The Nifty and the Sensex have opened the day with slight gains after the heavy losses suffered yesterday.
Petrol and diesel prices have been increased for the fourth day in a row since dynamic pricing was resumed.
Join us as we follow the top business news through the day.
Jeff Gundlach turns bearish on US dollar
Sensex surges 290 pts; Nifty reclaims 10,100 level
A recap of the day's action in the stock bourses.
PTI reports: "The BSE Sensex surged 290 points on Wednesday following gains in index heavyweights Reliance Industries, HDFC and ICICI Bank amid persistent foreign fund inflows.
After hitting an intra-day peak of 34,350.17, the 30-share benchmark settled 290.36 points, or 0.86 per cent, higher at 34,247.05.
Similarly, the NSE Nifty climbed 69.50 points, or 0.69 per cent, to 10,116.15.
IndusInd Bank was the top gainer in the Sensex pack, rallying around 8 per cent, followed by Kotak Bank, Reliance Industries, HDFC, Axis Bank and SBI.
On the other hand, Hero MotoCorp, Tata Steel, Bajaj Auto and ONGC were among the laggards.
On a net basis, foreign institutional investors bought equities worth Rs 490.81 crore on Tuesday, provisional exchange data showed.
Buying in financial stocks led benchmarks higher during the day, traders said.
Persistent foreign fund inflows too buoyed the market, they added."
PNB collected Rs 268 crore as ATM transaction charges, annual maintenance fee in FY20
Some data on the income from non-core banking services for a public sector lender.
PTI reports: "Punjab National Bank collected around Rs 268 crore as ATM transaction charges and annual maintenance fee on debit cards during 2019-20 fiscal, according to an RTI reply.
The public sector lender collected Rs 152.88 crore from customers by levying annual maintenance charges (AMC) on debit cards.
While Rs 115.21 crore was garnered by way of levying a fee on ATM transactions, the bank said in a response to a Right to Information (RTI) filed by Madhya Pradesh-based RTI activist Chandra Shekhar Gaur.
In response to a query about the AMC on debit cards, New Delhi-based PNB said, “AMC for Punjab National Bank is Rs 150 per year plus taxes (for classic, platinum and international debit cards). AMC for Kisan Credit Cards, Mudra, PMJDY and cards issued under other government schemes is nil.”
To a query about the amount that was collected in 2019-20 from customers for not maintaining minimum average balance, the lender said that there is no provision for charging penalty on the non-maintenance monthly average balance in PNB."
Johnson Lifts deploys contactless use technology
Johnson Lifts, a manufacturer of lifts and escalators, has come out with an innovation that enable users to operate lifts without touching the buttons. It is the second company to do so after Kone Elevator India, that introduced a mobile app last week.
“Our design and development team has developed a smartphone app EyeRIS that allows users to have a contactless lift usage experience, crucial in these times when COVID-19 is forcing us to look at our lives differently,” said the firm’s ED V. Jagannathan.
Rupee settles marginally higher at 75.59 against US dollar
The modest strength in domestic equities didn't help the rupee very much, which closed with only marginal gains against the dollar.
PTI reports: "The rupee pared early gains to settle on a flat note at 75.59 (provisional) against the US dollar on Wednesday ahead of the US Federal Reserve’s monetary policy decision, even as domestic equities were trading on a positive note.
Forex traders said rupee traded in a range bound manner in the absence of any major trigger and market participants are eagerly awaiting Fed’s stance and their outlook on the US economy for further cues.
The rupee opened at 75.49 against the US dollar, but pared the gains to settle at 75.59 against the US dollar, up 2 paise over its previous close.
It had settled at 75.61 against the greenback on Tuesday.
During the four-hour trading session, the domestic unit saw an intra-day high of 75.42 and a low of 75.60.
“The USD/INR spot has continued to remain range bound as there was no major catalyst to react to. Now the market’s focus is on tonight Federal Open Market Committee stance and its outlook on the US economy,” said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
Gupta further added that “we don’t expect a rate cut by Fed but it may provide a grim outlook and introduce more unconventional measures like yield curve control to keep the rates under control. In USD/INR spot 75 has been acting as a crucial support, a break of which is unlikely“.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.25 per cent to 96.08"
Indian economy to grow at 9.5% in next fiscal: Fitch Ratings
The bright side of low growth this year is that next year's growth rate could be calculated from a lower base.
