Morning News Call – India, June 11

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To access a PDF version of this newsletter, please click here here If you would like to receive this newsletter via email, please register at: here FACTORS TO WATCH 11:00 am: Prime Minister Narendra Modi at Indian Chamber of Commerce’s annual plenary session in New Delhi. 4:00 pm: Health ministry likely to brief on COVID-19 situation in New Delhi. INDIA TOP NEWS • India inflation likely to have hit six-month low in May: Reuters poll India consumer price inflation is likely to have moderated to a six-month low in May on a softer rise in food prices as supply disruptions eased after businesses reopened from the coronavirus lockdown in many parts of the country, a Reuters poll found. • S&P affirms India‘s long-term sovereign credit rating, outlook Standard and Poor’s affirmed its rating on India‘s long-term foreign and local currency sovereign credit at the lowest investment-grade level and retained its stable outlook on the economy on Wednesday. • India‘s fuel demand nearly doubles in May as lockdowns ease India‘s fuel demand nearly doubled in May from the previous month as the country eased coronavirus-led restrictions, Oil Ministry data showed on Wednesday, signalling a slow revival of economic activity. • Panacea says aiming to make COVID-19 vaccine Indian biotech firm Panacea Biotec said on Wednesday it would partner with U.S.-based Refana to make a potential vaccine for COVID-19. • Indians pawn gold for loans as borrowing from banks becomes tougher Many Indians are using gold to secure loans, bankers and industry experts say, as banks are otherwise increasingly unwilling to lend during the coronavirus pandemic due to fear of the loan souring. • Tiny Singapore replaces U.S. as India‘s top market for engineering exports Singapore replaced the United States as India‘s biggest overseas market for engineering parts in April, with exports rising 95% to $553 million from a year earlier, a trade body said, as statistics are upended by coronavirus lockdowns. • HPCL delays $3 billion Vizag refinery expansion – source Hindustan Petroleum has pushed back the completion of a billion-dollar expansion at its southeastern Vizag refinery to at least October-November due to a labour shortage and the onset of monsoon, a company source said. • Dutch Tata Steel employees strike over planned job cuts -union Workers at Tata Steel’s Dutch operations went on strike on Wednesday to protest against planned job cuts, the FNV union said. GLOBAL TOP NEWS • Fed vows to support U.S. economy’s ‘long road’ to recovery after dire 2020 The U.S. Federal Reserve on Wednesday signaled it plans years of extraordinary support for an economy facing a torturous slog back from the coronavirus pandemic, with policymakers projecting the economy to shrink 6.5% in 2020 and the unemployment rate to be 9.3% at year’s end. • South Korea June 1-10 exports soar 20.2%, raising global recovery hopes South Korea‘s exports for the first 10 days of June soared 20.2% from the same period a year earlier, raising hopes for a firm recovery in shipments for the trade-reliant economy as many countries lift stringent coronavirus lockdown measures. • George Floyd’s brother decries ‘a modern-day lynching’ in testimony to U.S. Congress George Floyd’s younger brother took his grief to the U.S. Congress on Wednesday with an impassioned plea that lawmakers not let his brother’s death be in vain, lamenting that he «didn’t deserve to die over $20» in a what he called a lynching. LOCAL MARKETS OUTLOOK (As reported by NewsRise) • SGX Nifty nearest-month futures were 0.4% lower at 10,098. • The Indian rupee is expected to trade little changed against the dollar after the U.S. Federal Reserve projected interest rates could remain near zero till 2022 to help the economy rebound from the coronavirus outbreak, driving the dollar index, shares, and Treasury yields lower. • Indian government bond yields are likely to fall in early session, after S&P Global Ratings yesterday affirmed the country’s sovereign rating and maintained its stable outlook. The yield on the benchmark 5.79% bond maturing in 2030 is likely to trade in a range of 5.70%-5.75%. GLOBAL MARKETSThe Dow and S&P 500 ended a choppy session lower on Wednesday after the Federal Reserve reassured investors of its support for the economy but projected a 6.5% decline in gross domestic product this year. • Asian shares eased while bonds rallied after a downbeat economic outlook from the U.S. Federal Reserve stoked speculation it would have to add to already historic levels of stimulus to safeguard recovery. • The dollar steadied against riskier currencies and the safe-haven yen hit a one-month high, as the U.S. Federal Reserve‘s dour economic outlook spooked investors. • U.S. Treasury yields fell on Wednesday after the Federal Reserve repeated its promise of continued extraordinary support for the economy and kept the size of its bond purchase program unchanged. • Oil prices fell more than 2% on worries about slow demand growth with coronavirus cases rising, U.S. crude stockpiles hitting an all-time high and the U.S. Federal Reserve projecting recovery from the pandemic would take years. • Gold prices touched a more than one-week high, as bleak economic projections from the U.S. Federal Reserve boosted demand for the safe-haven metal. CLOSE FII INVESTMENTS EQUITIES DEBT PNDF spot 75.58/75.61 June 10 476.70 (499.93) crores crores 10-yr bond yield 5.77 pct Month-to-date 22,353 (2,091) crores crores Year-to-date (-17,992) (1,07,505) crores crores (FII investment numbers are in Indian rupees. Source: National Securities Depository Limited) For additional data: India govt bond market volumes Stock market reports Non-deliverable forwards data Corporate debt stories [IN CORPD] Local market closing/intraday levels [IN SNAPSHOT] Monthly inflows [INFLOWS RTRS TABLE IN] ($1= 75.59 Indian rupees) (Compiled by Nachiket Tekawade in Bengaluru)