The benchmark stock indices have opened the day with significant gains after yesterday's losses.
Gold, meanwhile, has hit a one-week high as the chorus for an economic stimulus grows louder.
Join us as we follow the top business news through the day.
Loan moratorium boosts retail trading in Malaysian stocks
Sensex soars 646 points as Reliance Industries hits fresh high
It was a great day for the benchmark stock indices with heavyweight RIL on fire.
PTI reports: "Domestic equity benchmark Sensex soared 646 points on Thursday, boosted by a rally in index heavyweight Reliance Industries.
The 30-share BSE index ended 646.40 points or 1.69 per cent higher at 38,840.32. The NSE Nifty rallied 171.25 points or 1.52 per cent to 11,449.25.
Reliance Industries was the top gainer in the Sensex pack as it zoomed over 7 per cent. The company’s market valuation rose to Rs 14,66,589.53 crore (USD 199.64 billion) in late afternoon trade.
On Wednesday, the company had announced that US private equity firm Silver Lake Partners would buy 1.75 per cent stake in its retail arm for Rs 7,500 crore.
RIL stock jumped 8.45 per cent to a record high of Rs 2,343.90 on the BSE during the day. On the NSE, it gained 8.49 per cent to a lifetime high of Rs 2,344.95.
Asian Paints, Axis Bank, UltraTech Cement, IndusInd Bank and Bajaj Finance were also among the gainers.
On the other hand, Tata Steel, Bharti Airtel, Kotak Bank, HDFC Bank and Titan were among the laggards.
Domestic equities started on a positive note, and extended gains mainly driven by strong buying sentiment in Reliance Industries, traders said.
Bourses in Shanghai and Hong Kong ended in the red, while Seoul and Tokyo closed with gains.
Stock exchanges in Europe were also trading on a mixed note.
Global oil benchmark Brent crude was trading 1.27 per cent lower at USD 40.27 per barrel."
RIL jump 8.5%; mkt valuation touch nearly $200 billion
With news of a possible deal between Amazon and Reliance Retail, RIL shares have received a boost.
PTI reports: "Continuing its rally, shares of Reliance Industries Ltd on Thursday zoomed 8.5 per cent and the company’s market valuation rose to Rs 14,66,589.53 crore (USD 199.64 billion) in late afternoon trade.
On Wednesday, it was announced that US private equity firm Silver Lake Partners would buy 1.75 per cent stake in RIL’s retail arm for Rs 7,500 crore.
The market heavyweight stock jumped 8.45 per cent to a record high of Rs 2,343.90 on the BSE. On the NSE, it gained 8.49 per cent to a lifetime high of Rs 2,344.95.
In the previous session too, it had closed with nearly 3 per cent gain.
RIL’s market valuation rose to Rs 14,66,589.53 crore (USD 199.64 billion) in late afternoon trade on the BSE.
Gain in Reliance Industries was also instrumental in market rally, with the 30-share BSE Sensex trading 544.58 points higher.
Silver Lake will invest Rs 7,500 crore in Reliance Retail Ventures (RRVL), a subsidiary of RIL. This will mark the second billion-dollar investment by Silver Lake in an RIL subsidiary after the USD 1.35 billion investment in Jio Platforms announced earlier this year.
Reliance Retail Limited, a subsidiary of RRVL, operates India’s largest and most profitable retail business spanning supermarkets, consumer electronics chain stores, cash and carry wholesale business, fast-fashion outlets, and online grocery store JioMart."
States need ‘hard cash’, govt’s ‘letter of comfort’ has no value: Chidambaram on GST compensation
Senior Congress leader P. Chidambaram on Thursday said the Centre’s reported proposal of giving “letter of comfort” to states to borrow money to bridge the GST compensation gap were “just words of comfort” on a piece of paper that has “no value”.
He asserted that the states need “hard cash” and if they are forced to borrow, the axe will inevitably fall on capital expenditure by the states.
“Government says it will give a ‘Letter of Comfort’ to the states to borrow money to bridge the GST Compensation gap. These are just words of comfort on a piece of paper that has no value,” Mr. Chidambaram said in a series of tweets.
