Today's top business news: Indian stocks suffer worst week in 4 years, rupee hits 6-month low, no financial relief for telcos yet, and more

People look at the screen displaying the Sensex results on the facade of BSE building in Mumbai on February 1, 2020.

People look at the screen displaying the Sensex results on the facade of BSE building in Mumbai on February 1, 2020.   | Photo Credit: Reuters

News updates from the world of economy, markets, and finance

3:30 PM

Nifty, Sensex suffer worst week in 4 years

The benchmark indices fell for the sixth consecutive day today amid a broad sell-off in financial markets. The Nifty and the Sensex ended the day down around 3.5% each.

The Indian rupee hit a 6-month low against the US dollar during the day.

Today's sharp fall in stocks is the worst since the beginning of the coronavirus scare that has affected financial markets across the globe.

3:15 PM

IMF, Pak. govt reach agreement on second review of $6 billion bailout package

The International Monetary Fund (IMF) has said it has reached a staff-level agreement with the Pakistani authorities “on policies and reforms” needed to complete the second review of the $6 billion loan approved for the cash-strapped country to help its fragile economy, a media report said on Friday.

In July last year, the International Monetary Fund’s (IMF) Executive Board “approved a 39-month extended arrangement” under the Extended Fund Facility (EFF) for Pakistan for $6 billion to support its economic reform programme.

Pakistan’s Finance Ministry approached the IMF in August 2018 for a bailout package when the Imran Khan government took over.

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3:00 PM

DGTR recommends antidumping duty on aluminium, zinc coated items from 3 nations

The commerce ministry’s dumping probe arm DGTR has recommended antidumping duty on aluminium and zinc coated flat products from China, Vietnam and Korea to guard domestic players from cheap imports, according to a notification.

It has recommended duty in the range of USD 14.3-173.1 per tonne on the imports.

“Antidumping duty is recommended to be imposed...on all imports of subject goods originating in or exported from these countries,” the Directorate General of Trade Remedies (DGTR) said in a notification.

After completing the probe into the alleged dumping, the directorate concluded that aluminium and zinc coated flat products have been exported to India from these three countries below its normal value, which has resulted in dumping.

“The domestic industry has suffered material injury due to dumping,” it added. PTI

2:45 PM

Indian shares set for worst week in four years as pandemic worries escalate

Indian shares tumbled 3% on Friday, on track for their worst week in four years, as global markets fell on growing fears that the coronavirus outbreak could turn into a pandemic and derail growth.

Asia's third largest economy is scheduled to release December quarter growth data later in the day, but analysts said fears from the outbreak were over-riding any possible relief.

The broader NSE Nifty 50 index fell 3% to 11,284.85 by 0558 GMT and the benchmark S&P BSE Sensex also declined 3% to 38,577.

Both indexes have shed over 6% so far this week, on track for their worst week since Feb. 12, 2016.

The Indian rupee was trading 0.43% weaker at 71.9475 per dollar, while the benchmark 10-year bond yield stood at 6.3875% as of 0600 GMT. Reuters

2:30 PM

Union Bank sells stake in NSE for Rs 104 crore

Union Bank of India on Friday said it has sold 0.21 per cent stake in NSE for a cash consideration of over Rs 104 crore.

The stake equivalent to 10,21,250 equity shares has been sold at Rs 1,020 per equity share.

“The bank has executed a share purchase agreement for sale of its equity stake of 0.206 per cent in National Stock Exchange,” it said in a regulatory filing.

Stock of the lender traded at Rs 38.70, down 4.33 per cent from its previous close. PTI

2:15 PM

AGR woes: No decision on relief to telcos at DCC meet

The crucial meeting of Digital Communications Commission (DCC) on Friday could not arrive at a decision on relief to the distressed telecom sector and more details are required for reconciliation of AGR data, sources said.

The DCC meeting lasted two hours and is expected to meet again in coming days, the sources said.

