Mint Lite | Foreign fund bond holdings at three-year low and other news to know

Mint Lite is a quick update to bring you up to speed on all the news you need to know—and some things that are just fun to know—in five minutes before you start your day

Infections in Brazil continue to rise and police opened an investigation into Rio de Janeiro’s handling of the coronavirus crisis. Russia reported more recoveries than new cases for a second day. Confirmed cases in US rose at the slowest pace since March, and 10 days of national mourning for coronavirus victims began on Wednesday in Spain, the longest official mourning period in the country’s modern history. For the rest of the news you need to know before you start your day, here’s Mint Lite.

EU plans stimulus package

The European Union’s executive arm has set out the details of a fiscal recovery package worth 750 billion euros (about $826 billion), and Japan is planning new economic stimulus valued in excess of $1 trillion as governments try to damp the effects of the pandemic. The EU is faring worse than hoped, and some of its 27 economies are projected to shrink as much as 10% this year. Italy, which suffered the worst of the pandemic along with Spain, will receive 82 billion euros ($90 billion) in emergency grants and up to 91 billion euros in low-interest loans. Spain and France are the next biggest beneficiaries. The money would largely fund investment and reforms, while some funds will go towards healthcare and to the EU’s poorest regions. In Japan, a new $1.1 trillion stimulus package that includes significant direct spending to shore up the economy was approved on Wednesday. This is the second major package in just over a month to keep businesses and households afloat amid the deepening coronavirus recession. It includes loan guarantees and private sector contributions along with 31.9 trillion yen in fresh government spending that will be paid for with new bond issuances. The new package takes Japan’s total spending to combat the virus fallout to 234 trillion yen ($2.18 trillion), or about 40% of gross domestic product.

Busy day for trump, twitter

It’s been a busy day for US President Donald Trump on Twitter. He started out by accusing Twitter of stifling free speech, after the social media company started fact-checking his posts. Following years of criticism that the social network let the president spread misinformation, two of Trump’s tweets that made unsubstantiated claims about mail-in voting were appended with links reading ‘Get the facts about mail-in ballots’. It was the first time Twitter did so, and the president responded by tweeting that the company was interfering with the 2020 election. Later in the day, the president in a tweet offered to mediate on the standoff between India and China at the border. His past offers of help, also made on Twitter before, relate to offers to mediate between India and Pakistan after Jammu and Kashmir’s special status was revoked last year. The offers were declined.

Foreign fund holdings of govt bonds at three-year low

Foreign funds have slashed holdings of Indian government bonds to the lowest in three years amid dwindling returns. The amount of sovereign securities held by global funds is now at ₹767 billion ($10 billion) from a peak in February (see chart) as steep hedging costs diminished pay-offs in one of Asia’s highest-yielding markets. The rupee’s plunge by 6% in 2020 further reduced the appeal of debt, reports Bloomberg. Foreigners hold ₹1.1 trillion of India’s outstanding debt. The government has taken steps to draw overseas buyers for its ₹22 trillion of central and state government debt, but funds have found few reasons to buy. RBI’s 40 basis points rate cut last week reduced the appeal of debt. The prospect of further increase in government borrowing remains high as the economy is likely to shrink till March 2021.

France bans HCQ, India okays use

France on Wednesday cancelled a decree allowing use of hydroxychloroquine, an anti-malarial drug, to be administered to covid-19 patients. The announcement comes two days after the World Health Organization said it was pausing a large trial of the malaria drug due to safety concerns. The Indian Council of Medical Research, however, has said that no major side effects of hydroxychloroquine have been found during studies conducted in India, and said its use should be continued for preventive treatment of covid-19. ICMR said the only side effects were nausea, vomiting and occasional palpitations. It has expanded use of the drug as a preventive from healthcare workers to frontline workers as well. British medical journal The Lancet has reported that patients getting hydroxychloroquine had increased death rates and irregular heartbeats, adding to a series of other disappointing results for the drug as a way to treat the disease.

300 arrested in Hong Kong

Police in Hong Kong fired pepper pellets and arrested 300 protesters as thousands of people took to the streets on Wednesday to voice anger over national security legislation proposed by China. The protestors were planning to disrupt the debate on a bill that would criminalise disrespect of the Chinese national anthem but heavy police presence around the Legislative Council deterred them. The bill is expected to become law next month, and will govern the use and playing of the Chinese national anthem. The Chinese government’s proposal for national security legislation is aimed at tackling secession, subversion and terrorism in Hong Kong. The planned laws could see Chinese intelligence agencies set up bases in Hong Kong. Despite the unrest in Hong Kong, a city that is a hub of international finance and trade, world shares surged on Wednesday as reports of the EU rescue fund helped offset the concerns about Beijing’s proposed laws.

Curated by Shalini Umachandran. Have something to share with us? Write to us at businessoflife@livemint.com or tweet to @shalinimb

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