PTI reports: "After a contraction in the current financial year, India’s economy is forecast to bounce back with a sharp growth rate of 9.5 per cent next year provided it avoids further deterioration in financial sector health, Fitch Ratings said on Wednesday.
The coronavirus pandemic will lead to shrinking of the already slowing economy in 2020-21 that started in April. Fitch Ratings forecast a 5 per cent contraction in the GDP in the ongoing financial year.
“The pandemic has drastically weakened India’s growth outlook and laid bare the challenges caused by a high public-debt burden,” Fitch Ratings said in its APAC Sovereign Credit Overview released on Wednesday.
“After the global crisis, India’s GDP growth is likely to return to higher levels than ‘BBB’ category peers, provided it avoids further deterioration in financial sector health as a result of the pandemic,” it said forecasting a 9.5 per cent real GDP growth next year."
Capgemini ropes in Coursera to give its employees access to over 4000 courses
French tech major Capgemini has on Wednesday roped in e-learning platform Coursera to make available an additional of over 4,000 courses taught by the world’s top university and industry educators across business, technology, data science, and personal development on `NEXT', its newly designed internal digital learning hub with a view to cater to the upskilling needs of its 270,000 employees in 50 different geographies.
The global partnership with Coursera will further expand Capgemini's existing libraries of high-quality learning.
Augmenting the Group’s current Learning & Development offerings, via its in-house University, the goal of the collaboration is to help team members to further develop their skills in several areas including professional services, technology consulting, cloud adoption, sales productivity and many more, as per the company.
COVID-19 pandemic radically changing consumer behaviour in India: Survey
A survey conducted by Ernst & Young sheds light on likely changes in consumer behavior due to the crisis.
PTI reports: "Consumer behaviour in India is radically changing due to COVID-19 with 60 per cent of buyers in the country believing that the pandemic would alter the way they shop, an EY survey said on Wednesday.
According to the EY Future Consumer Index, five new segments may emerge as consumers move beyond the pandemic -- back with a bang (constituting 38 per cent of respondents), stay frugal (29 per cent), keep cutting (19 per cent), cautiously extravagant (11 per cent) and get to normal (2 per cent).
The ‘back with a bang’ group is expected to spend much more in all categories, while ‘stay frugal’ will spend slightly less.
The ‘keep cutting’ segment will make deep spending cuts, whereas the ‘cautiously extravagant’ section is willing to pay a premium for certain products and spending in ‘get to normal’ group will be largely unchanged, the survey noted.
According to Pinakiranjan Mishra, Partner and National Leader, Consumer Products and Retail, at EY India, companies must formulate strategies immediately to address the challenges.
Firms should incorporate permanent safety measures in offices and on shop floors, re-evaluate brand portfolio, expand relationships with third-party e-commerce platforms, and “most importantly, anticipate and be ready to respond to newer habits that consumers will develop after living through the pandemic,” Mishra said."
Hero MotoCorp Q4 net declines 22%
The country’s largest two-wheeler maker Hero MotoCorp on Tuesday registered a nearly 22% decline in consolidated net profit to ₹613.81 crore for the fourth quarter ended March 31, 2020. The company had posted a net profit of ₹786.81 crore in the January-March 2019 quarter, and ₹905.13 crore in the October-December 2019 period.
Revenues from operations during the quarter under review stood at ₹6,334 crore as against ₹7,953.45 crore in the same quarter last year, down 25.5%
For the full year 2019-20, the profits were up at ₹3,659.41 crore as against ₹3,466.35 crore in the previous year, while revenue from operation was down 13.8% to ₹29,255 crore as against ₹33,972.23 crore.
Kyle Bass bets on collapse of Hong Kong's currency peg
Banks flush with liquidity, but can't lend recklessly: SBI official
Bank officials are in no mood to splurge despite record liquidity in their books.
PTI reports: "Banks are flush with liquidity but there are no credit demands from the private sector amidst coronavirus crisis, a senior State Bank of India (SBI) official said on Tuesday.
However, the lenders at this juncture still have to be prudent in their lending decisions and cannot be "reckless", Sujit Varma, Deputy Managing Director (Corporate Finance), State Bank of India, said, while addressing a webinar.
"Our chairman has mentioned that wherever there is a bankable proposal, we are willing to fund that, which we keep on saying as well. SBI being the largest bank, I can tell you that we are always willing and we are ready to play our part and extend that support to help the economy and various industries," he said.
