Today's top business news: Shares end four-day rally on inflation worries, oil refiners cut processing and imports as pandemic hits demand, fuel prices rise again as petrol breaches 100 mark, and more

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

The Sensex and the Nifty opened the day on a negative note weighed down by fears surrounding inflation in the United States.

Join us as we follow the top business news through the day.

4:30 PM

COVID-19 | India’s smartphone market to slow down in 2Q21

The smartphone industry in the country is expected to witness growth challenges in April-June quarter due to the second wave of the coronavirus pandemic even as the sector saw a healthy year-on-year growth of 18% to 38 million units shipments in the first quarter (January-March) of 2021, according to International Data Corporation (IDC).

However, when compared to strong October-December 2020, the Indian smartphone market declined by 14% in the first quarter.

“The April-June quarter is expected to face growth challenges under the weight of the second wave of infections. However, the high shipments from the first quarter should be able to suffice for the immediate demand,” Navkendar Singh, Research Director, Client Devices & IPDS, IDC India, said.

Read more

4:00 PM

Indian shares end four-day rally on inflation worries

The stock market rally comes to an end.

Reuters reports: "Indian shares snapped a four-session rally on Tuesday as financial and IT stocks slid amid worries that a potential acceleration in U.S. inflation could lead to foreign fund outflows from the region.

The NSE Nifty 50 index fell 0.61% to 14,850.75, while the S&P BSE Sensex slid 0.69% to 49,161.81.

Stock markets in Asia and Europe dropped as U.S. inflation expectations surged to their highest in a decade with the economy reopening from pandemic-driven shutdowns, fanning concerns that interest rate hikes could arrive earlier than expected.

April consumer price data for the United States is due on Wednesday.

"Markets will keenly watch the inflation data from the U.S. as any unexpected rise could lead to potential interest rate hikes and stoke fears of institutional money moving out. This could lead to pressure on the Indian banking space in particular," said Gaurav Garg, head of research, CapitalVia Global Research.

This comes even as the Reserve Bank of India is expected to maintain status quo on rates as inflation is likely to remain within its target.

Over the last four sessions, India's Nifty and Sensex had gained about 3% and 2.5%, respectively, even as domestic coronavirus cases surged.

Shares of lenders accounted for most of the losses on the benchmark Nifty on Tuesday. The Nifty Bank index fell 0.8%, with top private-sector lender HDFC Bank declining 1.2%.

The Nifty Metal index dropped 0.9% after a commodity-driven four-day rally to record highs, while IT majors Infosys and Tata Consultancy Services slipped 0.7% each.

State-run firms Coal India, NTPC, Indian Oil Corp and GAIL were among the top gainers in the Nifty 50, rising 4.6%-5.9%."

3:30 PM

Centre rectifies error in treatment payment note

The Finance Ministry issued a corrigendum notification late on Monday night to enable cash payments of more than ₹2 lakh for treatment of COVID-19 patients, hours after assuring the Delhi High Court that an error in its May 7 notification to permit the same shall be rectified.

As per the notification that was issued last Friday after a petition was filed in the court, cash payments were allowed till May 31, provided the hospitals or health care providers obtained the Aadhaar or PAN details of the patients and the ‘payee’ and the relationship between the patient and the ‘payee’.

Since ‘payee’ refers to the person being paid and not the person paying the bill, the notification had not had the intended effect yet. The government’s counsel in the case informed the High Court that the word ‘payee’ shall be corrected.

The word “Payee” in the May 7 notification issued under the income tax law is to be read as “Payer”, the Ministry said in its corrigendum notification.

Read more

3:00 PM

Foxconn iPhone India output drops 50% amid COVID surge

Production of the Apple iPhone 12 at a Foxconn factory in India has slumped by more than 50% because workers infected with COVID-19 have had to leave their posts, two sources told Reuters.

The Foxconn facility in the southern state of Tamil Nadu produces iPhones specifically for India, the world's No.2 smartphone market.

Tamil Nadu is one of the worst hit states in the second coronavirus wave engulfing India. Officials imposed a full lockdown in the state from Monday, closing public transport and shuttering shops, to try slow surging infections.

