The Nifty and the Sensex opened the day on a positive note, hitting fresh highs as investors remained buoyed by the economic recovery.
Join us as we follow the top business news through the day.
The rise of Tesla in 2020
Sensex, Nifty capture new heights on positive global cues
Stocks hit fresh record highs.
PTI reports: "Equity benchmarks Sensex and Nifty raced to new peaks on Wednesday as participants took note of continuously improving macroeconomic indicators and positive trends in global markets.
The BSE Sensex settled 403.29 points or 0.87 per cent higher at 46,666.46, while the NSE Nifty climbed 114.85 points or 0.85 per cent to 13,682.70 -- record closing for both the benchmarks.
Both the indices also marked their all-time intra-day highs of 46,704.97 and 13,692.35, respectively.
In the Sensex pack, HDFC, ONGC, Bharti Airtel, Titan, Asian Paints, Mahindra and Mahindra and TCS were the prominent gainers.
On the other hand, ICICI Bank, IndusInd Bank, NTPC, UltraTech Cement, Tech Mahindra and SBI were among the major laggards.
Asian bourses closed broadly higher amid hopes that COVID-19 vaccines and economic stimulus by governments around the world will revive economic growth.
Market experts said Indian equities continued to trade at record high levels, gaining confidence from improving domestic macroeconomic indicators and positive global market outlook.
SBI in a research report said India’s GDP growth is expected at (-) 7.4 per cent in FY21 on better-than-projected recovery, upgrading its earlier forecast of (-) 10.9 per cent.
S&P Global Ratings on Tuesday raised India’s growth projection for the current fiscal to (-) 7.7 per cent from (-) 9 per cent estimated earlier on rising demand and falling COVID-19 infection rates.
On the forex market front, the Indian rupee settled 5 paise higher at 73.58 against the US dollar.
Brent crude futures, the global oil benchmark, rose 0.47 per cent to USD 50.93 per barrel."
Cabinet approves next round of spectrum auction
The Union Cabinet has approved the next round of spectrum auction, Information and Broadcasting Minister Prakash Javadekar said on Wednesday.
The minister said that the cabinet has approved relief for sugarcane farmers, improvement in electricity infrastructure in North Eastern states and the auction of spectrum.
The Digital Communications Commission, the apex decision making body of the Department of Telecom, in May approved the spectrum auction plan subject to the cabinet approval.
The DoT is yet to come out with any notification for the next round of auction in which airwaves worth ₹ 5.22 lakh crore are to be sold.
According to Jio, spectrum worth ₹ 3.92 lakh crore is lying unused with the DoT for auction.
Jio fastest network in 4G download speed; Vodafone in upload in Nov: Trai data
The battle between the telcos.
PTI reports: "Reliance Jio topped the 4G speed chart with data download rate of 20.8 megabit per second (Mbps), while Vodafone was ahead of others in upload speed at 6.5 Mbps in November, according to the latest data update of telecom regulator Trai.
Jio recorded more than double the download speed of its closest competitor Vodafone.
Though, Vodafone and Idea Cellular have merged their mobile business as Vodafone Idea Limited, the Telecom Regulatory Authority of India (Tri) is still releasing separate network speed data of both the entities.
Vodafone recorded download speed of 9.8 Mbps in November, according to Trai’s data updated on December 10. It was followed by Idea and Bharti Airtel with download speed of 8.8 Mbps and 8 Mbps, respectively.
Vodafone topped the chart in the upload segment with network speed of 6.5 Mbps. It was followed by Idea with upload speed of 5.8 Mbps, Airtel 4 Mbps and Jio 3.7 Mbps.
The download speed helps consumers in accessing content from the internet while upload speed helps them in sending or sharing pictures, video etc to their contacts.
The average speed is computed by Trai based on the data it collects across India with the help of its MySpeed application on a real-time basis."
EPFO settles 52 lakh COVID-19 claims, disburses Rs 13,300 crore: Gangwar
An update on PF money disbursed by the government since the lockdown.
PTI reports: "Retirement fund body EPFO has settled 52 lakh COVID-19 non-refundable advance claims, and disbursed Rs 13,300 crore so far, Labour Minister Santosh Gangwar said on Wednesday.