“What states need is hard cash. Only the central government has multiple options and the flexibility to raise the resources and pay the shortfall in GST compensation to the states,” the former finance minister said.
Rupee settles 9 paise higher at 73.46 against US dollar
The rupee has ended the day in the green.
PTI reports: "The rupee strengthened by 9 paise and settled at 73.46 (provisional) against the US dollar on Thursday supported by weak American currency and positive domestic equities.
At the interbank forex market, the domestic unit opened at 73.42 against the US dollar, and finally closed at 73.46 against the American currency, registering a rise of 9 paise over its previous close.
During the session, the domestic unit witnessed an intra-day high of 73.16 and a low of 73.50 against the greenback.
On Wednesday, the rupee had settled at 73.55 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.19 per cent to 93.07.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 495.83 points higher at 38,689.75, and the broader NSE Nifty advanced 132.75 points to 11,410.75.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 959.09 crore on a net basis on Wednesday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 0.86 per cent to USD 40.44 per barrel."
Nearly 50% of India’s working women feeling increased stress due to pandemic: Survey
Some evidence of the emotional toll of the pandemic-induced lockdown.
PTI reports: "Nearly 50 per cent of India’s working women are feeling increased stress due to the COVID-19 pandemic, claimed a survey conducted by online professional network LinkedIn.
It revealed that the pandemic is taking a toll on the emotional well-being of India’s working women as 47 per cent report they are experiencing more stress or anxiety due to the pandemic, LinkedIn said.
For men, this number stood at 38 per cent, pointing towards a disproportionate impact on women in these testing times, it said.
LinkedIn on Thursday announced the findings of the tenth edition of the LinkedIn Workforce Confidence Index, a fortnightly pulse on the confidence of India’s workforce.
Based on the survey responses of 2,254 professionals in India, findings from the weeks of July 27 - August 23 reveal the pandemic’s impact on India’s working mothers and working women, and the cautious optimism of freelancers towards personal finances and career prospects, it said.
The survey also underscored the challenges of childcare during the pandemic, according to a LinkedIn statement.
The survey showed that India’s overall confidence is growing steadily.
Remote working has laid out a tougher road for India’s working mothers as the survey showed that around one in three (31 per cent) working mothers are currently providing childcare full-time, when compared to nearly one in five (17 per cent) working fathers, the statement said.
“Worryingly, more than two in five (44 per cent) working moms are working outside their business hours to provide childcare, nearly twice as many men (25 per cent)”, it said.
The survey showed that only one in five (20 per cent) working mothers rely on a family member or friend to take care of their children, when compared to 32 per cent men.
More than 46 per cent working mothers reported working till late to make up for work, and 42 per cent are unable to focus on work with their children at home, it said.
Findings show that about one in four freelancers anticipate an increase in their earned income (25 per cent) and personal savings (27 per cent), while close to one in three (31 per cent) expect their number of investments to increase in the next six months."
Oil prices slip as growing stockpiles signal bumpy fuel demand recovery
Oil struggles as demand continues to be a concern.
Reuters reports: "Oil futures fell in early trade on Thursday, paring overnight gains, on worries about fuel demand after data showed U.S. crude stockpiles rose last week, rather than dropping as expected, and COVID-19 cases continued to rise around the world.
U.S. West Texas Intermediate (WTI) crude futures fell 20 cents, or 0.5%, to $37.85 a barrel at 0056 GMT, after climbing 3.5% on Wednesday.
Brent crude futures dropped 14 cents, or 0.3% to $40.65 a barrel, after rising 2.5% on Wednesday.
As coronavirus case surged in several U.S. states, the country's crude stockpiles rose by 3 million barrels in the week to Sept. 4, data from the American Petroleum Institute showed on Wednesday. That compared with analysts' forecasts of a draw of 1.4 million barrels.
The U.S. Energy Information Administration will release official weekly inventory data later on Thursday, a day later than normal following the U.S. Labor Day holiday.
