Top business news of the day: Coal India scales up; ICRA slashes growth forecast for auto components and more

Bombay Stock Exchange (BSE) in Mumbai. File   | Photo Credit: PTI

Evening wrap:

Global energy prices continued to trend up, putting pressure on consumer spending. Oil prices soared again as supply restraint from major producers during an energy crisis gave a blow to major economies.


In India, price of diesel went up for the seventh consecutive day today. In Kerala and Karnataka, the fuel’s price crossed the ₹100-per-litre for the first time today. Rupee fell against the U.S. dollar as rising crude prices and strength of the American currency in the overseas market weighed on the domestic unit.


In other developments, ICRA cut growth forecast for auto components industry by 300 basis points to 17-20%. And TCS shares tanked 7% after the software firm missed its earnings expectations. – John Xavier


For more updates on economy, business and finance, please read our blog

6:28 P.M.

U.S., EU line up over 20 more countries for global methane pact

Two dozen countries have joined a U.S.- and EU-led effort to slash methane emissions by 30% by 2030. Methane is a greenhouse gas, and the biggest cause for climate change after carbon dioxide (CO2). Several reports have highlighted the need for governments to crack down on methane to limit the rise of global warming at 1.5 degrees C, the goal of the Paris climate agreement.

A United Nations report released in August said "strong, rapid and sustained reductions" in methane emissions, in addition to slashing CO2 emissions, could have an immediate impact on the climate.

6:05 P.M.

Evergrande effect | Fantasia limits bond trading

Cash-strapped Chinese property developer Fantasia Holdings limited is trading in its Shanghai bonds. The move is seen to be aimed at curbing volatility before default following a credit downgrade.

Modern Land (China) Co, a smaller developer, was seeking investors' consent to extend the maturity date of a dollar bond due on Oct. 25 by three months to avoid a default. The measures taken by both companies highlight the fallout from China Evergrande Group, struggling under $305 billion in debt.

6:04 P.M.

China | More power shortages

The largest provincial economy in China's northeast rust-belt warned of power shortages worsening despite government efforts to boost coal supply and manage electricity use in a post-pandemic energy crisis hitting multiple countries.

The energy crisis in the world's second largest-economy and top exporter is expected to last till the end of the year. Analysts and traders are forecasting a 12% drop in industrial power consumption in the fourth quarter due to a shortage in coal supply during the winter.

4:42 P.M.

2021 Nobel economics prize

Economists David Card, Joshua Angrist and Guido Imbens won the 2021 Nobel economics prize, the Royal Swedish Academy of Sciences. 

Card took half the prize "for his empirical contributions to labour economics". Angrist and Imbens shared the other half "for their methodological contributions to the analysis of causal relationships". The winners will share a sum of $1.14 million.

4:41 P.M.

Coal India scales up

Coal India has scaled up supplies to 1.51 million tonnes (MT) per day in the past four days to power utilities across the country to address power shortage. . The average supplies to the coal-fired power plants during October so far has been 1.43 MT per day. It is also building adequate logistics to transport the dry fuel.

4:39 P.M.

Indian shares ride high

Sensex rose 0.13% to end at a record closing high of 60,136, tracking gains in HDFC Bank, ICICI Bank and ITC. The Nifty rose 0.28% to its all-time closing high of 17,945.95.

Maruti was the top gainer in the Sensex pack, followed by PowerGrid, ITC, NTPC, SBI, M&M, Kotak Bank and HDFC Bank. TCS slipped 7% after the company’s September quarter earnings missed street expectations.

4:13 P.M.

Finance Ministry releases ₹9,871 crore grant

The Finance Ministry has released ₹9,871 crore to 17 states as grant to meet their revenue deficit.

Eligible states as recommended by the 15th Finance Commission include Andhra Pradesh, Assam, Haryana, Himachal Pradesh, Karnataka, Kerala, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Rajasthan, Sikkim, Tamil Nadu, Tripura, Uttarakhand and West Bengal.

3:58 P.M.

ICRA slashes growth forecast for auto components

Ratings agency ICRA has cut growth forecast for auto components industry for the current fiscal. The agency estimates the industry to grow 17-20% in 2021-22 as result of low base and higher commodity prices.

The agency noted that semiconductor shortage may weigh on exports revenues. The forecast was reduced by 300 basis points.

3:52 P.M.

Diesel price hiked again

Diesel price was hiked for the seventh consecutive day amid firming international oil prices. The increase drove up fuel prices to a new record. With the hike, diesel costs ₹101.03 a litre in Mumbai, and ₹93.17 in Delhi. In Kerala and Karnataka, the fuel’s price crossed the ₹100-per-litre for the first time today.

3:09 P.M.

TCS shares tank 

Tata Consultancy Services (TCS) shares tumbled 7% to ₹ 3,660 on the BSE after the company's September quarter earnings missed market expectations. 

TCS consolidated net profit climbed to ₹9,624 crore in the September quarter rising 14.1% from the same time in the previous year, aided by broad-based growth across geographies and verticals. Its revenue rose to ₹46,867 crore for the September quarter growing 16.7% from the same time in the previous year.

2:49 P.M.

Indian economy on path to swift recovery: Finance Ministry report 

India is on the path to swift recovery, boosted by strategic reforms and rapid vaccination drives, according to the Finance Ministry's Monthly Economic Review.

Sustained growth in agriculture, sharp rebound in manufacturing and industry, resumption of services activity and buoyant revenues indicate the economy is progressing well, the September review said.