In March, the government had allowed over 6 crore subscribes of EPFO to withdraw an amount not exceeding their three months basic pay and dearness allowance from their EPF account in view of the lockdown to fight the pandemic.
Speaking at Assocham Foundation Week programme, Gangwar said EPFO has settled 52 lakh COVID-19 withdrawal claims and disbursed Rs 13,300 crore to subscribers during the pandemic.
He noted that the country has faced the pandemic with brave face.
The Centre had launched the Pradhan Mantri Garib Kalyan Yojana (PMGKY) on March 26 to help the economically weaker sections cope with the pandemic.
A provision for withdrawal from the EPF Scheme was announced by the government and an urgent notification issued, providing for non-refundable withdrawal to the extent of basic wages and DA for three months or up to 75 per cent of the amount standing to member’s credit in the EPF account, whichever is less.
On the implementation of labour codes, he asked the industry representatives to provide their feedback on the draft rules of three labour codes on industrial relations, social security and occupational health safety & working conditions.
The ministry has circulated the draft rules on these labour codes to seek feedback of stakeholders. These three codes were passed in monsoon session of Parliament this year.
The labour code on wage was passed by Parliament in 2019. The rules on that have already firmed up.
The government intends to implement all the four codes in one go from April 1, 2021."
WhatsApp to help users in India buy ‘sachet-sized’ health insurance by year-end
WhatsApp extends its foray into India.
PTI reports: "WhatsApp on Wednesday said it expects to facilitate the purchase of “affordable sachet-sized” health insurance through its platform by the end of the year as part of its efforts to provide users in India with greater access to financial solutions.
The Facebook-owned company noted that its ‘Payments’ feature is now available to users across the country (currently up to 20 million users) with support from banking partners - State Bank of India, HDFC, ICICI and Axis Bank.
“WhatsApp is deeply committed to India with over 400 million active users, this is our largest market. Our primary focus will always be to provide the most simple, reliable, private and secure experience for people to connect with each other. However, in India we are also building on four other pillars,” WhatsApp India Head Abhijit Bose said at the Facebook Fuel for India 2020 event.
He added that WhatsApp wants to help further digitise and scale the small business ecosystem of India, make it easier for consumers to connect with and buy from their favourite businesses, and build digital payments across all segments, especially for underserved users in India.
It will also continue to deepen its investments in India by developing and scaling social impact programs, he said.
“WhatsApp has proactively been working on several pilots to help ensure that every adult has access to the most basic critical financial and livelihood services through their mobile device. By the end of this year, we expect that people will be able to buy affordable sachet sized health insurance through WhatsApp,” Bose said.
He added that these pilots, along with others in sectors like edu-tech and agri-tech, would help support the government’s focus on a more digitised economy, especially for rural and underserved segments.
In a statement, WhatsApp said by the end of this year, buying affordable health insurance coverage from SBI General leveraging WhatsApp, will be a reality.
Similarly, with HDFC Pensions and pinBox solutions, WhatsApp will be leveraged to help enable savings for retirement that will be especially beneficial for people who do not have organised employment benefits or a retirement corpus to fall back on.
WhatsApp has designed its payments feature on National Payments Corporation of India’s (NPCI) Unified Payment Interface (UPI) system and was granted approvals to go live recently in November this year on a peer-to-peer (P2P) basis enabling people to transfer money.
“We have been approved to launch payment services using UPI, which is truly a revolutionary platform from India, which I believe will become a template for the world,” he said.
Last month, Facebook-owned WhatsApp received approval from NPCI for rolling out its payments services in India. In 2018, WhatsApp started testing its UPI-based payments services in India -- a global first -- with about a million users.
Following the NPCI approval, WhatsApp has started its payments service in the country in a “graded” manner, starting with a maximum registered user base of 20 million in UPI.
WhatsApp -- which counts India as its biggest market with over 400 million users -- will compete with players like Paytm, Google Pay, Walmart-owned PhonePe and Amazon Pay in the country.
Bose said while developing WhatsApp Pay, it put huge efforts to ensure its safety.
“As a result, WhatsApp Pay is secure and highly reliable, and making sure that your life’s capital is safe,” he said."
P-notes investments touch 27-month high of Rs 83,114 crore in Nov
Something that could explain the stock market rally.