In a further bearish sign, leading commodity traders are booking tankers to store crude oil and diesel on the water, with supply outpacing consumption, according to trading sources and shipping data.
The rising stockpiles come ahead of a meeting on Sept. 17 of the market monitoring panel of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+, which in August trimmed supply curbs from earlier this year on expectations demand would improve.
“This issue will be front and centre ... next week, where we expect a strong statement that if markets continue to weaken, the producer group will be prepared to trim output further,” Citi analysts said in a note."
Govt. policies have caused ‘loss of crores of jobs’, ‘historic fall’ in GDP: Rahul
Congress leader Rahul Gandhi on Thursday alleged that the policies of the Centre have caused loss of crores of jobs and appealed to people to make the Modi government “listen to their voice“.
He urged people to be a part of the Congress’s ‘Speak Up for Jobs’ campaign being run on Thursday from 10 AM for 10 hours.
“The policies of Modi Govt have caused the loss of crores of jobs and a historic fall in GDP,” Gandhi alleged in a tweet.
“It has crushed the future of India’s youth. Let’s make the Govt listen to their voice,” the former Congress chief said.
Congress chief spokesperson Randeep Surjewala said the promise was of providing two crore jobs every year and claimed that instead of providing 12 crore jobs in six years, 14 crore jobs were “snatched away.”
ECB stimulus fails to stir inflation
Gold hits one-week high on dollar weakness; ECB meet in focus
Bullish sentiment returns to gold as stocks have been lackluster this week.
Reuters reports: "Gold steadied near a one-week high on Thursday as the dollar weakened, but the yellow metal traded in a narrow $8 range as investors held large bets ahead of the European Central Bank's monetary policy decision due later in the day.
Spot gold was flat at $1,946.25 per ounce by 0511 GMT, after hitting its highest since Sept. 3 at $1,950.51 on Wednesday.
U.S. gold futures were steady at $1,954.90.
“The U.S. dollar is a bit lower, stocks bounced a bit and that essentially carried over to gold as well,” said DailyFx currency strategist Ilya Spivak.
Asian stock markets snapped their longest losing streak since February following a bounce on Wall Street, while the dollar index slipped from four-week highs, making gold less expensive for holders of other currencies.
Spivak said investors in gold may also be waiting for U.S. CPI data and the Federal Reserve's two-day meeting next week, in addition to ECB's announcement which is a key risk event.
The ECB is all but certain to keep policy unchanged when it announces its decision at 1145 GMT, which will then be followed by a news conference by President Christine Lagarde.
Major central banks have rolled out unprecedented stimulus measures and kept interest rates low, driving gold to new highs because of its role as a hedge against inflation and currency debasement.
“Ample money supply, lower interest rates and macro uncertainty should support gold investment,” ANZ analysts said in a note. “Physical demand is recovering, so we see the gold price reaching $2,300/oz next year.”
On the technical front, spot gold may rise more to $1,965 per ounce, as suggested by a projection analysis and a falling channel, said Reuters technical analyst Wang Tao.
Elsewhere, silver was steady at $27.02 per ounce, platinum little changed at $916.18 and palladium gained 1% to $2,294.42."
‘GDP contraction raising flags over lenders’ asset quality’
Asset quality risks for banks are rising amid the country’s economic contraction, even though risks from corporate loans have decreased from the previous credit cycle, Moody’s Investors Service said in a new report.
“Corporates will not be immune [to risks] from the ongoing economic contraction caused by the coronavirus outbreak,” Srikanth Vadlamani, vice-president and senior credit officer at Moody’s said. “Near-term stress at corporates is already visible in the very weak performance in the quarter ending June 2020,” he added.
“However, risks from corporate loans have decreased from 2012-19, when a large amount of corporate loans were impaired. With exposures to most corporates with weak financial health already recognised as NPLs, currently performing loans are better placed to withstand stress,” he said.
Markets bet on herd immunity
Bold action needed to revive economy, says industry
Following a 23.9% contraction in GDP in the first quarter of FY21, industry has urged “bold and decisive” action from the government to stimulate demand for India to return to a positive growth trajectory, the findings of a survey show.
