10 things you should know before the opening bell on March 4

SUMMARY

Indian share market is expected to open lower on Wednesday following an emergency cut by the US Federal Reserve to shield the US economy from the impact of the coronavirus. The central bank in its statement said that the coronavirus poses evolving risks to economic activity, and in light of these risks, it is cutting rates by a half percentage point to a target range of 1 percent to 1.25 percent. Meanwhile, at 7:07 am, the SGX Nifty was trading 2 points or 0.02 percent lower at 11,268.00, indicating a lower start for the Sensex and Nifty50.

By CNBC-TV18Mar 4, 2020 8:05:13 AM IST (Updated)

1. Asia: Asian shares are trading mixed after Wall Street tumbled in Tuesday trade. The Japanese Nikkei is trading approximately 0.5 percent in the green and the Korean Kospi is up 1.8 percent. Australia's S&P/ASX 200 is however down over a percent while China's Shanghai index is also 0.3 percent in the negative.

2. US: Global equity markets fell more than 3% while gold prices surged on Tuesday after the Federal Reserve cut interest rates in an emergency move to shield the U.S. economy from the impact of the coronavirus, reported Reuters. The Dow Jones Industrial Average fell 745.82 points, or 2.79 percent, to 25,957.5, the S&P 500 lost 81.08 points, or 2.62 percent, to 3,009.15 and the Nasdaq Composite dropped 260.59 points, or 2.91 percent, to 8,691.58.

3. Market At Close On Tuesday: Indian shares ended higher on Tuesday after seven straight sessions of losses, lifted by expectations that major central banks would take measures to mitigate the economic impact of the coronavirus outbreak. The Sensex closed 479.68 points, or 1.26 percent higher at 38,623.70. The broader NSE Nifty rose 170.50 points or 1.53 percent to end at 11,303.30. Meanwhile, foreign institutional investors sold Rs 2,416 crore in the cash market while the domestic institutional investors bought Rs 3,135 crore.

4. Crude Oil: The global oil benchmark ended Tuesday slightly lower under pressure from falling equities, but the losses were contained slightly as top producers considered more output cuts to support prices and the Federal Reserve cut U.S. interest rates to support the economy. Oil fared better than other risk assets classes, with U.S. crude gaining slightly in the session, even as equity markets fell more than 3 percent. Brent crude settled down 4 cents at $51.86 a barrel, after a volatile session. U.S. crude settled up 43 cents a barrel at $47.18.

5. Rupee Close: Falling for the third consecutive session, the rupee on Tuesday slumped 43 paise to close at a 16-month low of 73.19 against the US dollar as investor sentiment remained fragile amid concerns over the impact of coronavirus, and rising crude oil prices. Forex traders said the rupee which started the day on a positive note witnessed heavy volatility during the session as uncertainty over the economic impact of coronavirus spooked investors. At the interbank foreign exchange market, the local currency opened at 72.50. During the day it saw a high of 72.43 and a low of 73.34 against the American currency. The domestic unit finally settled at 73.19 against the greenback, down 43 paise over its previous closing price of 72.76. This is the lowest closing level since November 1, 2018.

6. US Federal Reserve Cuts Rates By 50bps: The US Federal Reserve cut interest rates on Tuesday in an emergency move designed to shield the world's largest economy from the impact of the coronavirus. It was the Fed's first emergency rate cut since 2008 at the height of the financial crisis, underscoring how grave the central bank views the fast-evolving situation. In a statement, the central bank said it was cutting rates by a half percentage point to a target range of 1 percent to 1.25 percent. "The fundamentals of the US economy remain strong. However, the coronavirus poses evolving risks to economic activity. In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate," the Fed said a statement.

7. Finance Minister Introduces Banking Regulation Amendment Bill: Finance minister Nirmala Sitharaman on Tuesday introduced the Banking Regulation Amendment Bill in the Lok Sabha. The bill seeks to amend the Banking Regulation Act, 1949 and seeks to give the Reserve Bank of India (RBI) the powers to regulate cooperative banks. It provides for the issue and regulation of paid-up share capital and equities by cooperative banks. According to the provisions in the bill, the RBI will consult state governments before issuing the order for supersession of boards of cooperative banks registered with states.

8. RBI To Ensure Financial Stability Amidst Coronavirus Fears: Amid volatility in the global financial markets due to the concerns over the economic impact of coronavirus outbreak, the Reserve Bank of India (RBI) said that it is monitoring the situation and is ready to take appropriate actions. “The Reserve Bank of India is monitoring global and domestic developments closely and continuously and stands ready to take appropriate actions to ensure orderly functioning of financial markets, maintain market confidence and preserve financial stability,” the central bank said in a release issued on Tuesday. Globally, the financial markets have been experiencing considerable volatility with the spread of the coronavirus, triggering risk-off sentiments and flights to safe haven, RBI noted.

9. Suggestions Of Lower GST For Auto Sector: A parliamentary panel on Tuesday suggested a lower GST rate for the automobile segment at least till the revival of the sector and uniform road tax across all states against the backdrop of negative growth in the automobile production since July 2018. A parliamentary panel had examined the Demands for Grants 2020-21 of Department of Heavy Industry (DHI) and tabled its report in Parliament. "But, the committee observes that of late, there is a negative growth in the automobile production since July 2018," said the report. The committee noted that some of the factors that contributed to slowdown are non-availability of credit facility to consumers, stringent rules for loan sanction by banks, rise in price due to the upfront payment of third-party insurance for 5 years, introduction of BS-VI vehicles from April 2020; and higher rate of GST on automobiles and components.

10. DoT To Write Fresh Letters Questioning AGR Dues: Vodafone Idea, Bharti Airtel and Reliance Jio on Tuesday paid cumulative over Rs 6,000 crore to the government towards deferred spectrum dues while Tatas said it has deposited another Rs 2,000 crore for ad hoc statutory liabilities. The development came as DoT prepared to send out a fresh missive to telcos questioning them about discrepancies in AGR dues assessed by firms and its own calculations.According to sources, DoT has decided to send fresh letters to telecom companies questioning them about the variation in AGR dues assessed by firms themselves and its own calculations. This is because amounts paid by telcos so far, even those who have announced full and final settlement, are woefully less than DoT's AGR estimates. Sources said the letters would go out within a day or two to telecom companies.