Today's top business news: Shares end day flat, Bitcoin soars to all-time high after BNY Mellon announces crypto venture, ArcelorMittal announces $1 billion fixed cost-reduction, and more

Riding high on the bullish investor sentiment, the market capitalisation of BSE-listed companies reached a record ₹ 2,00,47,191.31 crore at close of trade.   | Photo Credit: PTI

The benchmark stock indices opened the day on a flat note as index heavyweights failed to impress.

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

4:30 PM

Microsoft launches new hybrid cloud solution in India

Microsoft on Thursday launched a new hybrid cloud solution in India for organisations to build and run cloud-native applications with seamless access to on-premise cloud services with existing tool, processes, and skillsets.

Azure Stack hyperconverged infrastructure (HCI), the new addition to the Azure Stack portfolio is compatible with both Windows and Linux virtual machines, and will be available from 20 partners offering Microsoft-validated hardware systems.

“The role of hybrid cloud has transformed from being integrator of datacentres with the public cloud to enabler of day-to-day business functions,” Microsoft India COO Rajiv Sodhi, said in a statement. “Consistent hybrid tools and experiences have never been more important and Azure Stack HCI brings together the familiarity and flexibility of on-premises virtualisation with powerful new hybrid capabilities.”

Azure Stack HCI combines infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) services in a software stack that spans on-premises datacentres and Microsoft’s Azure cloud, providing the latest and up to date security, performance, and feature updates.

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4:00 PM

Markets end flat after choppy trade; ICICI Bank shines

A dull day for the indices.

PTI reports: "Equity benchmarks Sensex and Nifty ended flat after choppy trade on Friday, tracking weak cues from global markets.

The 30-share BSE Sensex gyrated 543.96 points before closing 12.78 points or 0.02 per cent higher at its new closing record of 51,544.30.

The broader NSE Nifty, however, slipped 10 points or 0.07 per cent to 15,163.30.

ICICI Bank was the top gainer in the Sensex pack, rising over 2 per cent, followed by Axis Bank, Infosys, HDFC twins, Bajaj Finserv and SBI.

On the other hand, ITC, ONGC, Sun Pharma, Bharti Airtel and Titan were among the laggards.

According to Anand James, Chief Market Strategist at Geojit Financial Services, risk appetite trickled down and equities pared gains with several cities across globe entering fresh lockdowns.

"Indian equities were in the green in the first half with Bank Nifty rising over 1 per cent, but VIX rose in the second half, and traders opted cut down long bets across sectors, going into the weekend," he said.

Elsewhere in Asia, most bourses remained closed for holidays.

Stock exchanges in Europe were trading on a negative note in mid-session deals.

Meanwhile, the global oil benchmark Brent crude was trading 0.72 per cent lower at USD 60.70 per barrel."

3:30 PM

Lufthansa terminates services of 103 India-based flight attendants

Lufthansa has terminated the services of 103 India-based flight attendants after they allegedly sought “job assurance” from the management while the German airlines group had offered them leave without pay option for two years, sources close to the developments said.

These employees had been working on a fixed-term contract with the airline and some of them were with the carrier for more than 15 years, the sources added.

In a statement to PTI, a Lufthansa spokesperson said that severe financial impact of the coronavirus pandemic leaves it with no choice but to restructure the airline and as part of that “it will not be extending the fixed-term employment contracts of its Delhi-based flight attendants”.

However, Lufthansa did not provide details on the number of flight attendants who have been terminated.

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3:00 PM

ArcelorMittal announces USD 1 bn fixed cost-reduction programme; to cut 20% staff

Restructuring at a major steel plant.

PTI reports: "Global steel giant ArcelorMittal has announced a USD 1 billion fixed cost-reduction programme under which the company would be reducing 20 per cent of its corporate office employees by 2022.

ArcelorMittal is the world's leading steel and mining company, with a presence in 60 countries and primary steel making facilities in 17 countries. It employs around 190,000 people.

In an update for the October-December quarter of 2020 and full year 2020, ArcelorMittal said the USD 1 billion structural fixed cost-reduction plan aims to maintain competitiveness in the post COVID-19 environment.

The plan includes 20 per cent reduction in corporate office headcount, reducing contactors, reallocation of resources etc, the company said.

At the onset of the COVID-19 pandemic, a fundamental part of the company's response was to align costs to the lower activity level. The comprehensive measures taken to "variabilise" fixed costs were critical to protecting profitability and cash flows.

Throughout this period, the company sought to identify and develop options for structural cost improvements to appropriately position the fixed cost base for the post-COVID-19 operating environment.

These actions, the company said, were necessary to protect profitability in an exceptionally low volume environment. It is these actions, and the learnings from them, that underpin the company's new USD 1 billion structural fixed cost-improvement plan.

