The Sensex and the Nifty have opened this morning on a negative note witnessing a correction from their all-time highs.
Join us as we follow the top business news through the day.
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Sensex snaps 5-day winning run, ends 144 pts lower
Stocks witnessed a modest correction today amid the broader bull run.
PTI reports: "Snapping its five-session winning run, equity benchmark Sensex ended 144 points lower on Thursday, tracking losses in index heavyweights HDFC twins, Reliance Industries and ICICI Bank.
The 30-share BSE index settled 143.62 points or 0.31 per cent lower at 45,959.88. The broader NSE Nifty fell 50.80 points or 0.38 per cent to 13,478.30.
UltraTech Cement was the top loser in the Sensex pack, shedding around 3 per cent, followed by M&M, HDFC Bank, IndusInd Bank, Axis Bank and Reliance Industries.
On the other hand, Nestle India, ITC, HUL and Kotak Bank were among the gainers.
According to traders, profit-booking emerged at higher levels, dragging benchmark indices lower.
The broader indices traded weak along with selling seen in basic materials, public sector and capital goods counters.
“During the afternoon session, markets scaled back from lows as traders took some relief from reports that the Asian Development Bank (ADB) raised the growth forecast for India in the current fiscal year to (-) 8 per cent from the (-) 9 per cent projection in September while keeping the outlook for the next fiscal year at 8 per cent,” said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi.
Elsewhere in Asia, bourses in Hong Kong, Seoul and Tokyo ended in the red, while Shanghai was in the positive territory.
Stock exchanges in Europe were also trading with gains in early deals.
Meanwhile, the global oil benchmark Brent crude futures rose 0.76 per cent to USD 49.23 per barrel."
Surge in broiler prices to offset COVID impact on poultry industry in FY21: Report
Some respite for the poultry industry.
PTI reports: "The sharp rise in broiler realisations will offset the impact of an estimated 20 per cent decline in volumes and expected to keep the poultry industry revenue flat this fiscal compared to 2019-20, according to a report.
The poultry industry will shake off the woes heaped by COVID-19 pandemic and post a better performance this fiscal because of higher realisations and lower input prices, leading to a 200 basis points (bps) improvement in operating profitability despite flattish revenue, Crisil Ratings said in a report.
Better profitability and modest capital spending will help improve credit profiles for the industry players, it added.
Wholesale prices of broiler chicken crashed to a low of around Rs 50 per kg in March from Rs 90 per kg in January due to fears over the spread of COVID-19 virus through poultry.
The unviable prices led to the culling of broiler birds, as costs were not being covered and the creation of a supply shock.
Thereafter, with fears of the virus not being spread through poultry abating and demand outpacing supplies, prices of broiler chicken surged more than 20 per cent to Rs 90-100 per kg on average in the first half of the current fiscal as against Rs 75-80 per kg last fiscal.
Supplies took time to catch up as poultry farms waited for the monsoon to get over, thereby inflating prices, the report said, adding that broiler prices are expected to average at Rs 100-105 per kg this fiscal.
The Crisil Ratings report further said the sharp improvement in broiler realisations will offset the impact of an estimated decline of 20 per cent in volumes this fiscal and as a result, industry revenues are expected to remain flat this year.
Even so, the poultry industry’s profitability will benefit from softer input prices in 2020-21, it noted.
The feed cost fell as maize production increased amid weaker demand from the poultry sector (which constitutes 65 per cent of demand for maize), hovering at Rs 15-16 per kg this fiscal compared to Rs 19-20 per kg last fiscal.
Lower feed costs and higher sales realisations will increase the profitability of players by at least 200 bps to over 7 per cent this financial year.
“We expect realisations to remain firm during the rest of this fiscal with the onset of festival demand in November. Even if average broiler prices decline to Rs 90 per kg in the fourth quarter, the improvement in profitability should hold given prices should still be higher on-year and feed cost remains subdued,” Crisil Ratings director Dinesh Jain said.
Better profitability will help crank up cash accrual by 50 per cent this fiscal, which will support incremental working capital and Capex requirements, as per the report.
Therefore, the capital structure of the industry is expected to strengthen with improvement in total outside liabilities to less than 0.9 times in 2020-21 from 1.16 times in FY20, the agency said.
“The credit outlook for India’s poultry industry remains positive despite the pandemic aftermath. Debt protection indicators like net cash accrual to term-debt repayments and interest coverage are expected to improve to 4.5 times and 7 times this fiscal from 2.9 times and 4 times in 2019-20,” Crisil Ratings associate director Jayashree Nandakumar said."
Nokia ties up with Voda Idea to offer tech solutions for enterprises
Nokia continues its foray back into the Indian market.