There is a general perception that banks are increasingly becoming risk averse, he said, adding that one of the analysts mentioned that banks have actually moved from being risk averse to risk-phobic.
The webinar was organised by the PHD Chamber of Commerce and Industry on ''Corporate Finance – Emerging Issues, Challenges and Opportunities - During COVID-19''.
He said there is a complete lack of fresh investments by businesses.
"Today what we see that there is no demand for credit from the private sector other than the working capital requirements," Varma said.
On the other hand, it is also true that banks today are flush with liquidity, he added.
The banks on an average are parking Rs 6-7 lakh crore to the reverse repo window (of the RBI where they earn interest), because banks do not see any credit off-take, according to him.
He said the real contradictory situation is at one hand there is flush liquidity and on the other there lack of credit demand."
India inflation likely to have hit six-month low in May
The huge drop in demand due to the lockdown may have helped overall inflation head lower despite the rise in the price of various essentials.
Reuters reports: "India consumer price inflation is likely to have moderated to a six-month low in May on a softer rise in food prices as supply disruptions eased after businesses reopened from the coronavirus lockdown in many parts of the country, a Reuters poll found.
The June 4-9 poll of 35 economists showed that the consumer price index (CPI) was forecast to rise to 5.50% in May compared with a year ago.
Government statistics for April headline data were not published because of the lockdown, so the latest comparable figure is for March, which was revised down to 5.84% from 5.91% initially.
But some economists believe the May inflation data, scheduled for release on June 12 at 1200 GMT, will also be cancelled.
If publication goes ahead and the Reuters consensus forecast is realised, it would be the lowest inflation rate since November. But it would also mark the eighth consecutive month that inflation is above the Reserve Bank of India's medium-term target of 4.00%.
“Food prices will be the biggest risk, but we do not see a material jump in inflation owing to lifting of the lockdown ... and rising unemployment numbers suggest demand-pull inflation will continue to be low,” said Rini Sen, India economist at ANZ.
Some economists also expected price pressures for food to be moderate over the coming months based on expectations for the monsoon to be timely and normal.
Also, minutes of the latest unscheduled Reserve Bank of India meeting in late May, where it again cut the repo rate by 40 basis points to 4.00%, showed the central bank's policy focus is aimed at reviving the economy first before worrying about the inflation outlook."
Rupee rises 12 paise to 75.49 against US dollar in early trade
Moderate foreign buying has helped shore up the rupee against the dollar.
PTI reports: "The rupee appreciated 12 paise to 75.49 against the US dollar in early trade on Wednesday tracking gains in Asian currencies and the equity market amid sustained foreign fund inflows.
The rupee opened strong at 75.49 against the US dollar, up 12 paise over its previous close.
It had settled at 75.61 against the greenback on Tuesday.
Forex traders said positive domestic equities, persistent foreign fund flows and the revival of business activity supported the rupee.
“Asian currencies appreciated against the greenback this Wednesday morning and could also lend support to the domestic unit,” Reliance Securities said in a research note.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.01 per cent to 96.31.
“The greenback declined this morning ahead of the US Federal Reserve’s monetary policy decision and release of summary of economic projections,” the note added.
The 30-share BSE benchmark Sensex was trading 94.58 points higher at 34,051.27 and broader NSE Nifty rose 21.30 points to 10,067.95.
Foreign institutional investors were net buyers in the capital market as they bought shares worth Rs 490.81 crore on Tuesday, according to provisional exchange data."
Govt. to review if private banks taking part in MSME revival
While public sector banks (PSBs) have stared sanctioning loans under the credit guarantee scheme for micro, medium and small enterprises (MSMEs), the government now wants to know if private lenders are also participating in the scheme.
This is because the private sector banks have a significant exposure to MSME credit. With the total loan outstanding to the MSMEs at ₹17.75 lakh crore, India’s largest private lender HDFC Bank’s share is about 13%. The balance is shared between other private lenders, PSBs and NBFCs.
State Bank of India — the country’s largest lender — has a share of about 23% in MSME loans. The issue was discussed during a meeting between top officials of the PSBs and Finance Minister Nirmala Sitharaman. The meeting was convened to review the status of emergency credit line guarantee scheme (ECLGS) and extended partial credit guarantee scheme, according to a communication by the Finance Ministry to the PSBs.
Lockdown: Parle-G helps Parle clock best-ever growth in last four decades
Looks like all the hoarding and panic-buying during the lockdown has helped biscuit makers.