With restoration of supply chains, improved mobility, and softening food inflation, consumer price index (CPI) inflation retreated to a four month-low of 5.3% in August 2021.

2:30 P.M.

Explainer on Invesco's battle with Zee

Zee Entertainment is locked in a legal battle with Invesco after it called for the removal of Zee's current CEO Punit Goenka. 


Invesco had asked Zee to call "extraordinary general meeting" to consider its demand to remove Goenka and appoint six new independent board members in light of corporate governance and financial irregularities. 


Zee rejected Invesco's request citing legal infirmities. Following this, Invesco took to National Company Law Tribunal (NCLT) calling Zee's behaviour oppressive. Zee has been given two weeks to respond. 

12:05 P.M.

Crude jumps on global energy crunch

Oil prices soared again as supply restraint from major producers during an energy crisis gave a blow to major economies.

Brent crude rose or 1.5% to $83.59 a barrel.  U.S. oil also soared 1.9% to $80.86 a barrel, after rising 4.6% through Friday. 

Coal and gas prices have also been surging. In India, some states such as Punjab, Kerala, Rajasthan and Tamil Nadu might experience blackouts and electricity cuts due to coal shortage. In China, the government ordered miners to ramp up coal production as power prices surge.

11:20 A.M.

Rupee slumps against US dollar

The Indian rupee fell 17 paise to 75.16 against the U.S. dollar in opening trade today after settling for 74.99 on Friday. The rising crude prices and strength of the American currency in the overseas market is weighing on the domestic unit.

At the interbank foreign exchange, the rupee opened on a weak note at 75.11, before falling further to 75.16, a decline of 17 paise from the last close. While the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.08% to 94.13.

11:00 A.M.

Reliance doubles down on renewables

Reliance is upping its efforts to become net carbon zero by 2035. The owner of the world's biggest refining complex said on Sunday it will buy Norwegian-headquartered solar panel maker REC Solar Holdings for $771 million,  and take up to 40% stake in India's Sterling and Wilson Solar through Reliance New Energy Solar Ltd (RNESL), a wholly owned subsidiary of Reliance Industries Ltd (RIL).

The acquisition comes after Reliance said in June it would invest $10.1 billion in clean energy over the next three years.

Buying REC Solar will help Reliance expand in Australia, Europe, and the United States, according to billionaire Mukesh Ambani.

As the discussions around global warming take centre stage, fossil fuel firms are facing pressure form investors and activists to reduce carbon footprint. Major oil companies including Royal Dutch Shell Plc and BP Plc aim to become net zero-carbon firms by 2050.

10:15 A.M.

Global Minimum tax deal

Over 130 countries have joined hands to make it harder for big com

panies to avoid taxation. In an agreement overseen by the Organization for Economic Cooperation and Development, a global minimum tax of 15% would be levied on large multinationals such as Apple, Google and Facebook.

The goal is to urge big companies to pay taxes in countries where they earn income. The move is the first such step in almost a century after the double tax avoidance convention.

The discussion to put in place international tax rules had been ongoing for a past few years. Firms usually shift their profits to low tax tax jurisdiction countries. But COVID-19 pandemic and need to improve tax revenues accelerated the talks.

The tax agreement will come into affect starting 2023.

9:25 A.M.

Asian markets | Sensex update

Indian benchmark equity indices started the week on a lower note amid mixed global cues. At 9:17 IST, the Sensex was down 0.17% at 59958.81 and the Nifty was down 0.13% at 17872.

Asian shares rise, extending last week's run, Technology shares rallied in Japan and China. Japan's Topix rose 1.4% in early trade. Hong Kong’s Hang Seng Index rose 2%. China’s Shanghai Composite Index also added 0.3%

Japanese shares rose after Prime Minister Fumio Kishida said he wasn't considering changes to the country's capital-gains tax while Chinese tech stocks rose on easing concerns about Beijing’s crackdown on internet platforms.

Australia was a contrarian as Down Under's S&P/ASX 200 fell 0.6% today.


Today's agenda:

Global energy prices are sky-high. Crude oil is at a seven-year high. The surge catapulted Saudi Aramco into the $2 trillion club last week. Prices of natural gas have also double in the last six months. And global carbon emission-reduction plans have had a negative effect on an already supply-constrained coal. The combination of these price rises could have impact on inflation, and damp consumer spending in the coming months.

This is evident in the surge in petrol, diesel and LPG prices. On Sunday, Diesel crossed ₹100-a-litre-mark in Gandhinagar and Leh. The price of petrol in Delhi rose to its highest-ever level of ₹104.14 a litre and ₹110.12 per litre in Mumbai.

On coal, Power Ministry’s data shows a nearly 2% dip in consumption, which could slightly improve the supply situation. Consumption dipped by 72 million units (MU) to 3,828 MU on October 9 compared to 3,900 MU on October 8. The Union government also termed fear of coal shortage as ‘misplaced’, confirming that there is currently 24-days of supply available.

Our blog will be tracking developments in energy markets. We’ll also track other developments, including the one  at the International Monetary Fund (IMF). The lender’s board will soon decide on the data-rigging allegations against its Managing Director Kristalina Georgieva. The 24-member board is looking to complete its review before it kicks off its annual meetings this week. Central bankers and finance ministers from across countries will attend IMF and World Bank’s events this week at Washington, D.C.  – John Xavier



----  Edited by John Xavier


(With inputs from Reuters, PTI and other news agencies.)

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Printable version | Dec 6, 2021 9:48:52 PM |

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