More than 100 Foxconn employees in the state have tested positive for COVID-19 and the company has enforced a no-entry ban at its factory in the capital of Chennai until late May, one of the sources said.

"Employees are only allowed to leave but not to enter the facility since yesterday," the person said. "Only a small part of output is being kept."

Read more

2:00 PM

Flipkart to add 8 lakh sq ft warehousing space to strengthen grocery infrastructure

Another entrant into the online grocery delivery business.

PTI reports: "Walmart-owned Flipkart on Tuesday said it plans to expand its fulfilment centre capacity for grocery by more than 8 lakh sq ft over the next three months across Delhi, Kolkata and other cities.

The additional fulfilment centre capacity will help Flipkart cater to over 73,000 grocery orders per day, a statement said.

"Flipkart plans to step up supply chain infrastructure for its grocery business and add over 8 lakh sq ft of space through five new fulfilment centres over the next three months.

"With this additional infrastructure, the marketplace will bring the ease of online grocery shopping to more users across the country," a statement said.

Flipkart Grocery offers over 7,000 products across more than 200 categories - ranging from daily household supplies, staples, snacks and beverages, confectionery and personal care.

Flipkart said with the current grocery fulfilment centre network spread across Delhi, Mumbai, Bengaluru, Chennai and Hyderabad among other cities, it serves close to 64,000 orders a day.

Unlike traditional warehouses, fulfilment centres are equipped with highly automated pick, pack and shipping processes to facilitate safe and timely processing of orders.

"During these challenging times, e-commerce has emerged as a safe means of making purchases. Customer safety is at the centre of the Flipkart group's efforts and our new grocery supply chain infrastructure will help us serve more customers in the country who can order daily essentials seamlessly and avail of contactless delivery," Flipkart Vice President - Grocery Smrithi Ravichandran said.

She added that the company is continuously engaging with brand and marketplace partners to ensure stock availability across the country.

Last month, Flipkart had announced the expansion of its hyperlocal service Flipkart Quick to six new cities - Delhi, Gurugram, Ghaziabad, Noida, Hyderabad and Pune - to provide consumers access to order daily essentials such as fruits and vegetables and get delivery within 90 minutes."

1:30 PM

Petrol, diesel price rise again; petrol above Rs 100-mark in many districts of MP, Maha & Raj

Fuel prices continue to shoot up.

PTI reports: "Petrol and diesel prices on Tuesday were hiked for the sixth time this month, propelling prices to cross the Rs 100-a-litre-mark in places from Nanded in Maharashtra to Rewa in Madhya Pradesh to Jaisalmer in Rajasthan.

Petrol price was hiked by 27 paise a litre and diesel by 30 paise per litre, according to a price notification by state-owned fuel retailers.

The increase took petrol and diesel prices to their highest-ever level across the country. In Delhi, petrol now comes for Rs 91.80 per litre and diesel is priced at Rs 82.36.

This was the sixth increase in prices since May 4, when the state-owned oil firms ended an 18-day hiatus in rate revision they observed during assembly elections in states like West Bengal.

The price increase led to petrol rates crossing the Rs 100-mark in more places of Rajasthan, Madhya Pradesh and Maharashtra.

Fuel prices differ from state to state depending on the incidence of local taxes such as VAT and freight charges. Rajasthan levies the highest value-added tax (VAT) on petrol in the country, followed by Madhya Pradesh.

Sri Ganganagar district of Rajasthan had the costliest petrol and diesel in the country at Rs 102.70 per litre and Rs 95.06 a litre respectively. Also in Rajasthan, petrol crossed the Rs 100-mark in Jaisalmer (Rs 100.71) and Bikaner (Rs 100.70) while it neared that mark in Barmer (Rs 99.82).

Petrol in several districts of Madhya Pradesh, including Shahdol (Rs 102.06), Rewa (Rs 102.04), Chhindwara (Rs 101.67) and Balaghat (Rs 101.98) crossed the physiological mark. It neared that mark in Indore (Rs 99.90 a litre) and Bhopal (Rs 99.83).

