Today’s agenda:
China’s Evergrande Group has supplied funds to pay interest on a dollar bond. The payment will bring some relief to investors and regulators worried about the wider fallout from a messy default and contagion hitting global financial markets elsewhere. Japan’s Nikkei rose on Evergrande’s debt payment, recouping early losses.
Oil prices will stay on our radar as they resumed their climb on Friday on continued tightness in U.S. supply. Brent crude futures climbed 24 cents, or 0.3%, to $84.85 a barrel.
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In India, the Union Cabinet on Thursday approved PM GatiShakti National Master Plan, including implementation, monitoring and support mechanism, for providing multi-modal connectivity. Petrol and diesel prices were hiked again on on Thursday by 35 paise per litre each.
Capital markets regulator Sebi has asked investment advisers to refrain from dealing in digital gold, an unregulated financial product.
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Sensex, Nifty fall at market close
Equity indices Sensex and Nifty declined at market close today, dragged by losses in ITC, Maruti and Infosys.
BSE Sensex fell 0.17% to 60,821.62, while NSE Nifty dropped 0.35% to 18,114.90.
The rupee slipped 3 paise to close at 74.90 against the U.S. dollar. Separately, gold rose ₹158 to ₹46,677 per 10 grams.
Yes Bank Q2 profit jumps 74%
Yes Bank’s net profit for the September-ended quarter surged 74%, helped by improvement in gross bad loans ratio.
Gross bad loans fell to 14.9% of the gross advances, down from 16.9% in the year-ago period. However, net bad loans rose to 5.55% from 4.71%.
The private lender was taken over by the State Bank of India last year, following a collapse of the management and increase in stressed assets.
The bank’s CEO and MD Prashant Kumar said loan growth momentum has picked up and expects recoveries and provisions write-back to keep credit costs under check.
HDFC Life Q2 net profit drops 16%
HDFC Life’s second-quarter net profit fell 16% to ₹275.91 crore on account of higher claims due to the COVID-19 pandemic.
New business margin expanded by 130 bps to 26.4% for the first half of the fiscal, up from 25.1% last year.
The company’s shares fell 1.45% from the previous close.
IOC expects 100% refinery run as fuel demand returns
Indian Oil Corp (IOC) said it expects refinery run to reach 100% within a quarter as fuel demand returns.
The country’s largest oil firm’s refineries operated at 82% capacity in September and are above 90% this month, according to Chairman S M Vaidya.
India’s energy demand had halved after a nationwide lockdown as imposed in March last year. Economic activity has now rebounded with the gradual easing of restitutions.
Siemens acquires 26% equity in Sunsole Renewables
Siemens Ltd has agreed to subscribe 26% paid up equity share capital of Sunsole Renewables for ₹1.6 crore.
The move will help Siemens reduce its carbon footprint and procure solar power plans for its manufacturing facility in Kalwa.
Nykaa acquires stake in skincare brand Dot & Key
Online retail company Nykaa has acquired a majority stake in homegrown skincare brand Dot & Key, just days ahead of its ₹5,200-crore initial public offering.
The company’s red herring prospectus shows it purchased 3,35,000 equity shares from existing shareholders of Dot & Key for about ₹46.9 crore. It further subscribed 3,57,143 shares for a consideration of ₹50 crore.
The move is Nykaa’s first direct-to-consumer beauty brand acquisition, helping the beauty and e-commerce platform further expand into skincare, personal care and nutraceuticals offerings.
Protection of customer interest non-negotiable: RBI Deputy Governor
RBI Deputy Governor M Rajeshwar Rao today emphasised on the need to create a culture of responsible governance in the NBFC sector, and urged shadow banking players to give importance to protection of customers.
This comes after the central banks continues to be inundated with complaints of harsh recovery practices, breach of data privacy, increasing fraudulent transactions and excessive interest rates and harassment with respect to NBFCs.
U.S. regulators to unveil plans to tackle financial risks from climate change
A U.S. regulatory panel will unveil recommendations for ensuring the financial system can withstand the risks posed by climate change. The move will ultimately lead to new rules and stricter oversight in Wall Street.
The report by Financial Stability Oversight Council comprises the heads of the top financial agencies and is chaired by the treasury secretary, is part of President Joe Biden’s aggressive plan to tackle climate change.
Nissan cuts planned output in Oct-Nov
Automaker Nissan is slashing its planned global production output for October and November by 30%, as it struggles with the shortage of semiconductors.
The Japanese automaker has informed suppliers that it will build a total of 5,83,000 cars during the two-month period, according to Nikkei business daily.
Biocon Q2 net profit dips 18%
Biotechnology company Biocon’s second-quarter net profit fell 18% to ₹138 crore, hurt by operational and supply challenges in the previous quarter.
Revenue from operations increased 5% to ₹1,840 crore from ₹1,750 crore last year.
The company’s Executive Chairperson Kiran Mazumdar-Shaw noted the waning pandemic and improvements in supply chain conditions are likely to help the Generics, Biosimilars and Research services segments toward sustained growth in the second half of 2022.
