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(Eds: Updates with expert comments) Mumbai, May 13 () The rupee appreciated by 5 paise to 75.46 against the US dollar on Wednesday as fiscal stimulus by the government bolstered investor sentiment.Forex traders said Prime Minister Narendra Modi's Rs 20 lakh crore economic stimulus package enthused investors.However, risk sentiments are negative and investor sentiments remain fragile over coronavirus concerns, they added.At the interbank foreign exchange, the rupee opened on a strong note at 75.31 but lost most of its gains in day trade. The local currency settled at 75.46 against the US dollar, registering a rise of 5 paise over its previous close. During the trading session rupee witnessed an intra-day high of 75.30 and a low of 75.50. In a big push to revive the coronavirus-hit economy, the Prime Minister on Tuesday announced massive new financial incentives on top of previously announced packages for a combined stimulus of Rs 20 lakh crore."The surprise move of fiscal stimulus by the government had a positive impact on the rupee. However, globally, risk sentiments are negative and we have no clarity over the government expenditure plan," Emkay Global Financial Services Head of Research- Currency Rahul Gupta said.Gupta further noted that "positive comments by Finance Minister Nirmala Sitharaman may cheer the rupee but it will be short-lived as the fragility over coronavirus still continues". "On first sight, the size of fiscal stimulus and reforms on 4Ls (land, labour, liquidity and law) looks large and better than estimates, but as they say devil will be in the details. Market players eagerly awaited details of the package from Finance Minister Nirmala Sitharaman," said Devarsh Vakil, Head Advisory, HDFC Securities. On the domestic equity market front, after rallying 1,474.36 points during the day, the 30-share index surrendered some early gains to settle 637.49 points or 2.03 per cent higher at 32,008.61. Similarly, the NSE Nifty jumped 187 points, or 2.03 per cent, to finish at 9,383.55.Foreign institutional investors were net sellers in the capital market, as they offloaded equity shares worth Rs 1,662.03 crore on Tuesday, according to provisional exchange data.In India, the death toll due to COVID-19 rose to 2,415 and the number of cases climbed to 74,281 on Wednesday, according to the health ministry.The number of cases around the world linked to the disease has crossed over 42.62 lakh and the death toll has topped 2.91 lakh.Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.03 per cent down at 99.90.Brent crude futures fell 1.07 per cent to USD 29.66 per barrel. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 75.7944 and for rupee/euro at 81.9560. The reference rate for rupee/British pound was fixed at 93.4024 and for rupee/100 Japanese yen at 70.52. DRR MRMR

Rupee rises by 5 paise to 75.46 against dollar on mega stimulus

New Delhi, Dec 8 () India's real GDP growth in 2019-20 fiscal is expected to be slightly below 5 per cent as the impact of stimulus measures will take time to filter through to the economy, IHS Markit has said.
Latest GDP data for July-September quarter showed a significant further moderation in the pace of economic growth to 4.5 per cent, the weakest in six years with a key contributory factor being a slump in manufacturing output. This compared with the 5 per cent growth rate registered in the previous quarter and 7 per cent rate recorded a year ago in September quarter of 2018.
For the first half of 2019-20 fiscal, GDP growth slowed to a pace of 4.8 per cent compared to the 7.5 per cent a year back.
"Financial sector fragilities continue to weigh on India's economic growth momentum, with the high level of non-performing loans on the balance sheets of the public sector banks, constraining their new lending," IHS said in a report.
Furthermore, there are also risks from potential contagion effects from troubled non-bank financial companies (NBFCs) to the balance sheets of some commercial banks, which could further weigh on the overall pace of credit expansion.
In response to the growth slowdown, the Reserve Bank of India (RBI) has eased policy rates significantly during 2019, with a series of rate cuts since February, while the government announced a large reduction in corporate tax rates in September to help boost new investment spending.
"Following the weak GDP outturn for the September quarter, Indian real GDP growth in FY 2019-20 is expected to be slightly below 5 per cent, as it is anticipated that the impact of stimulus measures will take time to filter through to the real economy," IHS said.
The RBI also lowered its GDP growth forecast for 2019-20 from 6.1 per cent to 5 per cent on December 5.
"Confronted with the sharp slowdown in economic growth momentum, the Indian government will face increasing pressure to roll out additional fiscal measures to bolster manufacturing output and kick-start an upturn in the investment cycle. Such measures could include accelerated government spending on infrastructure projects such as roads, railways, and ports, as well as urban infrastructure such as affordable housing and hospitals," it said.
IHS said given that the process of strengthening bank balance sheets has been slow, taking a number of years already, India's financial sector problems are likely to remain a drag on the pace of economic growth over the medium-term outlook.
"Furthermore, any turnaround in the investment cycle could also be relatively protracted, depending on the ability of the government to accelerate its own infrastructure spending program," it said.
IHS said the weakest sector has been auto manufacturing, with output down by 24.8 per cent in September. "The Indian auto sector has slumped into a crisis, with hundreds of thousands of auto sector workers in the production and distribution segments having been laid off over the past 12 months".
A key concern is also the sharp contraction in capital goods output, which was down 20.7 per cent in September 2019.
"This indicates that India's investment cycle is experiencing a severe cyclical slowdown, as reflected in the further slowing of fixed investment growth during the September quarter," it said. "The construction sector growth also slowed to a pace of 3.3 per cent in the September quarter, compared with growth of 5.7 per cent in the June quarter".
Measuring GDP from the expenditure side, an important factor supporting the growth was public consumption, which rose by 15.6 per cent in the September quarter. Private consumption growth also picked up modestly versus the previous quarter, although it continues to expand at a much slower pace than in the past two financial years, IHS said.
"Although the RBI has also provided monetary policy stimulus through its monetary policy easing measures, the impact is likely to be more protracted, since monetary policy stimulus effects on the real economy generally act with long lags. Furthermore, the impaired balance sheets of many public sector banks and NBFCs also will dilute the flow-through of monetary policy easing to the economy," it added. ANZ DP BAL
BAL