If rates continue to raise, Bhopal will be the first state capital to see petrol at Rs 100.

In Nanded district of Maharashtra, petrol was being sold at Rs 100.30.

In six increases, petrol price has risen by Rs 1.41 per litre and diesel by Rs 1.63.

After raising petrol price by a record Rs 21.58 per litre and diesel by Rs 19.18 since the government raised excise duty to an all-time high in March last year, state-owned fuel retailers, IOC, BPCL and HPCL had reduced petrol price by 67 paise a litre and diesel by 74 paise per litre effected between March 24 and April 15.

Oil companies, who have in recent months resorted to unexplained freeze in rate revision, had hit a pause button after cutting prices marginally on April 15. This coincided with electioneering hitting peak to elect new governments in five states including West Bengal.

No sooner had voting ended, oil companies indicated an impending increase in retail prices in view of firming trends in international oil markets.

They said prices have been on a continuous uptrend since April 27.

Central and state taxes make up for 60 per cent of the retail selling price of petrol and over 54 per cent of diesel. The union government levies Rs 32.90 per litre of excise duty on petrol and Rs 31.80 on diesel.

In Mumbai, the petrol price was hiked to Rs 98.12 a litre on Tuesday from Rs 97.86, while diesel rates were increased to Rs 89.48 from Rs 89.17, the price notification showed."

1:00 PM

Inflow in equity mutual funds drop to Rs 3,437 cr in Apr

Equity mutual funds continue to lose patronage.

PTI reports: "Equity mutual funds witnessed a net inflow of Rs 3,437 crore in April, making it the second consecutive monthly infusion.

However, this was much lower than an inflow of Rs 9,115 crore seen in March, data from the Association of Mutual Funds in India showed on Tuesday.

Prior to this, equity schemes had consistently witnessed outflow for eight straight months from July 2020 to February 2021.

Apart from equities, investors infused over Rs 1 lakh crore in debt mutual funds last month after withdrawing Rs 52,528 crore in March.

Overall, the mutual fund industry witnessed an inflow of Rs 92,906 crore across all segments during the period under review, compared to an outflow of Rs 29,745 crore in March.

As per the data, inflow from equity and equity-linked open ended schemes was at Rs 3,437.37 crore in April.

Barring multi cap, dividend yield, value fund and thematic fund categories, all the equity schemes have seen inflow last month.

Overall, equity schemes had witnessed an outflow of Rs 9,253 crore in January, Rs 10,147 crore in December, Rs 12,917 crore in November, Rs 2,725 crore in October, Rs 734 crore in September, Rs 4,000 crore in August and Rs 2,480 crore in July, which was their first withdrawal in over four years.

Prior to this, such schemes had attracted Rs 240.55 crore in June.

Further, gold exchange traded funds (ETFs) witnessed net inflow of Rs 680 crore last month, compared to Rs 662 crore in March.

The asset under management (AUM) of the mutual fund industry rose to Rs 32.38 lakh crore in April-end from Rs 31.43 lakh crore in March-end."

12:30 PM

Indian oil refiners cut processing, imports as pandemic reduces demand

Lockdowns begin to hit demand.

Reuters reports: "India's top oil refiners are reducing processing runs and imports as the surging COVID-19 pandemic has cut fuel consumption, leading to higher product stockpiles at the plants, multiple company officials told Reuters on Tuesday.

Indian Oil Corp, the country's biggest refiner, has reduced runs to an average of between 85% and 88% of total processing capacity, a company official said, adding runs could be cut further as some plants are facing problems storing refined oil products.

"We do not anticipate that our crude processing would be reduced to last year's level of 65%-70% as inter-state vehicle movement is still there ... (the) economy is functioning," he said."

12:00 PM

‘Small finance banks may lend ₹3,000 cr. to MFIs’

RBI’s move to allow small finance banks (SFBs) to classify loans to small microfinance institutions (MFIs) (with a loan book of sub-₹500 crore) as priority sector advances will lead to an incremental funding of up to ₹3,000 crore to the MFIs, as per Acuite Ratings.