Conducted in August and covering 166 firms, the survey by FICCI and Dhruva Advisors said weak demand continued to remain the key bottleneck as almost 68% have reported this as their biggest challenge; 41% have said sales in August were less than 50% from a year earlier. Another 21%, reported sales between 50%-75% of the August 2019 figures.
“Reviving the economy requires sustained effort, especially when, in the first quarter, our GDP suffered a major blow,” said Sangita Reddy, president, FICCI.
Rupee rises 16 paise to 73.39 against US dollar in early trade
The strength in the stock indices has helped the rupee hold against the dollar.
PTI reports: "The rupee strengthened by 16 paise to 73.39 against the US dollar in opening trade on Thursday supported by weak American currency and positive domestic equities.
At the interbank forex market, the domestic unit opened at 73.42 against the US dollar, gained further ground and touched 73.39 against the US dollar, registering a rise of 16 paise over its previous close.
On Wednesday, the rupee had settled at 73.55 against the US dollar.
“Inflows related to Reliance Retail stake sale helped the rupee recover from 73.80 to 73.50 intra-day in the previous session. The inflows are likely to continue ,” said Abhishek Goenka, Founder and CEO, IFA Global.
Goenka further said that market participants are awaiting European Central Bank (ECB) rate decision, scheduled to be released later in the day.
“Most market participants expect the ECB to intervene verbally to talk down the currency given that the pace of recovery in the Eurozone is slowing and headline inflation has turned negative,” he said adding that US jobless claims due during the day will offer further insight into the recovery in the US labour market.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.09 per cent to 93.17.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 296.82 points higher at 38,490.74, and the broader NSE Nifty advanced 79.75 points to 11,357.75.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 959.09 crore on a net basis on Wednesday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 0.42 per cent to USD 40.62 per barrel."
Credit sachets can aid capital stressed PSBs: RBI deputy governor
Public sector banks should learn from FMCG players and “democratise credit”, a move that can help them solve the “biggest fiscal challenge” of recapitalisation, former RBI deputy governor Viral Acharya said on Wednesday.
“There are some PSBs whose business model is so broken in my assessment that there won’t be any immediate suitors who are interested in buying their equity in a significant manner or at decent prices. What is the option? I’d say they should focus on sachetisation or democratisation of credit,” Mr. Acharya said, speaking at a summit organized by ETBFSI.com.
Indian shares rise as Reliance hits record high
A good start to the day for stocks, thanks to the index heavyweight RIL.
Reuters reports: "Indian shares rose on Thursday, driven by gains in shares of Reliance Industries after reports of potential stake sales in the company's retail arm, with strength in broader Asian markets also boosting investor sentiment.
The blue-chip NSE Nifty 50 index rose 0.67% to 11,353.75, while the benchmark S&P BSE Sensex was up 0.75% to 38,473.39 by 0354 GMT.
Mukesh Ambani-led Reliance Industries Ltd rose as much as 2.1% to hit a record high, a day after it secured $1 billion in investment in its retail business from private equity firm Silver Lake. Middle East sovereign firms are also in talks to buy stakes in the retail arm, according to reports.
The Nifty bank index rose 0.91%. India's top court is set to continue hearing a case on waiving interest rates on loans under a moratorium later today.
Broader Asian markets rose following an overnight rally in technology-related stocks on Wall Street after a global selloff."
RBI sets sectoral norms for resolution of COVID-19 related stressed assets
The Reserve Bank on Monday specified five financial ratios and sector-specific thresholds for resolution of COVID-19 related stressed assets in 26 sectors, including auto components, aviation, and tourism.
The circular issued by the RBI for resolution of stressed assets is based on the recommendations of the K.V. Kamath committee, which submitted its report on September 4. “The recommendations of the Committee have been broadly accepted by the Reserve Bank,” RBI said in a release.
The key financial ratios suggested by the committee are total outside liabilities/adjusted tangible networth; total debt/EBITDA; current ratio, which is current assets divided by current liabilities; debt service coverage ratio; and average debt service coverage ratio.