India's real GDP growth in FY20 to come below 5 pc: IHS Markit

Mumbai, Apr 28 () Extending its gains for the second session, equity benchmark Sensex jumped 371 points on Tuesday driven by aggressive buying in financial stocks amid hopes of another stimulus package by the government. After a volatile session, the 30-share BSE gauge settled 371.44 points or 1.17 per cent higher at 32,114.52. It hit an intra-day high of 32,199.91 and a low of 31,661.34. Similarly, the NSE Nifty advanced 98.60 points, or 1.06 per cent, to close at 9,380.90. IndusInd Bank was the top gainer in the Sensex pack, rallying over 15 per cent, followed by Bajaj Finance, HDFC, Axis Bank, ICICI Bank, M&amp;M and SBI. On the other hand, Sun Pharma, Nestle India, NTPC, HCL Tech and Bajaj Auto were among the laggards. The Reserve Bank of India's massive liquidity booster to the mutual fund industry continued to spur buying in financial stocks, traders said. Expectation of another stimulus package by the government has also buoyed investor sentiment, they added. Bourses in Hong Kong and Seoul ended on a positive note, while Shanghai and Tokyo settled in the red. Stock exchanges in Europe were trading significantly higher in early deals. International oil benchmark Brent crude futures advanced 1.95 per cent to USD 23.52 per barrel. On the currency front, the rupee rose by 7 paise to provisionally close at 76.18 against the US dollar. Meanwhile, global tally of coronavirus infections has crossed 30 lakh, with over 2.11 lakh deaths. Death toll from COVID-19 in India rose to 934, while total number of cases climbed to 29,435, as per health ministry data. ANSMKJ

Sensex jumps 371 pts, Nifty tops 9,300 as financial stocks soar

<ul><li>Top gainers in the <keyword id="6484188" type="DEFINITION" weightage="20" keywordseo="sensex">Sensex</keyword> pack included Sun Pharma, Tata Steel, ONGC, <keyword id="6355596" type="COMPANY" weightage="20" keywordseo="ultratech-cement">UltraTech Cement</keyword>, NTPC and <keyword id="66427" type="DOMAIN" weightage="20" keywordseo="PowerGrid">PowerGrid</keyword>.</li><li>Markets are hoping for a coordinated action plan from the finance ministers of G7 countries and their central banks to mitigate the threat from <keyword id="1754604" type="PERSON" weightage="20" keywordseo="coronavirus">coronavirus</keyword> on the global economy.</li><li>The <keyword id="6354335" type="COMPANY" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (RBI) too, said it was closely monitoring the situation and is ready to take necessary action.</li></ul>Snapping its seven-day falling streak, equity benchmark Sensex rallied 480 points on Tuesday after gains in index heavyweights Reliance Industries, ICICI Bank and Kotak Bank amid positive cues from global markets. After a highly volatile session, the 30-share index surged 479.68 points or 1.26% to end at 38,623.70 with 28 of its constituents ending in green. The broader NSE Nifty jumped 170.55 points or 1.53% to close at 11,303.30. Top gainers in the Sensex pack included Sun Pharma, Tata Steel, ONGC, UltraTech Cement, NTPC and PowerGrid. On the other hand, ITC and <keyword id="6357149" type="DOMAIN" weightage="20" keywordseo="hdfc-bank">HDFC Bank</keyword> ended in the red. Shares of Vodafone Idea on Tuesday jumped over 6% after reports that the embattled telecom operator had <a href="https://www.businessinsider.in/business/news/vodafone-idea-shares-jump-over-6-pc/articleshow/74458408.cms" data-type="tilCustomLink" target="_blank">paid about ₹3,043 crore to the telecom department</a> towards deferred spectrum dues. Stocks at a 52-week high: ICICI Prudential Private Banks, IDBI Mutual Fund, IPCA Laboratories Limited. Stocks at a 52-week low:Bank of India, Cox &amp; Kings Financial Service Limited, Central Bank of India, Hindustan Oil Exploration Company Limited Domestic market sentiment got a was boost after the Reserve Bank of India (RBI) said it was closely monitoring global as well as domestic situation regarding the impact of deadly coronavirus and ready to take necessary action to ensure orderly functioning of financial markets. <div type="Article" hostid="261" msid="74459835" title="Rupee breaches 73-mark, dives 47 paise against US dollar amid coronavirus uncertainty" mstype="2" mssubtype="0"></div>