"These savings implemented are expected to limit the increase in fixed costs as activity and production levels recover, thus leading to lower fixed costs per tonne. In total, USD 1.0 billion of structural cost improvements are identified within the program, with the majority of savings expected in FY 2021 and fully realized in FY 2022 relative to scope-adjusted FY 2019," it said in the update issued on Thursday.

The company has already implemented a footprint optimization, including the permanent closure of a blast furnace and steel plant in Krakow (Poland), the permanent closure of the Florange coke oven battery and the closure of the Saldanha facility in South Africa.

Actions in repairs and maintenance are expected to provide approximately 35 per cent of the savings, as the company reduces contractors through insourcing and the reallocation of internal resources.

"Selling, general and administrative expenses (SG&A) is expected to account for approximately 25 per cent of the savings including a 20 per cent reduction in corporate office headcount, digital transformation and leveraging of shared services and centers of excellence," the company said.

Productivity and logistics related actions are expected to provide approximately 40 per cent of the retained savings through continuous improvement programmes, improvements in productivity and maintenance efficiency and the rationalization of support functions, it said.

ArcelorMittal further said as activity levels normalize and volumes recover, these structural improvements will have a net benefit to the company's fixed cost base and lead to gains in fixed cost per tonne."

2:30 PM

Just 270 crypto addresses laundered $1.3 bln in dirty funds last year, research shows

Criminals are using a small group of cryptocurrency brokers and services to launder hundreds of millions of dollars of dirty virtual money, research shared with Reuters showed on Thursday.

Just 270 cryptocurrency addresses, many connected to over-the-counter brokers, received $1.3 billion in illicit digital coins last year - some 55% of all criminal crypto flows identified by U.S. blockchain researcher Chainalysis.

A cryptocurrency address is a set of random letters and numbers that represents a location on a virtual network. Bitcoin, for instance, can be sent from a particular address to others on its network.

The illegal use of cryptocurrencies has long worried regulators and law enforcement, with U.S. Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde both calling for tighter oversight last month.

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2:00 PM

Petrol price crosses Rs 88-mark in Delhi, diesel breaches Rs 85 in Mumbai

A new high for fuel prices.

PTI reports: "Petrol and diesel prices soared to record highs on Friday after rates were hiked for the fourth day in a row.

Petrol price was increased by 31 paise per litre and diesel by 35 paise a litre, according to a price notification of state-owned fuel retailers.

This took petrol price to an all-time high of Rs 88.14 a litre in Delhi and to Rs 94.64 in Mumbai.

Diesel rates rose to Rs 78.38 per litre in the national capital and to an all-time high of Rs 85.32 in Mumbai.

In four days, prices have gone up by Rs 1.21 per litre for petrol, while diesel has risen by Rs 1.25 a litre.

Oil Minister Dharmendra Pradhan on Wednesday had told Parliament that the government is not considering a reduction in excise duty to cool rates from their record highs.

Rates have risen as international oil prices touched USD 61 per barrel for the first time in more than a year on improving demand outlook amid the global rollout of COVID-19 vaccines, he had said.

Central and state taxes make up for over 61 per cent of the retail selling price of petrol and about 56 per cent of diesel.

Retail petrol rates have risen by Rs 18.57 per litre since mid-March 2020, after the government raised taxes by a record margin to mop up gains arising from fall in international oil prices. Diesel rates have gone up by Rs 16.09."

1:30 PM

India rice rates remain at 3-year peak on strong export demand

Rice export prices in India, the top exporter of the staple, remained anchored near a three-year high this week as other Asian and African buyers continued purchases, shrugging off the uptick in rates in recent weeks.

India’s 5% broken parboiled variety was quoted at $402-$408 per tonne this week, unchanged from last week, which was the highest since May 2018.

“In the last two weeks prices have gone up, but buyers are still making decent purchases,” said an exporter based at Kakinada in Andhra Pradesh.

Andhra Pradesh will use a deepwater port to export rice for the first time in decades amid a global shortage of the grain, according to a government order seen by Reuters, which could raise shipments this year by a fifth.

A revision to neighbouring Bangladesh’s import policy in part helped lift global rice prices to a seven-month high in January, according to the latest report of Food and Agricultural Organisation (FAO).

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1:00 PM

Oil's losses deepen as OPEC, IEA caution ends rally

More pain for oil investors.

Reuters reports: "Oil prices fell a second day on Friday, extending losses after OPEC cut its demand forecast and the International Energy Agency said the market was still over-supplied.

Brent crude was down 47 cents, or 0.8% at $60.67 a barrel by 0309 GMT, having dropped half a percent the previous session. U.S. oil was down 53 cents, or 0.9% at $57.71 a barrel, after falling by 0.8% on Thursday.

