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Dow drops over 400 points amid stimulus talks

New York: Wall Street’s major averages closed sharply lower as investors looked to updates on a US stimulus deal, while weighing the impact of a continued increase in coronavirus cases.

The Dow Jones Industrial Average dropped 410.89 points, or 1.44 per cent, to 28,195.42. The S&P 500 was down 56.89 points, or 1.63 per cent, to 3,426.92. The Nasdaq Composite Index decreased 192.67 points, or 1.65 per cent, to 11,478.88.

All the 11 primary S&P 500 sectors pulled back, with energy down 2.1 per cent, leading the losses.

US-listed Chinese companies traded mostly lower, with seven of the top 10 stocks by weight in the S&P US Listed China 50 index ending the day on a downbeat note.

US House Speaker Nancy Pelosi said that the White House and congressional lawmakers must reach an agreement in 48 hours if they want to pass a new COVID-19 relief package before the presidential election in November.

Democrats and Republicans have tried for weeks to work toward a follow-up package to combat the economic effects caused by the COVID-19 pandemic. Yet the two sides remained far apart on certain issues.

Pelosi and Treasury Secretary Steven Mnuchin were slated to talk again this week. Market sentiment was also dented as coronavirus cases continued to surge.

The global COVID-19 caseload surpassed the milestone of 40 million, according to a tally by Johns Hopkins University. The United States reported more than 8.2 million cases and over 220,000 deaths, both the highest around the world.

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IMF may further slash global economic outlook

New Delhi: The International Monetary Fund (IMF) is likely to further revise economic growth forecasts downwards in its upcoming outlook update due to the severe impact of the coronavirus pandemic and the resultant lockdowns across the world.

In a blog post, the Chief Economist of IMF, Gita Gopinath, said that although many countries begin to ease containment policies and gradually permit the resumption of economic activity, there remains “profound uncertainty” about the path of the recovery.

“For the first time since the Great Depression, both advanced and emerging market economies will be in recession in 2020. The forthcoming June World Economic Outlook Update is likely to show negative growth rates even worse than previously estimated. This crisis will have devastating consequences for the world’s poor,” she said.

Gopinath said that the “Great Lockdown” is expected to play out in three phases, first as countries enter the lockdown, then as they exit, and finally as they escape the lockdown when there is a medical solution to the pandemic.

Many countries are now in the second phase, as they reopen, with early signs of recovery, but with risks of second wave of infections and re-imposition of lockdowns.

Surveying the economic landscape, the sheer scale and severity of the global lockdown are striking, she added.

“Most tragically, this pandemic has already claimed hundreds of thousands of lives worldwide. The resulting economic crisis is unlike anything the world has seen before,” the IMF Chief Economist said.

She said that it is possible that with pent-up consumer demand, there will be a quicker rebound, unlike after previous crises. However, this is not guaranteed in a health crisis as consumers may change spending behavior to minimise social interaction, and uncertainty can lead households to save more, the blog post added.

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Key trade bodies calls for boycott of Chinese goods

New Delhi: Condemning China’s military aggression along the Line of Actual Control in Eastern Ladakh, the Confederation of All India Traders (CAIT) has called for a boycott of Chinese goods, listing 450 imported items.

The development comes as the India-China faceoff in Galwan Valley in Ladakh turned violent on Monday, leading to multiple casualties on both sides.

The CAIT said that the objective is to reduce import of Chinese finished goods by $13 billion or about Rs 1 lakh crore by December 2021.

At present, India imports about Rs 5.25 lakh crore, i.e. $70 billion, worth of goods annually from China.

“In the first phase, CAIT has selected more than 500 broad categories of items which include more than 3,000 items which are made indigenously in India also, but succumbing to the temptation of cheap items, these were being imported from China until now,” CAIT said in a statement.

“Manufacturing of these items does not require any sophisticated technology and even if they do, India is well equipped and therefore the goods manufactured in India can be used very easily in place of the Chinese goods which will reduce India’s dependence on China for these goods,” it added.

Meanwhile, the Swadeshi Jagran Manch on Wednesday demanded that Chinese companies be banned from participation in the tendering process in the country.

The Manch — an affiliate of Rashtriya Swayamsevak Sangh that deals with economic issues — also demanded the cancellation of the lowest bid made by China’s Shanghai Tunnel Engineering Co Ltd for the construction of an underground stretch of the Delhi-Meerut Regional Rapid Transit System project.

Appealing to the Indians to boycott Chinese products, the Manch demanded a ban on the import of Chinese goods and levy of cess on China-made products sold in India.

Manch co-convener Ashwani Mahajan said he is appealing to the Indian actors, sportspersons and other celebrities not to promote Chinese products which, he said, would be a true tribute to the soldiers who made the ultimate sacrifice.

Mahajan also demanded that an agreement inked recently between the Maharashtra government and a Chinese auto company be cancelled.

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