The telecom department officials continue to maintain that the meeting did not focus on AGR issues but on project implementation for PPP on Bharat Net project.

It is learnt that no decision on telecom relief could be taken at the meeting.

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2:00 PM

Opinion: Indian markets will resist jolt from riots

by Una Galani

India's markets are proving surprisingly resilient. Ugly clashes in Delhi between Hindus and minority Muslims have left at least 32 people dead and hundreds wounded. The violence broke out at a time when the domestic economy is slowing and global money managers are jittery about the risk of a pandemic. Still, the worlds fifth-largest economy is surprisingly alluring to foreign money.

Overseas investors are pulling money out of emerging markets and have turned sellers of equities in Brazil, South Korea, Taiwan and more, according to Macquarie. Indias NSE Nifty 50 has also started to fall this week as investors have sought safe havens. Nevertheless, the country managed to attract net foreign inflows this month. That's despite rich valuations with the IBES MSCI India trading at 18.5 times forward earnings, compared with 12.7 times for the IBES MSCI Emerging Markets.

Such enthusiasm jars with economic realities. New investments are in short supply, vehicle sales are falling, and corporate profits have been disappointing. That disconnect is exacerbated by rolling television coverage of mobs in Delhi beating each other with rods and sticks during and after the state-visit of U.S. President Donald Trump.

Foreign buyers, and domestic ones that continue to pour savings into the market, are so far looking beyond both. India is going through a harsh period as its economy undergoes some disruptive changes. The introduction of a bankruptcy code, policies like the goods and services tax, and tax cuts are helping a few large companies including HDFC Bank, Reliance Industries, and Asian Paints consolidate market share at the expense of less well-run rivals, especially small- and medium-sized businesses.

The resulting downward pressure on incomes and job losses only fuel the risk of social problems, especially when paired with nationalist politics in a country with a history of religious violence. But India has relatively strong growth, a huge home market, and record foreign exchange reserves. Foreign investors are therefore unlikely to lose their nerve unless there is a much bigger shock or any sure sign that the slowdown will be long lasting. Reuters

1:45 PM

Microsoft withdraws from GDC gaming conference over CoV

After Facebook cancelled its prestigious F8 Developer Conference in San Jose in May, Microsoft has now announced it will skip the Game Developers’ Conference (GDC) scheduled to be held here from March 16 to 20, owing to the coronavirus concerns.

“After a close review of guidance by global health authorities and out of an abundance of caution, we’ve made the difficult decision to withdraw from participating at Game Developers Conference 2020 in San Francisco,” the company said on its Game Stack Blog on Thursday.

“The health and safety of players, developers, employees, and our partners around the world is our top priority. Especially as the world is experiencing growing public health risks associated with coronavirus (COVID-19),” Microsoft added.

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1:30 PM

Rupee hits 6-month low against the US dollar following massive sell-off in equity

Piyush Pandey reports:

The rupee hit a six month low against the dollar on Friday amid massive sell off in equities which pulled down the Sensex close to 1300 points.

The sell off in equities comes on the back of  concerns that Corona virus is spreading across many geographies.

After opening 38 paise lower, at 71.93 as compared to previous close of 71.55, the rupee hit days low of 72.27 before recovering to 72.10 in afternoon deals.

1:15 PM

Market selloff: 1,767 stocks turn red, 274 defy trend on BSE

More than 1,700 BSE-listed stocks, mostly from the mid-cap and small-cap space, witnessed heavy selloff on Friday, as equity markets crashed amid rising fears of the coronavirus outbreak turning into a pandemic.

As many as 323 shares on the bourse from Group A, B, T and Group Z, dropped to their 52-week low levels.

While, a total of 205 companies on BSE saw their share prices touching their lowest permissible level for the day.

However, as many as 274 stocks defied the broader market trend and were trading in the positive territory, while 57 stocks breached the upper circuit limit.

