Stocks recover as RBI promises support Work from home: The bug fix by technology firms
Reserve Bank announces it’s ready to take measures to mitigate effects of Covid-19 spread
MUMBAI: Indian stocks snapped a seven-day losing streak, gaining 1.26% on Tuesday, after the Reserve Bank of India (RBI) said it is ready to take steps to mitigate financial market volatility.
The rout in stock markets worldwide, including India, was also stemmed due to expectations of policy easing by major central banks to counter an economic contraction caused by the Covid-19 epidemic. The benchmark BSE Sensex rose 479.68 points to 38,623.70, while the National Stock Exchange’s Nifty index gained 1.53% to 11,303.30 points.
Later in the day, the US Federal Reserve announced a 50 basis point cut in interest rates, its biggest rate reduction since the 2008 global financial crisis. The emergency action is the first such coming in between scheduled Fed meetings since the financial crisis. However, US stocks were still trading lower at the time of writing this report.
RBI said it is monitoring global and domestic developments closely and stands ready to take appropriate actions to ensure orderly functioning of financial markets, maintain market confidence and preserve financial stability. “Globally, financial markets have been experiencing considerable volatility, with the spread of the coronavirus triggering risk-off sentiments and flights to safe haven. Spillovers to financial markets in India have largely been contained. Growing hopes of coordinated policy action to mitigate a broader fallout to economic activity have boosted market sentiment today,” it said in a statement on Tuesday.
Markets in Asia were mixed, with equities in China and South Korea ending higher, while Japan and Hong Kong fell.
“Comments by central bank officials over possible policy initiatives to curtail the economic impact held markets positive across the globe,” said Vinod
Nair, head of research at Geojit Financial Services. “Broad-based momentum was witnessed in metals and pharma, while the strong dollar led technology stocks higher. With nations across the globe taking precautions over the virus, further longterm economic impact looks minimal.”
Domestic institutional investors (DIIS), including mutual funds and insurance companies, have been net buyers of ₹21,460 crore in Indian stocks so far this year. However, a sell-off by foreign institutional investors (FIIS) has intensified in the last few trading sessions. FIIS have sold Indian shares worth $1.87 billion in the past six trading sessions ending Monday, but are overall net buyers of $1.79 billion so far this year.
“Fluctuations in FII equity flows can also add to volatility,” said Motilal Oswal Financial Services Ltd. Although India is predominantly a domestic consumption-driven economy, its trade interlinkages with the world and integrated supply chains in several sectors bring in an element of risk, according to the brokerage firm. “In fact, this event has introduced additional downside risks to our earnings estimates for FY21,” said the firm. “Till we see a semblance of normalcy returning to the global economy and markets, the Indian markets are likely to track global movements and stay narrow.”
The rupee, on Tuesday, weakened past the 73-mark to hit a fresh 15-month low against the dollar as investors remained worried about the economic fallout of the virus outbreak.
The Indian currency, which opened higher at 72.22, erased gains to end at 73.30. The rupee is the worst-performing currency among Asian currencies, falling 3% since 20 December. Among the other worst-performing currencies, the Thai baht fell 4.3% and the Singapore dollar 2.66%.
BENGALURU/MUMBAI/NEWDELHI: On Tuesday morning, Intel India issued an extensive email advisory to its employees in Bengaluru mentioning travel restrictions, selective home quarantine, guidance to attend large gatherings and even handling packages.
Intel’s pandemic leadership team and emergency operations center teams are monitoring the situation closely, the tech giant said in the email, adding it has begun screening visitors, delivery people and new contingent workers arriving at all its sites.
“Security personnel will now ask visitors, delivery people and new contingent workers about recent travel to areas impacted by Intel’s travel restrictions and potential exposure to Covid-19,” informed an employee who received the email, requesting not to be named.
Intel didn’t respond to an email query.
As the Covid-19 virus sweeps across cities and nations, both domestic firms and MNCS are cancelling key events, adopting work-from-home options and sanitizing workplaces to ensure employee safety.
Xiaomi has called off all phone launch events in March. “We are taking this decision with the objective of reducing exposure risk to Coronavirus (Covid-19) for our Mi fans, media friends, partners and Xiaomi employees,” the company said in a letter. Xiaomi was expected to launch its Redmi Note 9 series in India on March 12.
Oppo’s subsidiary Realme has also called off its March 5 event in New Delhi to launch the Realme 6 smartphone.
“In light of the current reports of Coronavirus impact and related advisory by health officials to maintain social distance as a precautionary measure, I am calling off our biggest event. We will still give live speech in stadium with your watching event online,” Madhav Seth, CEO of Realme tweeted on Tuesday.
Home-grown information technology (IT) firms such as Wipro Ltd and Tata Consultancy Services Ltd have suspended travel to locations prone to the virus, advised working from home and self-quarantine wherever needed.
“...Specifically in Italy, as a precautionary measure we have implemented work from home and travel restrictions. This had also been put in place across some countries in Asia Pacific, and is being monitored and modified based on the situation in each location,” said a TCS spokesperson.
Bengaluru-based Wipro has suspended travel to and transit through mainland China, including Hong Kong and Macau, until further notice. Employees have also been advised to avoid noncritical travel to Singapore, South Korea, Japan and Italy.
Wipro has enabled a significant number of employees in China to work from home, implemented thermal screening, surgical masks and frequent sanitization of premises there, a Wipro spokesperson said.
For many individuals and organizations, Microsoft Teams video-conferencing, chat and collaboration are helping people continue to work and collaborate.
“By making Teams available to all for free for six months, we hope that we can support public health and safety by making remote work even easier,” a Microsoft spokesperson said.
Among social media companies with offices in India, Twitter has asked its employees across the world to work from home if they can and join internal meetings remotely. All workplaces and real estate are being deepcleaned and sanitized and visual reminders encouraging personal hygiene best practices are being put.