“While scheduled commercial banks have funded large MFIs, they have been reluctant to sanction loans to those smaller in size,” it said in a report.

“However, SFBs understand the small MFI segment in a better way since the majority of the SFBs have started their operations as a small MFI,” it said.

“We expect that this measure will lead to an incremental funding to the sub-₹500 crore MFI segment to an extent of ₹2000-₹3000 crore over FY22 and therefore, provide support to the liquidity position of these players,” it added.

Read more

11:30 AM

‘Growth may slip to 8.2% if wave peaks in June’

India’s growth this year could slip to 8.2% if COVID-19 cases continue to rise till the end of June, rating agency Crisil said as economic risks from the second wave escalate.

The agency, which had estimated 11% growth for FY22, said that its ‘base case’ will hold true only if the surge in COVID-19 cases and lockdowns across the country peak by mid-May and ‘risks are firmly tilted to the downside’ at this point.

In a moderate risk scenario, if cases and lockdowns peak by May-end, Crisil expects growth to be 9.8% for the year. Industry’s revenue growth projections of 15% for the year will hold even in this scenario, it said.

But growth could be as low as 8.2% in a severe downside scenario, with industry revenue growth likely to be significantly lower at 10%-12%, it said in a report.

Read more

11:00 AM

IndiGo to raise up to ₹3,000 crore

Budget carrier IndiGo will raise up to ₹3,000 crore through a qualified institutional placement (QIP), the company said in a filing.

The decision was taken by the board of directors of the parent company, InterGlobe Aviation Ltd.

The airline was contemplating this move last year as well, but decided to opt for sale-and-lease back (that allows airlines to sell its planes to a lessor, and then take them back on lease) to raise funds.

Read more

10:40 AM

Rupee falls 18 paise to 73.53 against US dollar in early trade

The bearish mood in stocks affects the rupee as well.

PTI reports: "The Indian rupee slumped 18 paise to 73.53 against the US dollar in opening trade on Tuesday tracking weak domestic equities and strong American currency.

Forex traders said concerns over rising COVID-19 cases also weighed on investors' sentiment.

At the interbank foreign exchange, the domestic unit opened lower at 73.47 against the dollar, and lost further ground and touched 73.53, registering a fall of 18 paise over its previous close.

On Monday, rupee had closed at 73.35 against the US dollar.

The domestic unit started on a weaker note against the dollar tracking decline in Asian shares and currencies on concerns over rising US inflation expectations, Reliance Securities said in a research note.

Most of the Asian currencies are trading weaker against the dollar and could weigh on sentiments, the note said, adding that markets will also await domestic IIP and CPI data this week.

Single day spike of 3,29,942 COVID-19 infections, 3,876 fatalities has pushed India's tally of cases to 2,29,92,517, and death toll to 2,49,992. Active COVID-19 cases in country recorded at 37,15,221, according to the Health Ministry.

In the equity market, the 30-share BSE Sensex was trading 336.74 points or 0.68 per cent lower at 49,165.67. Similarly, the broader NSE Nifty slipped 97.10 points or 0.65 per cent to 14,845.25.

Foreign institutional investors (FIIs) remained net buyers in the capital markets, as they purchased shares worth Rs 583.69 crore on Monday, as per provisional data.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.03 per cent at 90.23.

Brent crude futures, the global oil benchmark, were down by 0.67 per cent to USD 67.86 per barrel."

10:20 AM

What we know about the Indian variant as coronavirus sweeps South Asia

An explainer on the new virus variant.

Reuters reports: "India has recorded the world's sharpest spike in coronavirus infections this month, with political and financial capitals New Delhi and Mumbai running out of hospital beds, oxygen and medicines.

Scientists are studying what led to the unexpected surge, and particularly whether a variant of the novel coronavirus first detected in India is to blame. The variant, named B.1.617, has been reported in 17 countries, raising global concern. Here are the basics:



The B.1.617 variant contains two key mutations to the outer "spike" portion of the virus that attaches to human cells, said senior Indian virologist Shahid Jameel.