PTI reports: "Investments through participatory notes (P-notes) in the Indian capital market surged to a 27-month high of Rs 83,114 crore at November-end driven by continued liquidity and improvement in second quarter corporate earnings.
P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly. They, however, need to go through a due diligence process.
According to Securities and Exchange Board of India (Sebi) data, the value of P-note investments in Indian markets -- equity, debt and hybrid securities -- increased to Rs 83,114 crore at November-end from Rs 78,686 crore at October-end.
This was the highest level of investment since August 2018, when fund inflow through such route stood at Rs 84,647 crore.
The investment through this route had declined to Rs 69,821 crore at the end of September 2020.
Prior to that, the investment level was at Rs 74,027 crore, Rs 63,228 crore, Rs 62,138 crore, Rs 60,027 crore and Rs 57,100 crore at the end of August, July, June, May and April, respectively.
The investment level had fallen to an over 15-year-low of Rs 48,006 crore at the end of March amid significant volatility in broader markets on concerns over the coronavirus-triggered crisis.
Of the total Rs 83,114 crore invested through this route till November, Rs 72,910 crore was invested in equities, Rs 10,009 crore in debt and Rs 196 crore in hybrid securities.
Divam Sharma, co-founder of Green Portfolio said P-notes investments could be attributed to continued liquidity from low bond yields, accommodative stance of central banks globally and improvement in performance from companies in the second quarter.
In addition, positive developments related to COVID-19 vaccines and better indications from data like IIP, PMI have created positive stance for overseas investors.
Besides, the assets under the custody of FPIs have reached to Rs 38.51 lakh crore, which is the highest levels in the history validating their conviction on Indian markets. This was Rs 34.36 lakh crore at October-end.
Meanwhile, FPIs infused nearly Rs 63,000 crore in the capital markets across equity, debt and hybrid instruments last month. This included Rs 60,350 crore in equities alone.
Green Portfolio’s Sharma said that Indian equities have lured the highest inflows in November as compared to its peers in Asian markets including South Korea and Taiwan."
FY21 GDP to contract at 7.4% on better recovery: SBI report
GDP projections continue to be revised upward.
PTI reports: "India’s GDP growth is expected to be at (-) 7.4 per cent in FY21 on better than projected recovery, said a SBI research report, upgrading its earlier forecast of (-) 10.9 per cent.
The report also believes that it would take seven quarters from the fourth quarter of FY21 for GDP to reach the pre-pandemic level in nominal terms.
“We now expect GDP decline for the full year (FY21) to be in single digits at 7.4 per cent (compared to our earlier prediction of (—) 10.9 per cent), aligned with RBI and markets’ revised forecasts post Q2,” SBI said in its research report - Ecowrap.
It said the revised GDP estimates are based on SBI ‘Nowcasting Model’ with 41 high frequency indicators associated with industry activity, service activity, and global economy.
Based on this model, the forecasted GDP growth for third quarter would be around 0.1 per cent (with downward bias), it said.
Out of the 41 high frequency leading indicators, 58 per cent are showing acceleration in the third quarter.
Apart from Q3 FY21, the Q4 growth will also be in positive territory (at 1.7 per cent). However, all projections are conditional on the absence of another wave of infections, the report said.
The research report forecast FY22 GDP growth to be at 11 per cent, primarily due to base effect.
The report said it will take almost seven-quarters from Q4 FY21 to reach the pre-pandemic level in nominal terms and there will be a permanent output loss of around 9 per cent of GDP.
It further said even as growth outlook has improved, the decline in government expenditure has been quite significant to Rs 3.62 lakh crore in Q2 FY21 from Rs 4.86 lakh crore in Q1 FY21.
“We believe that a large part of fiscal expenditure by the government has been indirect and are off balance sheet items. This gives us hope that the government might be able to spend in Q4 to resurrect growth further,” it said.
The research report has revised its fiscal deficit estimates for FY21 at 8 per cent of GDP."
M&M shares jump 4% as Co to hike prices of passenger, commercial vehicles from January
A price hike boosts investor sentiments.
PTI reports: "Shares of Mahindra & Mahindra (M&M) gained nearly 4 per cent in early trade on Wednesday after the firm said it will hike prices of its entire range of passenger and commercial vehicles from next month to partially offset the impact of rise in input costs.