PTI reports: "Telecom gear maker Nokia on Thursday said it has partnered with Vodafone Idea Ltd (VIL) to offer technology solutions to the latter’s enterprise division customers. Under the collaboration, Nokia will offer fixed wireless and private wireless technology solutions to VIL’s enterprise division customers.
“As organizations embark on their digital journey, Vi Business is delighted to partner with Nokia to provide them with best-in-class IT and telecom infrastructure to grow their business.
“This association will combine the strengths of both companies to deliver new and exciting services to our enterprise customers, thus opening more opportunities of collaboration and helping enterprises in the digital transformation,” Abhijit Kishore, Chief Business Officer, at VIL, said.
Through this collaboration, both the companies aim to support business organisations in automation, deployment of the internet of things and cloud services.
“Through this collaboration, VIL will be able to use virtualization and cloudification to enhance efficiency in a secure manner. We are proud to have VIL as the first Indian service provider to join our service provider partner program,” Nitin Dahiya, Head of Customer Team, VIL at Nokia, said."
Swiggy to onboard 36,000 street vendors under PM SVANidhi scheme in first phase
Swiggy taps into the bottom of the pyramid.
PTI reports: "Food ordering platform Swiggy on Thursday announced the expansion of its street food vendors program to 125 cities under the Prime Minister Street Vendor’s AtmaNibhar Nidhi (PM SVANidhi) scheme.
In the first phase, the company will onboard 36,000 street food vendors to whom the loan has been disbursed in 125 cities on its platform, Swiggy said in a statement.
This follows a pilot that Swiggy initiated with the Ministry of Housing and Urban Affairs (MoHUA) in Ahmedabad, Varanasi, Chennai, Delhi and Indore, through which it has already onboarded over 300 street vendors on its platform, it added.
At the time of onboarding, all vendors will be registered with Food Safety and Standards Authority of India (FSSAI) and provided with a Food Safety Training and Certification (FOSTAC) in partnership with FSSAI and their empanelled partners, Swiggy said.
“As a platform committed to bringing the widest choice of food to the doorsteps of consumers safely and hygienically, we’re delighted to bring them their favourite street food which they have been missing for many months now,” Swiggy COO Vivek Sunder said.
Street vendors are integral to the food culture in India and, “we thank the Ministry of Housing and Urban Affairs for giving Swiggy the opportunity to do our bit to help them adapt to the ‘new normal’ and embrace and thrive in the digital economy,” he added.
The company has created a dedicated team to continuously explore and identify iconic, popular, and proven-safe street vendors on the platform, Swiggy said.
On the development, Rajesh Gupta a street vendor who runs Shree Ram Chaat Bhandar in Varanasi said: “As COVID-19 restrictions came into effect, all customers, including those who regularly came to my stall stopped, putting a lot of stress on me“.
“I’m grateful for this new scheme by the government and this initiative by Swiggy that is helping vendors like me use mobile technology for the first time to reach customers,” he added."
India’s recovery faster than expected; ADB cuts contraction projection to 8% for FY21
Projections get revised as the economic recovery gains momentum.
PTI reports: "The Asian Development Bank (ADB) on Thursday upgraded its forecast for the Indian economy, projecting 8 per cent contraction in 2020-21 as compared to 9 per cent degrowth estimated earlier, on the back of faster than expected recovery.
Observing that the economy has begun to normalise, the Asian Development Outlook (ADO) Supplement said the second quarter contraction at 7.5 per cent was better than expected.
The economy contracted by 23.9 per cent in June quarter of the current fiscal on account of the impact of the coronavirus pandemic.
“The GDP forecast for FY2020 is upgraded from 9.0 per cent contraction to 8.0 per cent, with GDP in H2 probably restored to its size a year earlier. The growth projection for FY2021 is kept at 8.0 per cent,” it said.
Highlighting that India is recovering more rapidly than expected, the report said the earlier South Asia forecast of 6.8 per cent contraction is upgraded to (-)6.1 per cent in line with an improved projection for India.
Growth will return in 2021-22, at 7.2 per cent in South Asia and 8 per cent in India, it added.
Earlier this month, Reserve Bank Governor Shaktikanta Das had said the economy is recuperating faster than anticipated and growth rate is likely to turn positive in the second half of the current financial year.
In the year as whole, the economy is likely to contract by 7.5 per cent, which is an improvement over Reserve Bank’s previous projection of 9.5 per cent contraction, Das had said while unveiling the bi-monthly monetary policy review.
Observing that the prospects of growth have brightened with the progress on the vaccine front, Das said, the economy was likely to record a growth of 0.1 per cent in Q3 and 0.7 per cent in Q4.
With regard to inflation, ADO said, it is expected to ease in the coming months, and the 4 per cent update projection for 2021-22 is maintained.