Both benchmarks closed on Wednesday at their highest levels since January 2020 after a nearly record-setting run of consecutive daily gains.

Oil prices have risen over the last few weeks as OPEC and other producers in the group known as OPEC+ cut production, while Saudi Arabia also promised unilateral reductions in output that started this month.

"OPEC production is likely to fall this month led by declines in Saudi Arabia and Libya. This should deepen the global market deficit and support prices," said Capital Economics.

Before the declines, U.S. crude's relative strength index was at the most overbought level since the second Iraq war, said Bob Yawger, director of energy futures at Mizuho Securities.

"There are some signs that the market is setting up for a pullback," he said. Oil demand around the world in 2021 will recover more slowly than earlier thought, the Organization of the Petroleum Exporting Countries (OPEC) said.

Previously, the International Energy Agency (IEA) said oil supply was still outstripping demand globally, although COVID-19 vaccines are expected to help demand recover.

 

U.S. crude inventories dropped unexpectedly last week, declining by more than 6 million barrels as refiners increased output to pre-pandemic levels, according to the Energy Information Administration.

Analysts in a Reuters poll had forecast a rise of nearly 1 million barrels.

Still, gasoline inventories increased more than expected, gaining by 4.3 million barrels in the last week, against forecasts of a 1.8 million rise.

Gasoline demand over the last four weeks is 10% below the same time last year."

12:30 PM

SC upholds validity of e-voting for winding up of six mutual fund schemes of Franklin Templeton

The Supreme Court on Friday upheld the validity of e-voting process for winding up of six mutual fund schemes of Franklin Templeton, and said disbursal of funds to unit holders will continue.

A bench of justices S.A.Nazeer and Sanjiv Khanna, while rejecting the opposition by some unit holders to the e-voting process, said disbursal of funds has to be done as per the earlier order of the apex court.

The top court had on February 2 ordered that ₹9,122 crore be disbursed within three weeks to the unit holders of Franklin Templeton's six mutual fund schemes which are proposed to be wound up.

It had said that disbursal of money would be done in proportion to unit holders' interest in the assets.

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12:00 PM

Ashok Leyland tanks 8% after Q3 net loss

A poor quarter for the heavy automobiles manufacturer.

PTI reports: "Shares of Ashok Leyland on Friday tumbled 8 per cent after the company reported a net loss of Rs 19 crore for the third quarter ended December 31, 2020.

The stock tanked 8 per cent to Rs 124.10 on BSE.

On NSE, it plunged 6.77 per cent to Rs 125.90.

The company had reported a net profit of Rs 28 crore in October-December quarter of 2019-20.

The revenues for the third quarter on a standalone basis stood at Rs 4,814 crore as compared with Rs 4,016 crore in the year-ago period, Ashok Leyland said in a statement.

The company said its domestic light commercial vehicle (LCV) volumes during the third quarter stood at 15,991 units, up 3 per cent from 12,574 units in the same period of previous fiscal.

Export volumes during the period under review stood at 2,941 units, up 24 per cent from 2,371 units in October-December period of 2019-20."

11:30 AM

Bitcoin soars to all-time high after BNY Mellon announces crypto venture

Bitcoin on Thursday jumped to a fresh all-time high after BNY Mellon said it formed a new unit to help clients hold, transfer, and issue digital assets.

The new unit at BNY Mellon is expected to roll out the offerings later this year, the bank said.

Bitcoin hit a record high of $48,481.45 earlier on Thursday and was last up 6.9% at $47,932. The largest virtual currency in terms of market capitalization has gained about 66% so far this year and soared roughly 1,200% since mid-March 2020.

The BNY Mellon announcement came just days after Elon Musk's Tesla revealed it had bought $1.5 billion worth of the cryptocurrency and would soon accept it as a form of payment for its cars.

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11:00 AM

SoftBank pulls out of Latin America partnership with Oyo Hotels

Another setback for the Indian startup.

Reuters reports: "The Latin American unit of Indian hotel startup Oyo Corp has ended its joint venture with the SoftBank Latin America Fund, less than six months after they struck a partnership in the region, both companies said on Thursday.

Oyo's business in Latin America, known as Oyo Latam, on Wednesday said it was moving to a digital-only model, and that the changes would require laying off nearly its entire staff.

SoftBank Group has poured $75 million into Oyo in Latin America, part of its more than $1 billion investment in the parent company.

Although hotels in the region can still operate under Oyo's brand, operations will now be managed directly from Oyo's home base in India, an Oyo Latam spokeswoman told Reuters.

"The Latin American joint venture (with SoftBank) has ceased to exist," she said, adding that did not mean Oyo was completely shutting down in the region. "It was another adaptation due to the pandemic," she said.