Nykaa IPO to open for subscription on Oct. 28
Online retail company Nykaa’s initial share sale is set to open for public subscription on October 28 . The three-day initial public offering will conclude on November 1, according to the red herring prospectus.
The company received SEBI’s approval for the share sale on October 11.
China’s coal output surge to reach record levels
China’s new coal output rate puts it on pace to produce more than it has ever produced, if the increase is sustained, according to a Reuters report.
The surge in coal output comes as the country faces an energy crisis, and just days before world leaders meet in Glasgow for the UN COP26 summit on climate change - accelerated by the large emissions caused by burning coal and other dirty fuels.
SIAC rejects Future Retail's plea
The Singapore International Arbitration Centre has declined Future Retail’s plea to lift the interim stay on its ₹24,713-crore deal with Reliance Retail.
The Singapore-based arbitrator decided that Future Retail is a party to the ongoing arbitration between Amazon and Future group in the dispute over the sale of its assets to Reliance Retail.
Amazon is trying to block the sale of Future’s assets and has alleged that the deal breaches its own pact of 2019 with the Kishore Biyani-led company.
Oil prices drop
Oil prices dropped as demand for oil products in power generation cooled off amid easing coal and gas prices. Brent crude futures fell 0.6%, to $84.13 a barrel, while U.S. WTI crude futures slid 0.5%, to $82.13 a barrel.
Brent hit a three-year high of $86.10 yesterday, but was on track to slip 0.8% in the week, the first weekly dip since September 3.
Earlier this week, the oil market touched multi-year highs on worries about coal and gas shortages in China, India and Europe, which spurred fuel-switching to diesel and fuel oil for power.
Petrol, diesel prices hiked for third straight day
Petrol and diesel prices in the country were hiked again by 35 paise per litre each. The third consecutive hike takes the fuel prices to an all-time high across the country. In Delhi, Petrol is now sold at ₹106.89 per litre, and diesel at ₹95.62 a litre, both prices touching record high levels.
While petrol has already hit the ₹100-a-litre mark or more in all major cities of the country, diesel has touched that level in over a dozen states.
Since September last week, price of diesel and petrol have risen by ₹7 and ₹5.7 respectively, per litre.
Rupee rises against U.S. dollar
The Indian rupee appreciated against the U.S. dollar after ending on a flat note yesterday. The domestic unit opened at 74.82 against the dollar, then edged higher to 74.79, registering a rise of 8 paise over its previous close. The Indian currency is buoyed by a positive trend in domestic equities.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.05% to 93.72.
Bitcoin falls
Bitcoin fell today after hitting its all-time high on Wednesday following the launch of the first U.S. bitcoin futures exchange-traded fund. The world’s largest cryptocurrency last dropped 4.68% to $62,904.60, but demand for bitcoin has increased.
Some analysts at major banks, including J.P. Morgan voiced doubt over how long-lasting the boost to bitcoin prices would be.
U.S. slows down oil and gas mergers
U.S. antitrust regulators have started scrutinising oil and gas mergers and acquisitions in an attempt to tackle skyrocketing energy prices amid increasing pressure on policymakers.
The regulators have slowed down the approval process for at least five oil and gas deals. The Federal Trade Commission is subjecting more deals to so-called second requests, seeking additional information and documents, the deal advisers said and the filings show.
Among the proposed transactions that received second requests in September were HollyFrontier Corp’s $2.6 billion purchase of Sinclair Oil and Vertex Energy Inc's $140 million sale of motor oil collection and recycling assets to Safety-Kleen Systems Inc, the regulatory filings show.
China Evergrande averts default
The debt-ridden China Evergrande Group has managed to make interest payment on its $83.5 million bond before October 23, the deadline for the 30-day grace period on its September 23 coupon.
The property developer with over $300 billion debt averted a default with this payment. It has missed two other coupon payments which were due on September 29 and October 11, and non-payment of interest for 30 days on these coupons would result in a formal default.
Evergrande’s dollar bond prices surged, with its April 2022 and 2023 notes jumping more than 10%, according to Duration Finance.
Asian markets update | Sensex opens
Indian indices opened higher after closing on a weak note yesterday. The Sensex opened at 61,044.54 up 121.04 points after plunging 0.55% in the previous session. Similarly, the Nifty opened at 18,230.70, up 52.6 points after dropping 0.48% yesterday.
Major Asian stock indices rose in the morning trade, as the debt-laden China Evergrande Group sent funds for a $83.5 million bond interest payment before the October 23 deadline, averting a default.
Evergrande’s shares in Hong Kong rose 5.04%, while Hong Kong’s Hang Seng gained 0.36%. Chinese blue chips gained 0.3%, with the CSI300 Real Estate Index rising 2.5%.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.1%. Japan’s Nikkei rose 0.64% and Topix advanced 0.32%. South Korea’s Kospi dipped 0.04%.
In U.S., the S&P 500 rose 0.30% to a new record closing high of 4,549.78, the Nasdaq Composite also surged 0.62% to 15,215.70, while the Dow Jones Industrial Average fell 0.02% to close at 35,603.08.
---- Edited by John Xavier
(With inputs from Reuters, PTI and other news agencies.)