In India, supply chain disruption brought food inflation to an average of 9.1 per cent in the first 7 months of 2020-21, pushing headline inflation to 6.9 per cent in the same period, it said.
As a result, ADO revised India’s inflation from 4.5 per cent to 5.8 per cent for the current fiscal."
Torrent Pharma recalls Anagrelide Capsules in U.S.
Torrent Pharmaceuticals is voluntarily recalling one lot of Anagrelide capsules, USP, to the consumer level due to dissolution test failure detected during routine quality testing, according to the US Food and Drug Administration (USFDA).
Anagrelide is used to treat a blood cell disorder called thrombocythemia (also called thrombocytosis), which occurs when the body produces too many platelet cells.
Stating this, a communication from the regulator said failed dissolution can result in a slower rate and extent of drug release leading to less anagrelide available in the body. For seriously ill patients with elevated platelet counts, less available anagrelide could increase the risk of clotting (blood coagulation) and clotting or bleeding events such as a heart attack or stroke which could be life-threatening.
To date, Torrent Pharmaceuticals has not received any reports of adverse events related to this recall, USFDA said.
Criminals getting smarter in use of digital currencies to launder money
Criminals are becoming more sophisticated in their use of cryptocurrencies to launder money, with hundreds of millions of dollars of dirty funds last year flowing through digital wallets that allow users to hide their trail, according to Elliptic.
At least 13% of all criminal proceeds in bitcoin passed through privacy wallets - which make it harder to track cryptocurrency transactions - in 2020, up from 2% in 2019, according to a study by the digital currency forensics firm.
While cryptocurrency transactions are pseudonymous, they are recorded on a public ledger called blockchain which makes it easier to track fund flows. Over the past decade, law enforcement has become better at tracking illicit activity on blockchains.
But privacy wallets, of which there are several types, combine, mix and anonymise cryptocurrency transactions, making it complicated to follow a money trail.
India has highest viewership of films on Netflix globally
OTT platforms seem to be gaining viewer attention in India.
PTI reports: "Netflix on Thursday said India has the highest viewership of films globally on its platform and consumption of content in genres like kids, non-fiction and Korean dramas is also witnessing a strong growth.
Over the top (OTT) players like Netflix, Amazon Prime and Disney+Hotstar have seen massive growth in the past few years on the back of cheap data tariffs and availability of affordable smartphones. The pandemic-induced lockdown further accelerated the consumption of services like online video and music streaming in the country.
“India has the highest viewing of films on Netflix globally and over the last year, 80 per cent of our members in India chose to watch a film every week,” Netflix India Vice President (Content) Monika Shergill said in a blogpost.
She added that the most popular thriller was ‘Raat Akeli Hai’, while titles like ‘Extraction’, ‘Malang’ and ‘The Old Guard’ were the most popular action films and ‘Ludo’ the most popular comedy film.
‘Ala Vaikunthapurramuloo’ (Telugu), ‘Kannum Kannum Kollaiyadithaal’ (Tamil), ‘Kappela’ (Malayalam), and ‘Uma Maheswara Ugra Roopasya’ (Telugu) were among many other films that featured in India’s Top 10 row.
“The viewing for non-fiction series on Netflix in India grew more than 250 per cent in 2020 over 2019... Documentary viewing also grew more than 100 per cent in 2020 over 2019, and ‘Bad Boy Billionaires’, ‘The Social Dilemma’ and ‘Money Heist: The Phenomenon’ were the most popular documentaries on Netflix in India this year,” she said.
The most popular non-fiction shows were ‘Too Hot to Handle’, ‘Indian Matchmaking’ and the recently released ‘Fabulous Lives of Bollywood Wives’
Shergill noted that the viewing of K-dramas (Korean dramas) on Netflix in India increased more than 370 per cent in 2020 over the previous year, as viewers binged on titles like ‘The King: Eternal Monarch’, ‘Kingdom (S2)’, ‘It’s Okay to Not Be Okay’ and ‘Start-up’
She added that viewing of kid’s titles increased more than 100 per cent in India in 2020 over the preceding year.
She added that ‘Dark’ was on the Top 10 row in India for 95 days, while Money Heist featured on the Top 10 row for 170 days. Pok魯n: Mewtwo Strikes Back-Evolution, Blood of Zeus and One-Punch Man (S2) were the most popular anime titles in India this year."
EU sets out search ranking guidelines for Google, Microsoft platforms
Alphabet unit Google, Microsoft and other tech giants will have to be more transparent in how they rank online search results, under European Commission guidelines out on Monday.
The guidelines, which take immediate effect, will be followed up next week by the publication of draft rules that could eventually impose further restrictions on the tech sector.
