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Morning News Call – India, June 26

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FACTORS TO WATCH
11:00 am: Prime Minister Narendra Modi to launch “Aatma Nirbhar Uttar
Pradesh Rojgar Abhiyan.”
3:00 pm: Principal Economic Advisor Sanjeev Sanyal at FICCI’s webinar on
“Market Disruptions and Adaptations in the New Normal.”
4:00 pm: Finance Minister Nirmala Sitharaman at BJP’s Virtual Rally.
4:30 pm: Union Bank of India’s MD & CEO Rajkiran Rai G. at PHD Chamber of
Commerce’s webinar.

INDIA TOP NEWS
• India’s auto and pharma sectors not ready to wean off China
Days after a border clash with China this month in which 20 Indian soldiers
were killed, New Delhi told firms to find ways to cut imports from China. But
two big industries, automobiles and pharmaceuticals, say this is easier said
than done.
• India says China amassed troops along border in violation of agreements
China has deployed large numbers of troops and weapons along a disputed
Himalayan border in violation of bilateral agreements, India’s foreign ministry
said on Thursday, accusing Beijing of escalating tensions and triggering a
deadly clash last week.
• Unilever’s ‘Fair & Lovely’ to get makeover after backlash
Unilever will drop the word “fair” from its “Fair & Lovely” skin lightening
products, it said on Thursday, in the latest makeover of a brand in response to
a global backlash against racial prejudice.
• Boycott of Chinese goods may not be feasible, Indian exporters say
A boycott of goods from China may not be feasible as India is dependent on
such imports, although New Delhi should try to cut its dependence on them,
India’s top export promotion grouping said on Thursday.
• Indian capital readies vast quarantine centre as coronavirus cases mount
Authorities in New Delhi worked to convert a spiritual centre into a huge
quarantine facility on Thursday as novel coronavirus cases in the Indian capital
overtook the financial hub Mumbai for the first time.
• India considering 20-25% import tax on solar modules
India is considering imposing an import tax of 20-25% on solar modules and
15% on solar cells for a year beginning in August, its power minister said on
Thursday.
• India’s sugar output, exports could rise in 2020/21-trade body
India’s sugar production in the next marketing year could jump by 12% from a
year ago as farmers in the second biggest producing western state of Maharashtra
expanded the area under sugar cane, a leading trade body said on Thursday.

• India’s richest state bans guru’s ‘spurious’ coronavirus treatment
India’s richest state on Thursday banned a “spurious” coronavirus treatment
manufactured by a company founded by popular yoga guru, which he says has a 100%
record in curing patients.

GLOBAL TOP NEWS
• Federal Reserve caps bank dividend payments after pandemic analysis
The U.S. Federal Reserve announced on Thursday it will cap big bank dividend
payments and bar share repurchases until at least the fourth quarter after
finding lenders faced significant capital losses when tested against an economic
slump caused by the coronavirus pandemic.
• No breakthrough yet from plodding global recovery outlook
The outlook for a global economic recovery over the past month has worsened
or at best stayed about the same, according to a firm majority of economists in
Reuters polls, with the ongoing recession expected to be deeper than predicted
only last month.
• Texas, at center of new U.S. coronavirus surge, pauses reopening
The governor of Texas temporarily halted the state’s reopening on Thursday
as COVID-19 infections and hospitalizations surged in the state and new daily
cases around the country climbed to a near-record high.

LOCAL MARKETS OUTLOOK
(As reported by NewsRise)
• SGX Nifty nearest-month futures were 0.5% higher at 10,281.80.
• The Indian rupee is expected to open higher against the dollar tracking
the rebound in U.S. and Asian equities despite U.S. virus cases continuing to
rise at a near-record pace.
• Indian government bond yields are likely to edge higher in early session,
as a weekly auction today will boost supply in the debt market. Lack of clarity
from the central bank to tackle concerns of excess supply will also weigh on
appetite, traders said. The yield on the benchmark 5.79% bond maturing in 2030
is likely to trade in a range of 5.88%-5.95% till the auction outcome today.

GLOBAL MARKETS
• Wall Street’s main indexes closed higher in choppy trading on Thursday,
with bank stocks soaring ahead of annual stress test results and helping to
offset investor jitters over alarming increases in new coronavirus cases.
• Asian stock markets ground higher, and are set to end a choppy week more
or less where they began it as surging coronavirus infections cast a shadow over
encouraging economic data and checked hopes for a swift global recovery.

• The dollar held firm as caution over rapid rises in U.S. coronavirus cases
cast doubt over the reopening of the economy, keeping the allure of its
safe-haven value.
• U.S. Treasury yields dipped on Thursday, but were off earlier lows as
traders weighed signs of a resurgence in the coronavirus against a round of
economic data suggesting the worst of the lockdown-induced damage could be over.

• Oil prices rose, extending gains from the previous day on optimism about
recovering fuel demand worldwide, despite a surge in coronavirus infections in
some U.S. states and indications of a revival in U.S. crude production.
• Gold edged higher and was set for its third consecutive weekly gain, as
coronavirus cases around the world surged and jittery investors opted for
safe-haven assets.

CLOSE FII INVESTMENTS EQUITIES DEBT
PNDF spot 75.60/75.63 June 25 1,090.41 crores 112.32 crores
10-yr bond yield 5.89% Month-to-date 23,414 crores (2,600) crores
Year-to-date (16,931) crores (1,08,014) 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 = 75.51 Indian rupees)

(Compiled by Pranay Prakash in Bengaluru.)