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The World This Week – 23rd March 2020 to 27th March 2020

Indian Equity Market
·        Indian markets continued to close in red for the sixth consecutive week. BSE Sensex and Nifty 50 fell ~0.3% and ~1%, respectively, however theØ losses were trimmed by the stimulus measures announced by the Reserve bank of India in the form of repo rate cut repo rate by 75 basis points (bps) to 4.4% and economic stimulus measure announced by the Finance Minister Nirmala Sitharaman in the form of 1.7 lakh crore relief package for the poor and migrant workers in the country to fight the economic fallout from the coronavirus pandemic.  
·        Going forward, the growth in number of COVID-19 cases among other factors such as the movement of rupees, crude oil prices, foreignØ currency inflows and outflows will continue to determine the forward-looking market pattern.
·        We expect the trading range for Nifty between 7800 -9000 in the near term.
Indian Debt Market
·        Government bond prices ended higher last week. The yield of the 10 year benchmark 6.45% 2029 paper settled at 6.14% on March 27asØ against 6.26% on March 20.  
·        RBI’s Monetary Policy Committee decided  to cut the repo rate by 75 basis points (bps) to 4.4% ,reverse repo-rate by 90 bps to 4% and cashØ reserve ratio (CRR) by 100 bps to 3%, gave gilts a boost in the last week.  
·        The Central bank purchased dated securities for a total notified Rs 30,000 crore supporting the bond prices.
·        The Central bank also announced the auction of 77 day and 84 day cash management bills for a total notified Rs 80,000 crore
Domestic News
·        Finance Minister Nirmala Sitharaman announced a Rs 1.7 lakh crore relief package- PM Gareeb Kalyan, for the poor and migrant workers in theØ country to combat the challenges posed by the coronavirus(Covid-19) pandemic amid 21 days lockdown.  
·        RBI allowed lending institutions and banks a 3-month moratorium, and allowed them to defer interest on all loans and working capitalØ repayments.  
·        RBI reduced the cash reserve ratio (CRR) of all banks by 100 basis points to 3.0% of net demand and time liabilities (NDTL) with effect from theØ reporting fortnight beginning March 28, 2020,for a period of one year ending on March 26, 2021.  
·        RBI also decided to reduce the requirement of minimum daily CRR balance maintenance from 90% to 80% effective from the first day of theØ reporting fortnight beginning March 28, 2020,one-time dispensation available up to June 26, 2020.  
·        RBI allowed lending institutions and banks a 3-month moratorium, and allowed them to defer interest on all loans and working capital repayment
International News  
·        US equities surged in the last week mainly boosted by a $2 trillion rescue package to support the US economy that is affected by Covid-19Ø outbreak. Dow Jones, NASDAQ recorded a growth of ~17% and ~13% on WoW basis.  
·        US Fed announces the purchase of an unlimited amount of Treasuries and securities tied to residential and commercial real estate toØ  prevent a credit crunch. It also announced new lending programs worth $300 billion to support the financial markets.Ø  
·        Britain’s FTSE surged 12% as Bank of England announced a quantitative easing of 645 billion pounds to combat the economic impact ofØ
·        Coronavirus followed by the series of stimulus measures taken up by the central banks and governments across the world.  UK consumer prices advanced 1.7% in February, slower than the 1.8% gain in January; producer prices were 0.4% on the year to February 2020,Ø down from 1.0% in January 2020.  
·        Other European equities, too, advanced on optimism over the US stimulus package. France’s CAC 40 and Germany’s Dax rose about 12% each.
·        Asian equities ended in positive territory. Japan’s Nikkei index rallied 17% on tracking gains in US equities.


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