Smaller rivals and some companies have long complained about arbitrary and opaque practices tech giants employ that affect how their products and services are ranked in search results, especially when that means they are placed far below the bigger companies.
Google's online search practices have landed it total fines of more than 8 billion euros ($9.71 billion) over the period 2017-19 from EU antitrust regulators who found it had unfairly pushed its own products to the disadvantage of competitors.
Workers vote for work-from-home
Rupee depreciates 11 paise to 73.68 against US dollar in early trade
The stock sell-off is putting pressure on the rupee.
PTI reports: "The rupee depreciated 11 paise to 73.68 against the US dollar in opening trade on Thursday tracking muted domestic equities and a rebound in the American currency.
At the interbank forex market, the domestic unit opened at 73.68 against the US dollar, registering a fall of 11 paise over its previous close.
On Wednesday, the rupee strengthened by another 3 paise to mark its seven-week high of 73.57 against the US dollar.
A rebound of the US dollar, Brexit deal impasse and the Reserve Bank of India’s presence in the market weighed on investor sentiments, Reliance Securities said in a research note.
On the other hand, dollar inflows into local equities and strong Chinese yuan could keep depreciation bias limited, the note added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.10 per cent to 90.99.
Traders said the US dollar rebounded against the basket of currencies amid lack of progress over the additional US fiscal stimulus to ease the economic blow from the COVID-19 pandemic.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 315.65 points lower at 45,787.85 and the broader NSE Nifty fell 109.10 points to 13,420.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 3,564.23 crore on a net basis on Wednesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 0.47 per cent to USD 49.09 per barrel."
Discretionary consumption will bounce back in 2021: CEA
Chief Economic Adviser Krishnamurthy Subramanian expects discretionary consumption to bounce back in 2021, along with spending on sectors affected by social distancing norms, given the promise of COVID-19 vaccines bringing the pandemic under control.
The CEA also said the advent of the Joe Biden administration and a change in the U.S.’ stance on trade would benefit India.
“There are two key areas that we would be watching — climate change and trade. I expect the Biden administration to go back to the traditional, more long-run thinking on this and that would be good for the world. India, especially, would be benefiting from the change in stance on trade because it has always played by the rules in the world order,” Dr. Subramanian said. “I do expect India to work closely with the Biden administration to bring about more prosperity to the world,” he said in a discussion on ‘Who will lead the global recovery?’ at the 2020 Milken Institute Asia Summit on Wednesday morning.
The use of vaccines could help hasten herd immunity and the pandemic was likely to come under control in the coming year, he said.
Indian shares slip from record highs, agrochemical firm UPL plunges
A moderate correction in stocks after the long bull run.
Reuters reports: "Indian shares came off record highs on Thursday and the Nifty snapped seven sessions of gains, led by a 10% slide in agrochemical maker UPL following a report of promoters siphoning money.
The NSE Nifty 50 index fell 0.44% to 13,470.05 by 0356 GMT, while the benchmark S&P BSE Sensex was down 0.38% at 45,928.14. The indexes had hit record highs in 14 of the previous 21 sessions, driven mainly by news of progress in coronavirus vaccines.
India's drugs regulator on Wednesday said it needed more data to make a decision on emergency authorisation for vaccines developed by AstraZeneca and Bharat Biotech.
UPL Ltd was the biggest loser on the Nifty, falling as much as 10% after the Economic Times reported that a whistleblower claimed promoters of the company had siphoned money.
Cement stocks ACC Ltd, Ambuja Cement and UltraTech Cement slid 1.9%-3.0% after Reuters reported late Wednesday that India's antitrust body conducted raids at the companies' offices.
Asian shares were also lower on uncertainty about U.S. stimulus and after Britain's medicine regulator issued an anaphylaxis warning on Pfizer's vaccine after some adverse reactions."
Lack of reforms hurting India, democracy making reforms difficult: BJP spokesperson
BJP’s national spokesperson on economic affairs Gopal Krishna Agarwal on Wednesday said the lack of critical reforms after 1991 has made Indian industry unfit to compete globally for now and appeared to back the NITI Aayog CEO’s comments on democracy making reforms difficult.
Citing the resistance to the government’s farm sector reforms, Mr. Agarwal said that everybody agrees that the agriculture sector needs to open up to stay competitive. “But still we see the reforms are being hindered currently… Our land reforms are pending, the 2013 land law is not very conducive to industry,” he said.
“We have to go for large-scale improvements in the factors of production and there has to be consensus. Today also, NITI Aayog CEO (Amitabh Kant) said – in democracy, it is so difficult to make any reform. Otherwise, why are those economic reforms are still pending? How much capital a political party can spend on reforms?” Mr. Agarwal asked.