As many as 24 stocks touched their one-year highs, even as the broader market sentiment remained sluggish amid tremendous selling pressure. PTI

1:00 PM

Coronavirus spread to impact India’s auto component industry, says body

The supply restrictions from China caused by the spread of coronavirus, which have started adversely affecting the Indian automobile industry, is likely to have a negative impact on the automotive component and forging industries in India shortly, an industry association has said.

China accounts for 27% of India’s automotive component imports and, this year, vehicle demand in the country is projected to decline by 8.3%, the association added.

S. Muralishankar, president, Association of Indian Forging Industry (AIFI), said, “The Coronavirus is expected to have an impact on the Indian automotive industry and hence also on the automobile component and forging industries, which had already reduced their production rate due to the market conditions and on account of the impending change over to BS-VI emission norms from BS-IV from the April 1, 2020.”

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12:40 PM

Sectoral indices plunge over 6% amid equity rout

All BSE sectoral indices witnessed losses on Friday amid intense equity selloff on domestic bourses as investors across the globe turned increasingly fearful of the adverse impact of coronavirus on world markets.

BSE metal index was the top laggard, cracking up to 6.04 per cent, followed by IT, basic materials, teck, industrials, realty, capital goods, energy, auto and finance indices falling up to 3.96 per cent.

Oil and gas, bankex, telecom, consumer durables and FMCG indices were also trading with losses. PTI

12:30 PM

Measures taken by Indian govt. will boost economic growth: SBI MD Dinesh Khara

Slowdown in the Indian economy has bottomed out and measures taken by the government in the recent budget to improve capacity to spend in rural sector, infrastructure creation and inviting foreign investments will boost growth, State Bank of India Managing Director Dinesh Khara has said.

Khara told PTI here that for India to achieve its ambition of becoming a five trillion dollar economy, it required a 10-11%growth rate.

India’s economic growth slipped to hit an over six-year low of 4.5% in July-September 2019.

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12:20 PM

US confirms 2.3% economic growth in 2019

The US government has confirmed that the national economy grew by 2.3 per cent in 2019, a modest rate that is far below of what President Donald Trump had promised and which was now in danger from the coronavirus outbreak that has already led to significant losses across the world stock markets.

According to the second of three estimates about the evolution of the US GDP, the country’s economy — which began 2019 with growth of about 3 per cent — ended the year with quarterly growth of 2.1 per cent, confirming a decelerating trend that is predicted to become more pronounced in 2020, Efe news quoted the government as saying on Thursday.

This economic growth, in addition, has been the lowest registered in the US since Trump entered the White House in January 2017, after promising to keep the economy growing at between 3 and 4 per cent during his term. Reuters

12:10 PM

Apollo Tyres capex to skid on slowdown

Apollo Tyres Ltd. (ATL) has decided to scale down its capital expenditure (capex) for FY21 by ₹300-400 crore due to prolonged economic slowdown.

“We started the year with an estimated capex of ₹2,700 crore and that has been scaled back to ₹2,400 crore. In the last nine months, we had invested ₹2,000 crore,” said Gaurav Kumar, chief financial officer,ATL, in an earnings call.

“For the next year, the number should be in the range of ₹1,400-₹1,500 crore, from the earlier plan of ₹1,700-1800 crore,” he said.

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12:00 PM

Aviation stocks plunge up to 10% on coronavirus jitters

Shares of airline companies plunged up to 10 per cent on Friday as rating agency Icra said the outlook for the aviation sector remains negative in the wake of coronavirus outbreak.

Shares of Interglobe Aviation - the parent of IndiGo - plunged 9.99 per cent to Rs 1,229.75 on the BSE.

Spicejet stock cracked 6.06 per cent to a low of Rs 82.10.

Defunct airline Jet Airways (India) hit its lower price band losing 4.84 per cent at Rs 24.55.

