Various estimates regarding the impact of the coronavirus pandemic on the world economy are starting to pour in, with many terming the current crisis as worse than the 2008 global financial crisis.
Stocks are off to a strong start today with gains of over 3%. The Sensex has gained close to a thousand points while the Nifty is trading near the 9,000 mark. This has helped the rupee post some gains against the US dollar.
RBI governor meets the media
Here are highlights from the RBI Governor Shaktikanta Das' press conference:
Manojit Saha reports from Mumbai
* RBI to reduce policy repo rate by 75 bps to 4.4%
* In view of Covid-19 pandemic, MPC advanced meeting was held between 24 and 27 March. 4 of 6 members voted for 75 bps cut
* RBI is monitoring evolving market and macroeconomic situation
* We have to recognise govt's timely measures to contain intensity, duration and spread of the virus
* Looking ahead, food prices may soften further. As a result of Covid-19, demand may weaken
* Projection of growth and inflation depends on spread, intensity and duration of virus, hence RBI is not giving any guidelines on growth and inflation
* Banks and other Financial Institutions should do whatever they can to increase credit flow
* India has locked down and financial activities are under severe stress. Strong fiscal measures are critical to deal with the situation
* Living in extraordinary situation; war effort needs to be mounted against coronavirus using conventional, unconventional tools
Gold set for best week in 11 years
The safe haven asset that initially failed to rally despite high economic uncertainty and stock market volatility is finally beginning to show some llife.
Reuters reports: "Gold edged lower on Friday as investors booked profits, but was set for its best week since December 2008 as record high U.S. jobless claims due to the coronavirus fuelled hopes for more stimulus to stem the economic damage caused by the epidemic.
Bullion has gained 8.2% so far this week, supported by weak U.S. unemployment data and the Federal Reserve's unprecedented economic stimulus measures.
I don't see any real reason to sell gold at the moment other than perhaps to book profits before the weekend, said Stephen Innes, chief market strategist at financial services firm AxiCorp. Everything still looks good for gold except the dreaded need for distress sales."
Coronavirus lockdown worse than 2008 global financial crisis, say analysts
Here's another estimate of the likely impact of the coronavirus pandemic on the economy, this one coming from the ING Group.
IANS reports: "ING Group said in a note that the three-week nationwide lockdown will significantly dent Indias GDP growth, making this an even worse year for the economy than the 2008 global financial crisis. This demands a stronger policy response. Until then, the looming economic misery is poised to push US dollar/rupee above 80 in the coming days
The report said that the biggest whammy will be to private consumption, which accounts for 57 per cent of Indias GDP. With all non-essential consumption dropping virtually to zero for a week in the current quarter means year-on-year GDP growth plunges to just about 1 per cent, and with two weeks of a hit in the next quarter could push it to about -5 per cent."
Stocks rally at open
The benchmark indices are up well over 3% in the initial minutes of trading this morning.
The Sensex has gained close to 1,000 points while the Nifty is trading close to the 9,000 mark.
Overnight, the Dow Jones gained over 6% after hopes of stimulus increased following record job losses.