Japan-based SoftBank added the decision was made jointly with Oyo due to challenges brought about by the coronavirus pandemic, and that it would no longer invest in the company in the region.

In September, Reuters reported that SoftBank was taking a more direct role in the virus-hit hospitality startup through a joint venture in Latin America to manage roughly 1,000 hotels.

Oyo has struggled across its markets worldwide as the coronavirus crisis pummeled the tourism industry, and has drastically scaled back its workforce."

10:40 AM

Rupee gains 10 paise to 72.77 against US dollar in early trade

A decent start to the day for the rupee.

PTI reports: "The rupee appreciated by 10 paise to 72.77 against the US dollar in opening trade on Friday supported by positive domestic equities and sustained foreign fund inflows.

At the interbank forex market, the local unit opened at 72.79 against the US dollar, then inched higher to 72.77 against the greenback, registering a rise of 10 paise over its previous close.

On Thursday, the rupee had settled at 72.87 against the American currency.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.07 per cent to 90.48.

"The US dollar Index has started flat this morning in Asian trade as the markets look to fresh triggers in the market. Upside remained limited as new signs of weakness in the US jobs market dented investor expectations about the pace of a pandemic recovery," Reliance Securities said in a research note.

Market participants will be keeping an eye on inflation and industrial production numbers and better-than-estimate numbers could extend gains for the currency, forex traders said.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 94.63 points higher at 51,626.15, and the broader NSE Nifty advanced 24.45 points to 15,197.75.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 944.36 crore on Thursday, according to exchange data.

Brent crude futures, the global oil benchmark, fell 0.62 per cent to USD 60.76 per barrel."

10:20 AM

Airfares raised, to be in force till March 31

Air travel has become costlier, with the Union government on Thursday increasing the minimum and maximum fares an airline can levy on a given route.

The minimum fare on a route has gone up by 10% and the maximum by nearly 30%, according to the order issued by the Civil Aviation Ministry. The revised fares come into effect immediately.

The government has been regulating airfares from May 25, 2020, when domestic flights resumed after the nationwide lockdown. There are seven fare bands, which vary according to the duration of a flight.

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10:00 AM

Indian shares muted as Infosys gains, ITC slides

A slow start to the day for stocks.

Reuters reports: "Indian shares were little changed on Friday as Infosys and other IT services stocks gained after having lagged the broader market for much of this month, while ITC slid after a lacklustre earnings report.

India's stock benchmarks have climbed more than 11% this month after a range of positive developments, including a high-spending federal budget, strong corporate earnings, and progress on COVID-19 vaccinations.

The NSE Nifty 50 index was up 0.04% at 15,180.00 by 0430 GMT, while the S&P BSE Sensex rose 0.08% to 51,572.31.

The Nifty IT index, tracking India's software services firms, was up 1%, rising the most among 14 sectoral indexes. Up to Thursday's close, the index had gained only about 5% in February, a month in which the Nifty 50 and most other sectors have seen double-digit gains.

"We are seeing sectoral rotation, which is part of a bull market ... IT has done well already, but after a pause, it is rallying again," said A.K. Prabhakar, head of research at IDBI Capital in Mumbai.

Prabhakar added that a withdrawal by India and China of some troops from a bitterly contested border area was also aiding sentiment.

Software services giant Infosys was the top boost to the Nifty 50 with a 1.8% gain.

Cigarettes-to-hotels conglomerate ITC fell nearly 4% after it posted lower December-quarter profit.

Bayer Cropscience plunged 6.4% after reporting a quarterly loss, while conglomerate Piramal Enterprises jumped 5.7% after its quarterly profit rose.

Other Asian shares hovered just below a record high as mixed U.S. economic data caused some investors to show restraint."

9:30 AM

17 major OTT players adopt toolkit for regulation

Even as the government is soon expected to come out with regulations for OTT platforms, the Internet and Mobile Association of India (IAMAI) on Thursday said 17 platforms, including Netflix, Disney+ Hotstar and Amazon Prime Video, have adopted a ‘toolkit’ for effective implementation of the self-regulation code introduced in 2020.

The industry body added that it will also set up an ‘IAMAI Secretariat for the Code’, comprising representatives from the signatories to the Code as well as IAMAI.

This will administer the implementation of the Code and the toolkit.

Amit Goenka, Chair, Digital Entertainment Committee, IAMAI said, “This toolkit amplifies all the critical points that were addressed in the Code signed last year and aims to address feedback received from the Ministry of Information and Broadcasting, particularly on strengthening the grievance redressal mechanism. It further sets out clear tent poles that the OCCPs [Online Curated Content Provider] need to undertake to achieve a common goal of entertaining millions of Indians responsibly.”

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Printable version | Apr 15, 2021 11:42:54 AM | https://www.thehindu.com/business/businesslive-12-february-2021/article33816604.ece

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