PTI reports: "Leading food company Parle Products logged record sales of its Parle-G biscuits, preferred for mass consumption, in April and May during the lockdown, said a senior company official.
The company has gained a market share of around 5 per cent in the highly competitive biscuit segment, helped by Parle-G biscuits, which was proffered by the people while stocking pantry during the pandemic.
Parle-G biscuits also gained traction as it was preferred by government agencies and NGOs working to distribute food relief packages to the people during the pandemic due to its economic proposition with value package of Rs 2 besides being considered as a good source of glucose, Parle Products Senior Category Head Mayank Shah told PTI.
The growth was phenomenal and as a result Parle was able to increase its market share by 4.5 to 5 per cent during the lockdown, he added.
This is one of the highest in the recent (time). At least in last 30 to 40 years, we have not seen this kind of growth, Shah said adding in his 20 years of working with the biscuits major he hasn’t witnessed a performance like this.
Shah said Parle-G is a comfort food for most Indians and not a biscuit, adding, during time of uncertainty, it has been consumed a lot.
Even during the earlier crisis like tsunami and earth quakes, sales of Parle-G biscuits had gone up, he added.
That is the kind of trust, which the people have in the brand, he said adding the Parle-G is good for storing also as it has a longer shelf life.
The company had also announced to donate three crore packs of Parle-G biscuits when the coronavirus pandemic intensified in India"
Sensex jumps over 200 points in opening session; Nifty tops 10,100
A decent start to the day for the benchmark stock indices.
PTI reports: "Equity benchmark Sensex advanced over 200 points in early trade on Wednesday tracking gains in index-heavyweights HDFC twins, Reliance Industries and Kotak Bank amid sustained foreign fund inflows.
After opening at 34,205.07, the 30-share index was trading 202.71 points, or 0.60 per cent, higher at 34,159.40.
Similarly, NSE Nifty advanced 55.15 points, or 0.55 per cent, to 10,101.80.
IndusInd Bank was the top gainer in the Sensex pack, rising around 2 per cent, followed by HDFC, Kotak Bank, Tech Mahindra, HCL Tech and UltraTech Cement.
On the other hand, Tata Steel, Hero MotoCorp and Infosys were among the laggards.
In the previous session, the BSE barometer settled 413.89 points or 1.20 per cent lower at 33,956.69, and the broader Nifty ended 120.80 points or 1.19 per cent down at 10,046.65.
On a net basis, foreign institutional investors bought equities worth Rs 490.81 crore in the capital market on Tuesday, provisional exchange data showed.
According to analysts, market opened on a positive note as fresh foreign fund inflows and stock-specific gains led benchmarks higher."
Petrol price hiked by 40 paise per litre, diesel by 45 paise
Petrol price on Wednesday was hiked by 40 paise per litre and diesel by 45 paise, the fourth straight daily increase in rates after oil PSUs ended an 82-day hiatus in rate revision.
Petrol price in Delhi was hiked to ₹73.40 per litre from ₹73, while diesel rates were increased to ₹71.62 a litre from ₹71.17, according to a price notification of state oil marketing companies.
The rates have been increased across the country and vary from state to state depending on the incidence of local sales tax or VAT.
Domestic remittances by migrants climb back to clock 40% of pre-lockdown level
The easing of the lockdown is bringing back some signs of normalcy in the economy.
PTI reports: "Domestic remittances by the migrant working population have climbed back to clock 40 per cent of the pre-lockdown level, with the advent of Unlock 1.0 from June 1, fintech company Eko India said on Tuesday.
Eko India Financial Services Pvt Ltd (founded in 2007) said it is serving over 3 crore low to moderate-income migrant workers in India.
A clear drop was observed in the remittances made by the migrant working population from urban to rural India, which were recorded at a meagre 35 per cent of the total transactions recorded in the period before the lockdown, it said in a release.
“With the advent of Unlock 1.0 from the beginning of this month, the remittances have climbed back to clock 40 per cent of the total pre-lockdown levels; and are expected to cross the 50 per cent mark by the end of June,” Eko India said.
The remittance data also reflects the speed at which the country’s economy is bouncing back and the rate at which income levels and jobs are being reclaimed by the migrant working populace, it added.
It further said the data also underlines a nationwide trend.
Remittances from across urban nodes have been impacted - Delhi is down 80 per cent, Mumbai 95 per cent, Chandigarh 88 per cent, Bengaluru 83 per cent, and Surat 95 per cent."