According to rating agency Icra, the outlook for India’s aviation industry remains negative in the wake of coronavirus outbreak, which has resulted in many international passengers cancelling their travel to South East Asian countries. PTI

11:45 AM

Facebook cancels in-person F8 event on COVID-19 concerns

Social networking giant Facebook cancelled its in-person annual developer conference on Thursday on growing concerns over COVID-19 outbreak.

F8, Facebook's annual developer event, brings together creators and innovators from around the world who build products surrounding the social media firm's ecosystem. The event was scheduled on May 5th and 6th in San Jose, California.

"This was a tough call to make. But we need to prioritise the health and safety of our developer partners, employees and everyone who helps put F8 on," the company said in a statement.

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11:30 AM

Bloodbath on Dalal Street erodes nearly Rs 5 lakh crore investor wealth

Domestic investor wealth plummeted by nearly Rs 5 lakh crore on Friday as equity markets crashed tracking global equity selloff amid rising uncertainty over the economic impact of coronavirus outbreak.

Market capitalisation (m-cap) of BSE-listed companies saw a massive decline after the 30-share index sank 1,100.27 points, or 2.77 per cent, to 38,645.39, and the NSE Nifty cracked 329.50 points, or 2.83 per cent, to 11,303.80.

The carnage in the equity market wiped out investor wealth worth Rs 4,65,915.58 crore, taking the total m-cap to Rs 1,47,74,108.50 crore on the BSE.

The m-cap of BSE-listed companies stood at Rs 1,52,40,024.08 crore at the end of trading on Thursday. PTI

11:15 AM

IndusInd Bank appoints Sumant Kathpalia as MD & CEO

The Reserve Bank of India (RBI) has approved the appointment of Sumant Kathpalia as MD & CEO of IndusInd Bank for three years with effect from March 24, 2020. Mr. Kathpalia heads the consumer banking business at the private sector lender.

“The bank has received a communication from the RBI today, approving the appointment of Mr. Sumant Kathpalia, who currently heads the Bank’s Consumer Banking business, as its Managing Director & CEO for 3 years, with effect fiom March 24, 2020,” the bank said in filing to the exchanges.

Mr. Kathpalia replaces Ramesh Sobti, who will retire as he attains the age of 70. RBI guidelines allow a person to be the MD & CEO of the private bank till the age of 70.

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11:00 AM

Rupee slips 33 paise to 71.94 against US dollar in early trade

The Indian rupee opened on a weak note and declined by 33 paise against the US dollar in opening trade on Friday, tracking heavy selling in domestic equities and sustained foreign fund outflows.

Forex traders said market participants were cautious after the benchmark 30-share sensitive index, Sensex, plummeted 1,083.85 points to 38,661.81 in opening session amid global selloff.

At the interbank foreign exchange the rupee opened at 71.90 then lost further ground and touched a low of 71.94 against the American currency, registering a fall of 33 paise over its previous close.

The domestic unit had settled at 71.61 against the US dollar on Thursday. PTI

10:45 AM

Fund houses should build buffer, says SEBI

The Securities and Exchange Board of India (SEBI) has suggested that asset management companies (AMCs) should keep a buffer of liquidity, especially for overnight funds and liquid funds, to deal with stress situations.

Speaking at a mutual fund conference, SEBI whole-time member G. Mahalingam said that while the regulator had nudged the industry to maintain a minimum buffer, fund houses should gauge the liquidity pressure in a stress situation and build a buffer across maturities.

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10:30 AM

Vodafone Idea seeks Rs 35 per GB as minimum floor price

Vodafone Idea has sought fixing minimum tariffs for mobile data at Rs 35 per GB, which is about 7 time the current rate, and for calls at 6 paise per minute along with monthly charges from April 1, to help it pay statutory dues.

Struggling to clear adjusted gross revenue dues of Rs 53,000 crore to comply with a Supreme Court order, the loss—making telco has sought 18 years time to clear the dues, including a three—year moratorium on payment of interest and penalty, according to official sources.

