13th May's MORNING NEWSLETTER .

Good Morning! The Rs 20 lakh crore economic stimulus announced by the Prime Minister takes into account the measures that the government and RBI have already rolled out in the form of Rs 1.7 lakh crore in cash and free food and Rs 5.24 lakh crore in liquidity support. That pegs the new stimulus at Rs 13.1 lakh crore, or 6.5% of GDP, which will likely come in the form of loan guarantees for MSMEs, wage support for MSME workers, aid for migrant labourers, tax sops to make local production competitive, tax cuts to spur spending and support for construction and housing sectors. The total package at 10% of GDP puts India in league with likes of Germany, Sweden and France and way ahead of Spain, Italy, the UK and China. MARKET CUES: Where do we stand >>> Nifty futures on the Singapore Exchange-traded 211 points, or 2.29 per cent, higher at 9,436 at 7 am (IST), indicating a gap-up start for Dalal Street. On Tuesday, Nifty50 staged a smart recovery from the day's low, but failed to hold above its immediate support at 9,200 level by close. The index formed an indecisive Doji on the daily chart. Pullback rallies are getting sold into and lower lows are being formed, which hint at short-term pressure Looking at the overall F&O data, analysts maintained a negative to rangebound stance on Nifty and expect the index to fall towards 9,000 and then 8,800 level in the coming days. India VIX has negated lower high and low sequence of last five weeks, signalling further pressure on any bounce Elsewhere in Asia, stocks drifted lower. Japan's Nikkei 225 fell 1.11 per cent while Hong Kong's Hang Seng slipped 0.55 per cent and China's Shanghai Composite eased 0.30 per cent US stocks tanked overnight. Dow fell 457 points, or 1.89 per cent, while S&P500 declined 60.20 points, or 2.05 per cent, and the Nasdaq 189 points, or 2.06 per cent. Oil prices fell in early Asian trading after industry data showed a rise in US crude inventories. Brent crude slipped 49 cents, or 1.6 per cent, to $29.49, after having risen 1.2 per cent on Tuesday. WTI crude fell 41 cents, or 1.6%, to $25.37. The rupee surged 22 paise to close at 75.51 against the US dollar on Tuesday, amid a weak American currency in the overseas market. The dollar was on the defensive against its rivals on Wednesday as traders looked to Federal Reserve Chairman Jerome Powell’s speech amid rising speculation the US could one day adopt negative interest rates. The euro changed hands at $1.0848 after having gained about 0.4% in the previous session. LOOK WHO'S Big package, bold reforms... Prime Minister Narendra Modi on Tuesday said the government would unveil a Rs 20 lakh crore package to help nurse the economy back to health and also unleash a new set of reforms focused on land, labour, liquidity and legal frameworks that would power India’s push for self-reliance. Modi said the package will focus on land, labour, liquidity and laws, and will cater to various sectors including the cottage industries, MSMEs, the working class, middle class and industry, among others. 5G auction put on hold… The government plans to split the next telecom spectrum auctions by offering 4G airwaves some time this year and 5G probably in 2021. The move would benefit Vodafone Idea and Bharti Airtel, which want the 5G spectrum sale to be delayed, citing stretched finances and an underdeveloped ecosystem, analysts said. DoT officials pointed out that a 5G spectrum auction this year would have attracted few bidders, indicating the reason for the U-turn. Vedanta set to go private… Metals and mining magnate Anil Agarwal plans to offer Rs 16,200 crore in cash to take the Mumbai-listed Vedanta private, the Indian company said on Tuesday. Vedanta Resources, the London-based outfit which Agarwal delisted in 2018, is offering Rs 87.5 for a share of Vedanta Ltd to minority shareholders of the BSE/ NSE-traded company. The offer price is at a 2% discount to Vedanta’s Tuesday closing price of Rs 89.30 on the BSE but represents a 10% premium to the stock’s last trading price on Monday. AND WHO'S  Factory output lowest in 39 years... India’s industrial output contracted by a record 16.7% in March, dragged down by a sharp slide in the manufacturing sector as the initial impact of the Covid-19 virus dealt a devastating blow, prompting economists to say RBI will have to cut rates to help revive the sector. Data released by the National Statistical Office on Tuesday showed the index of industrial production contracted an annual 16.7% compared with a 2.7% expansion in the year-ago month, marking the sharpest contraction in nearly 39 years. Nifty futures OI lowest in a decade… Outstanding positions in Nifty futures in May series are at the lowest level in a decade as traders remain uncertain about the market direction after the recent rebound. Open interest or outstanding positions in the Nifty May series fell 0.4% on Tuesday to 73.93 lakh units. Nifty futures open interest on the April contracts expiry day stood at 96.1 lakh units against the usual level of above 1 crore. Analysts said open interest is at one-decade low as there is a lack of interest after the market recovered. Rs 70k cr NBFC papers up for redemption… Over Rs 70,000 crore of debt issued by nearly 60 NBFCs is coming up for redemption in the first quarter of FY21. The good news is that more than half of the debt is concentrated with the top 15 borrowers with strong parentage, and a portion of that has already been redeemed. Also, many of these issuers have floated bonds last month and are liquid, given that there has been hardly any offtake of retail loans since the lockdown. Analysts say the problem that NBFCs will face will not be in terms of raising liquidity but in recovering loans from borrowers. China VCs halt India plans… Chinese venture capital investors are turning increasingly anxious about India’s new foreign direct investment policy, after the government last month mandated that all investments from countries sharing a land border with India will require its prior approval. Deal flows into the country have already been impacted. Some investors have even withdrawn term sheets that were on the table, investors said on condition of anonymity, adding that they were waiting for clarifications from the government on the policy tweak. Meanwhile... 2.7 cr Indian youngsters lost jobs in April... Over 2.7 crore youngsters in their 20s lost jobs in April, Centre for Monitoring Indian Economy (CMIE) data showed on Tuesday, highlighting the pain inflicted by Covid-19 and the lockdown imposed to combat its spread. The unemployment rate slowed to 24% from 27% in the week ended May 10. Job losses among the vulnerable are likely to raise the proportion of households in debt, CMIE said.  The DAY PLANNER Q4 Earnings: Kotak Bank I Maruti I Godrej Consumers | MphasiS | ABB | Siemens UK March Balance of Trade (11.30 am) UK Q1 Prelim GDP Growth Rate (11.30 am) UK March Industrial Production (11.30 am) Euro Area March Industrial Output ( 02.30 pm) US April PPI (06.00 pm) Fed Chair Powell Testimony (06.30 pm) HAPPY TRADING !!