The World Health Organization (WHO) said the predominant lineage of B.1.617 was first identified in India last December, although an earlier version was spotted in October 2020.

On May 10, the WHO classified it as a "variant of concern," which also includes variants first detected in Britain, Brazil and South Africa. Some initial studies showed the Indian variant spreads more easily.

"There is increased transmissibility demonstrated by some preliminary studies," Maria Van Kerkhove, WHO's technical lead on COVID-19, said, adding it needs more information about the Indian variant to understand how much of it is circulating.



It's hard to say.

Laboratory-based studies of limited sample size suggest potential increased transmissibility, according to the WHO.

The picture is complicated because the highly transmissible B.117 variant first detected in the UK is behind spikes in some parts of India. In New Delhi, UK variant cases almost doubled during the second half of March, according to Sujeet Kumar Singh, director of the National Centre for Disease Control. The Indian variant, though, is widely present in Maharashtra, the country's hardest-hit state, Singh said.

Prominent U.S. disease modeller Chris Murray, from the University of Washington, said the sheer magnitude of infections in India in a short period of time suggests an "escape variant" may be overpowering any prior immunity from natural infections in those populations.

"That makes it most likely that it’s B.1.617," he said. But Murray cautioned that gene sequencing data on the coronavirus in India is sparse, and that many cases are also being driven by the UK and South African variants.

Carlo Federico Perno, Head of Microbiology and Immunology Diagnostics at Rome's Bambino Gesù Hospital, said the Indian variant couldn't alone be the reason for India's huge surge, pointing instead to large social gatherings.

Prime Minister Narendra Modi has been criticised for allowing massive political rallies and religious festivals which have been super-spreader events in recent weeks.



One bright spot is that vaccines may be protective. White House chief medical adviser Anthony Fauci said that preliminary evidence from lab studies suggest Covaxin, a vaccine developed in India, appears capable of neutralizing the variant.

Public Health England said it was working with international partners but that there is currently no evidence that the Indian variant and two related variants cause more severe disease or render the vaccines currently deployed less effective.

"We don't have anything to suggest that our diagnostics, our therapeutics and our vaccines don't work. This is important," said Van Kerkhove at WHO."

10:00 AM

IP waiver will not boost vaccine production: OPPI

The Organisation of Pharmaceutical Producers of India (OPPI) on Monday said waiving intellectual property rights will not lead to increased production of COVID-19 vaccines, as it is not the barrier to their adequate availability in India.

A proposal moved by India and South Africa before the World Trade Organisation (WTO) to temporarily suspend trade-related aspects of intellectual property rights for the COVID-19 vaccines to increase their access amid the pandemic has gained support across a number of countries, including the U.S.

Vaccine manufacturing is a complex process and scaling up capacities involves the transfer of critical know-how, it added.

Read more

9:30 AM

Indian shares follow Asia lower as U.S. inflation worries rise

A drop in values for stocks.

Reuters reports: "Indian shares fell on Tuesday after four straight sessions of gains, dragged down by losses in financial and metal stocks, as Asian peers retreated on worries that accelerating U.S. inflation could lead to interest rate hikes sooner than expected.

The NSE Nifty 50 index fell 0.91% to 14,806.65 by 0351 GMT, while the S&P BSE Sensex dropped 0.91% to 49,051.58. The blue-chip indexes have gained around 3% and 2.5%, respectively, over the last four sessions.

Asian shares dipped on Tuesday following a weak close on Wall Street overnight as U.S. inflation expectations surged to their highest in a decade as the economy reopens from COVID-19-related shutdowns.

In Mumbai, the Nifty Bank index slid 1.6%, with top private-sector lender HDFC Bank declining 1.8%, while the Nifty Metal index dropped 3% after a four-day rally to record highs.

Meanwhile, with coronavirus infections and deaths holding close to record daily highs as of Monday, calls have increased for a national lockdown. The World Health Organization has classified the virus variant first identified in India last year as a variant of global concern."

This article is closed for comments.
Please Email the Editor

Printable version | Jun 13, 2021 3:07:46 PM |

Next Story