 Global stocks also rallied on hopes of stimulus from policy makers to lessen the impact of coronavirus on their economies ahead of the talks between G7 finance ministers and central bank heads. "Globally, financial markets have been experiencing considerable volatility, with the spread of the coronavirus triggering risk-off sentiments and flights to safe haven," the RBI said in a statement. <div type="Article" hostid="261" msid="74458159" title="India restricts export of certain inputs for key medicines to counter shortage due to coronavirus" mstype="2" mssubtype="0"></div>

 Spillovers to financial markets in India have largely been contained. Growing hopes of coordinated policy action to mitigate a broader fallout to economic activity has boosted market sentiment today, it said. Bourses in Shanghai and Seoul ended on a positive note while Hong Kong and Tokyo settled with losses. Stock exchanges in Europe opened up to 2% higher. Brent crude oil futures rose 2.93% to $53.42 per barrel. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/stocks-soar-on-hopes-that-stimulus-will-counter-coronavirus-but-analysts-warn-the-worst-may-be-yet-to-come/articleshow/74458995.cms" data-type="tilCustomLink" target="_blank">Stocks soar on hopes that stimulus will counter coronavirus, but analysts warn the worst may be yet to come</a> <a href="https://www.businessinsider.in/business/news/latest-pwc-data-on-economic-crime-and-frauds/articleshow/74450409.cms" data-type="tilCustomLink" target="_blank">Companies world over are shockingly lax with big economic crime and fraud, shows latest survey</a> <a href="https://www.businessinsider.in/stock-market/article/godrej-consumer-to-page-industries-to-emami-to-marico-and-hul-shares-impact-from-slowdown/articleshow/74439651.cms" data-type="tilCustomLink" target="_blank">Inside India’s consumption slump⁠— stories from Godrej Consumer to Page Industries to Emami and many more</a>

Sensex snaps 7-day losing streak after RBI assures support against coronavirus threat

Mumbai, May 5 () Global ratings agency S&amp;P on Tuesday said additional financial stimulus is "necessary" in India to fight the COVID-19 pandemic, despite the country's weak fiscal position. The stimulus is necessary to support the vulnerable segments of the society and also to prevent additional structural damage to the economy amid the lockdown which has suddenly stopped the business activity, S&amp;P said in a report. In March, the government announced a Rs 1.7 lakh crore relief package focusing on providing food security to the poor and providing money in their hands to fight COVID-19. Many industry watchers have said the package was too less, while some have backed the Centre for not front-loading the package, saying the longevity of the pandemic is not known. The quantum of a new stimulus package is a highly speculated aspect, with some industry watchers advocating caution and others pushing for more spending given the unprecedented nature of the pandemic. "In our view, the Indian government is likely to introduce additional fiscal stimulus measures, which could be broader in scale relative to efforts so far," the agency, which has a 'BBB-/Stable/A-3' rating on the sovereign, said. It added that apart from the direct fiscal transfers to the affected individuals, government officials have indicated a willingness to use a range of options available in their policy toolbox which may include additional support for the corporate and the financial sector as well. The agency said India's fiscal position has been weak for a long time now and is a major factor constraining sovereign credit rating along with the government debt. "Though the fiscal space is limited owing to the government's already-elevated deficit, additional measures could be necessary to support the vulnerable segments of the society, and to prevent additional structural damage to the economy amid the recent sudden-stop in the business activity," it said. S&amp;P added that India will show a "powerful recovery" in the economy in 2021-22, if it is assumed that the pandemic is contained and there is a significant improvement in the global economic conditions. However, if the damage to India's domestic economy is not sufficiently mitigated, the fallout could weigh on the recovery and result in downward pressures on the sovereign and Indian banks, it warned. The agency said systemic pressures for Indian banks could rise owing to the recently announced extension of the nationwide lockdown to check the COVID-19 spread. It said the Rs 1.7 lakh crore relief package along with liquidity easing moves from the Reserve Bank through the targeted long term repo operations will help temper economic risks. Amid speculation of an extension in the three-month moratorium, it said such a move can help borrowers suffering from temporary liquidity issues. Drawing from the commentary and data from Axis Bank, which announced its results last month, the agency said a fourth of the lender's borrowers by loan quantum opting for loan moratorium suggests that some of the stronger borrowers are also opting to conserve liquidity in these tough times. The agency said it will compare the same numbers with the commentary from other banks to assess Axis Bank, but maintained that its Rs 1,400 crore loss for the March quarter reflects a "rise in systemic risk". As of now, its negative outlook on the lender is reflective of the economic risks for the bank, and the Indian economy at large, remaining high, S&amp;P said. The bank will maintain its strong market position and adequate capitalisation over the next 18 months, it said, warning that a large unanticipated asset quality shock can result in a downgrade of the bank's rating. AA ANUANU