In a letter to the Department of Telecommunications, the company said it wants minimum price of data should be fixed at Rs 35 per gigabyte and minimum monthly connection charge at Rs 50 from April 1, 2020. Current mobile internet prices are in the range of Rs 4—5 per GB. IANS

10:15 AM

Bank credit growth slips to 6.4%

Banks’ credit growth slipped to 6.4% on year-on-year basis till the fortnight ended February 14, latest data released by Reserve Bank of India (RBI) showed.

Loan growth failed to maintain the momentum of the previous fortnight when it grew by ₹98,926 crore (for the fortnight ended January 31).

There was a contraction of ₹64,490 crore during the fortnight ended February 14.

Year-on-year loan growth till the previous fortnight was 7.1%.

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10:00 AM

Not sure if ease of doing business improved with ranking, says Damodaran

The ‘Ease of Doing Business’ rankings can go up by focusing on select parameters which are evaluated by the World Bank, former Sebi chairman M Damodaran said on Thursday, doubting if the progress in the list has made it easy for enterprises to operate.

He also went public with his criticism on recent statements by Finance Minister Nirmala Sitharaman who reportedly asked bankers to work on relationships.

The country’s ranking on Ease of Doing Business (EDB) ranking moved up to 63 for 2019 from the 77th in the year-ago period and 142nd when Narendra Modi came to power in 2014.

“We have improved on rankings, has ease of doing business improved I’m not so sure,” Damodaran said, speaking at an event organised by industry lobby CII here. PTI

9:45 AM

US stocks drop more than 4.0%, extending rout amid virus fears

Wall Street stocks were pummeled again Thursday as the further spread of the coronavirus exacerbated fears of a global slowdown and raised the risk of a US recession.

The Dow Jones Industrial Average plunged nearly 1,200 points or 4.4 percent, to finish at 25,766.64, its worst session in more than two years.

The broad-based S&P 500 also slumped 4.4 percent to 2,978.76, its first close below 3,000 since October. And the tech-rich Nasdaq Composite Index shed 4.6 percent to end at 8,566.48.

The losses set Wall Street on pace for its worst week since the 2008 financial crisis, as investors continued to flee equities into safer investments like US Treasuries and gold.

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9:35 AM

Sensex drops almost 1,000 points as coronavirus fears spread

Ashish Rukhaiyar reports from Mumbai:

Global equities came under heavy selling pressure on Friday with the benchmark Sensex shedding nearly 1,000 points in the first few minutes of the session.

Investors world over are shunning risky assets including stocks amidst growing concern related to the spread of coronavirus. It is believed that corporates would take a massive hit in their earnings due to the global outbreak.

At 9:30, the Sensex was down 975 points or 2.45% at 38,770.62. The broader Nifty was trading at 11,339, down 294 points or 2.53%.

Most of the leading equity benchmarks in Asia also lost significant ground with Japan's Nikkei also shedding over 900 points or 4.19%. Hang Seng was also down nearly 3%. The benchmarks in China and Indonesia also lost over 3% while the overnight Dow was down nearly 1,200 points.

9:30 AM

Not in favour of big bang but gradual reforms: Montek

Former Planning Commission vice chairman Montek Singh Ahluwalia on Thursday said he is in favour of gradual reforms in a phased manner instead of big-bang reforms.

The last vice chairman of erstwhile avtar of NITI Aayog advised the government that it should not move towards protectionism by raising customs duty and other measures.

In Indian context, he said the gradualism approach has worked reasonably well except it has taken too long.

“I have never been in favour of big-bang reforms. They have never worked. Gradualism is something that is not going to be done instantly but spread over a period of time with phased transition,” he said during discussion over his book ‘Backstage’ organised by the Centre for Policy Research here.

Citing example of 1991 reforms, he said reforms in a phased manner were followed more or less in taxation, reducing import duties, on bringing in the first round of regulation in the financial system etc. PTI

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