Rate cut fails to boost Indian stock markets, Sensex down

Indian stock markets erased all their initial gains on Friday, with the BSE Sensex closing 131.18 points lower, although the Reserve Bank of India (RBI) announced an emergency rate cut of 75 basis points.

Indian rupee strengthened further and traded at 74.80 against US dollar.

The 30-stock Sensex tumbled after gaining over 1,100 during the initial trade.

The RBI Governor’s grave concern over the global economy and a likely slowdown in India appeared to have dampened the initial euphoria in the market.

Sensex closed at 29,815.59, lower by 131.18 points or 0.44 per cent from the previous close 29,946.77.

It had opened at 30,747.81 and touched an intra-day high of 31,126.03.

However, the Nifty50 on the National Stock Exchange closed at 8,660.25 higher by a meager 18.80 points or 0.22 per cent from its previous close.

In a much anticipated move, amidst the novel coronavirus pandemic, RBI Governor Shaktikanta Das announced a 75 bps cut in repo rate to 4.4 per cent.

He, however, noted that that there is high probability of parts of the global economy slipping into a recession. “Expectations of a shallow recovery in 2020 from 2019’s decade low in global growth have been dashed,” Das said.

“The outlook is now heavily contingent upon the intensity, spread and duration of the pandemic. There is a rising probability that large parts of the global economy will slip into recession.”

Providing further relief to the corporate sector in view of the coronavirus crisis, the Securities and Exchange Board of India (Sebi) on Thursday said that the top 100 companies by market capitalisation can delay their Annual General Meetings (AGM) by a month.

Generally, a company has to hold its AGM within a period of five months from the date of closing of the financial year. The AGMs for financial year 2019-20 were originally due by August 31, and after the decision, companies can now hold their AGMs by September 30.

Further, the security market regulator also extended the deadline for holding meetings of the nomination and remuneration committee, stakeholders relationship committee and the risk management committee by three months till June 30. All these committees are required to meet once in a fiscal year and the original due date for the current fiscal was March 31.

The regulator also said that the Standard Operating Procedure (SoP) on imposition of fines and other enforcement actions for non-compliances with provisions of the LODR which had to come into effect for compliance period ending on or after March 31, would now come into effect from compliance periods ending on or after June 30, 2020.

The relaxations announced on Thursday are among of a series of relief measures recently announced by the Securities and Exchange Board of India.

On Monday, it relaxed compliance regulations for listed entities which have listed their non-convertible debentures (NCD), commercial papers (CP), non-convertible redeemable preference shares (NCRPS) and municipal debt securities.

The issuance date for debt securities was extended by 60 days to May 31, and the timeline for filing of large corporate initial and annual disclosures till June 30.

Earlier, Sebi allowed listed companies to file their fourth quarter and annual financial results by June 30. In general, companies have to report their earnings within one month of a quarter-end and if results get delayed, the companies have to inform the exchanges. The regulator also extended the date of filing quarterly corporate governance reports by one month and for releasing quarterly shareholding pattern by three weeks.

Sebi, along with the Ministry of Corporate Affairs (MCA), have sprung into action in order to provide relief to companies and businesses amid the coronavirus crisis and the ongoing 21-day lockdown. Last week, the MCA relaxed several norms including board meeting obligations and physical official meetings for financial reports and restructuring.

Meanwhile, Commodity bourses Multi Commodity Exchange (MCX) and the National Commodity & Derivatives Exchange (NCDEX) on Thursday announced that they would reduce their trading hours starting March 30 till April 14 in view of the nationwide COVID-19 lockdown.

As per the revised timings, trading would end at 5 p.m. in both the key exchanges. It would start at the usual time 9 a.m. Currently, trading hours for commodity exchanges ranges from 9 a.m. to 11.30 p.m.

Indo-Asian News Service