More fiscal stimulus measures necessary in India to fight COVID-19: S&P

New Delhi, May 8 () Moody's Investors Service on Friday said the negative outlook on India's rating reflects increasing risks that GDP growth will remain significantly lower than in the past and partly hints at weaker policy effectiveness to address economic and institutional issues. Moody's had, in November 2019, downgraded India's outlook to negative from stable on concerns of lower economic growth. The agency had, however, affirmed country's 'Baa2' rating. In its update to the November forecast released on Friday, the agency said India's credit profile is supported by its large and diverse economy, and stable domestic financing base. This is balanced against high government debt, weak social and physical infrastructure, and a fragile financial sector, which face further pressures amid the coronavirus outbreak, Moody's said in a credit opinion titled 'Government of India- Baa2 negative'. The agency pointed out that the negative outlook reflects increasing risks that economic growth will remain significantly lower than in the past "This is in light of the deep shock triggered by the coronavirus outbreak, and partly reflects lower government and policy effectiveness at addressing long-standing economic and institutional weaknesses, leading to a gradual rise in the debt burden from already high levels," it noted. It said the shock from coronavirus pandemic will exacerbate an already material slowdown in economic growth, which has significantly reduced the prospects for durable fiscal consolidation. Government measures to support the economy should help to reduce the depth and duration of India's growth slowdown, it added. "However, prolonged financial stress among rural households, weak job creation and, more recently, a credit crunch among non-bank financial institutions (NBFIs) have increased the probability of a more entrenched weakening," Moody's said. It said prospects of further reforms to support business investment and growth at high levels, and significantly broaden the narrow tax base, have diminished. "If nominal gross domestic product (GDP) growth does not return to high rates, we expect that the government will face very significant constraints in narrowing the general government budget deficit and preventing a rise in the debt burden," it added. Last month, Moody's had slashed India's growth forecast for calendar year 2020 to 0.2 per cent from 2.5 per cent projected in March. Moody's said fiscal deficit this year is set to widen materially due to sharp decline in growth and stimulus spending, and weaker government revenue. On March 26, the government announced an Rs 1.7 lakh crore (USD 22.3 billion, about 0.8 per cent of GDP) relief package targeting the most vulnerable segments of society. "Overall, the fiscal stimulus is modest compared with support packages implemented in many other countries, particularly given the breadth of India's nationwide lockdown measures. We expect the government will announce additional measures in the future," Moody's said. The existing package targets medical workers and the most vulnerable segments of society, providing direct cash handouts and food to the poor, and supporting workers under the government's employment guarantee scheme. "While the measures will help reduce some of the economic damage to households, the lockdown and ongoing stress in the financial system will cause a sharp decline in India's overall growth, exacerbating fiscal pressures," it added. JD ANSANS

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Rupee rises by 5 paise to 75.46 against dollar on mega stimulus

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India's real GDP growth in FY20 to come below 5 pc: IHS Markit

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Sensex jumps 371 pts, Nifty tops 9,300 as financial stocks soar

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Sensex snaps 7-day losing streak after RBI assures support against coronavirus threat

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More fiscal stimulus measures necessary in India to fight COVID-19: S&P

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India's rating outlook reflects rising risk of slower GDP growth, low policy effectiveness: Moody's

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