment and healthcare infrastructure will present challenges to mounting an effective response in India against COVID-19 pandemic, Fitch Solutions has said.
“The continued lack of medical funding and healthcare infrastructure inform our view for the potential epidemic to be worse in India if it is not adequately contained,” Fitch Solutions Country Risk and Industry Research (a unit of Fitch Group) said in its outlook for India’s pharmaceutical market.
With 8.5 hospital beds per 10,000 citizens and eight physicians per 10,000, the country’s healthcare sector is not equipped for such a crisis.
Moreover, the significant inefficiency, dysfunctioning and acute shortage of the healthcare delivery systems in the public sector do not match up with the growing needs of the population.
In addition, more than 80 per cent of the population still does not have any significant health insurance coverage, and approximately 68 per cent of the Indians have limited or no access to essential medicines.
Furthermore, over the last two decades, the availability of free medicines in public healthcare facilities has declined from 31.2 per cent to 8.9 per cent for inpatient care, and from 17.8 per cent to 5.9 per cent for outpatient care, the rating agency said citing a Public Health Foundation of India study."
Full guarantee may push banks to lend
Risk-averse banks may now have the appetite to resume lending operations, with the government deciding to provide full guarantee for the loans extended by them to borrowers to kick start the economy paralysed by the COVID-19 lockdown.
Finance Minister Nirmala Sitharaman announced a ₹3 lakh crore emergency working capital facility for businesses, including micro, small and medium enterprises, as part of the ₹20 lakh crore financial package announced by Prime Minister Narendra Modi on Tuesday.
This 100% credit guarantee will mean that banks do not have to make any provision for the loans, that is, they do not have to set aside capital in case the account turns non-performing.
Shares slide after initial stimulus fails to excite
Indian shares fell on Thursday after the government's stimulus package for small businesses battered by the coronavirus pandemic was poorly received by investors.
The NSE Nifty 50 index fell 1.45% to 9247.35 by 0400 GMT, while the S&P BSE Sensex was 1.51% lower at 31,522.01.
India's government said on Wednesday it would offer nearly $60 billion of loan guarantees for small businesses, shadow banks and power companies, as part of a 20-trillion-rupee ($266 billion) fiscal and monetary package.
Other Asian stock markets also fell as worries about a second wave of coronavirus infections and a dour warning from the head of the U.S. Federal Reserve dashed hopes for a quick recovery.
India Inc. welcomes FM’s booster dose for industry
Industry captains have welcomed Finance Minister Nirmala Sitharaman’s announcements for the revival of various sectors, on Wednesday.
FICCI president Sangita Reddy said that the greatest takeaway from today’s announcement was the clear focus on getting liquidity flowing into the system. “Besides liquidity, we need to give equal focus on generating consumption demand and propping up investments. We hope that in the next set of announcements, these areas will be taken up in a comprehensive manner as well,” Dr. Reddy said.
TVS Group chairman Venu Srinivasan said the collateral free automatic loan of ₹3 lakh crore for businesses will definitely help the MSME sector, which is facing serious cash crunch. The Centre is listening to grievances of industry and addressing them one by one, he said.