The stock jumped 3.80 per cent to Rs 745.55 on the BSE.
At the NSE, it gained 3.94 per cent to Rs 746.25.
Effective January 1, the company will increase the prices of its range of passenger and commercial vehicles, across models, the Mumbai-based automaker said in a statement on Tuesday.
This has been necessitated due to the increase in commodity prices and various other input costs, it added.
Details of price increase across different models will be communicated in due course, the automaker, which sells models like Thar and Scorpio, said."
upGrad acquires Rekrut
upGrad, which is into online technology for higher education has acquired 100% stake in Rekrut India, a recruitment and staffing solutions company for an unspecified amount. “Rekrut will now open the floodgate of career opportunities for upGrad learners.
“This move is integrally aligned with our company’s vision of powering career success for every member of the global workforce as their trusted lifelong learning partner,” upGrad co-founders Ronnie Screwvala, Mayank Kumar and Phalgun Kompalli said in a statement.
Hedge fund leverage near record high levels
Rupee surges 15 paise to 73.48 against US dollar in early trade
The opening in the rupee mirrored that of stocks.
PTI reports: "The rupee appreciated 15 paise to 73.48 against the US dollar in opening trade on Wednesday as sustained foreign fund inflows and hectic buying domestic equities strengthened investor sentiment.
Traders said the weakness of the American currency in the overseas market also supported the domestic unit.
At the interbank forex market, the domestic unit opened at 73.49 against the greenback, then inched higher to touch 73.48, registering a rise of 15 paise over its previous close.
On Tuesday, the Indian rupee depreciated by 8 paise to settle at 73.63 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.03 per cent lower at 90.44.
“The US dollar continued to struggle near the 2-year lows as risk appetite improved supported by vaccine roll-out expansion and hopes of passage of a massive US stimulus aid this week,” Reliance Securities said in a research note.
Traders said some depreciation can be expected during the day as market participants await the conclusion of the US Fed meeting.
“Asian currencies were weak this Wednesday morning and could cap gains for the domestic unit,” Reliance Securities said adding that “additionally, the Reserve Bank could be present in the markets to cap gains“.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 274.76 points higher at 46,537.93, and the broader NSE Nifty advanced 75 points to 13,642.85.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,484.09 crore on a net basis on Tuesday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 0.22 per cent to USD 50.65 per barrel."
SIP inflows hit 31-month low at ₹7,302 crore in November
Investment in mutual funds through systematic investment plans dropped to a 31-month low of ₹7,302 crore in November amid a challenging economic environment.
However, investment through Systematic Investment Plans (SIPs) had risen in October after six months of continuous decline.
The 44-player mutual fund industry witnessed an inflow to the tune of ₹7,302 crore through SIPs in November compared with ₹7,800 crore in the preceding month, data from the Association of Mutual Funds in India showed. This was the lowest since April 2018, when investments via SIP clocked ₹6,690 crore.
Net addition of SIP accounts stood at 3.39 lakh in November. Fund collection through SIP was ₹7,788 crore in September and ₹7,791 crore in August.
It had dropped below the ₹8,000 crore-mark in June to ₹7,917 crore. Marketmen said SIP investments had fallen because investors wanted to maintain some liquidity as the situation was uncertain when it came to their jobs and businesses.
Shares hit record highs on Mahindra and Mahindra boost
Another fresh high for stocks.
Reuters reports: "Indian shares scaled record highs on Wednesday after ending flat in the previous session, powered by gains in automaker Mahindra and Mahindra and optimism over the roll-out of COVID-19 vaccines.
The blue-chip NSE Nifty 50 index rose 0.65% to 13,655.40 by 0348 GMT and the benchmark S&P BSE Sensex firmed 0.68% to 46,577.04. Including Wednesday, both the indexes have now hit record highs in 17 of 25 sessions.
The country's equities have posted six straight weekly gains, boosted by record inflows from foreign institutional investors, progress on COVID-19 vaccines globally, and signs of a nascent economic recovery in the country.
Ratings agency Standard and Poor's on Tuesday projected India's real gross domestic product for the current fiscal year to shrink 7.7%, compared with the 9% contraction it expected earlier.
Automaker Mahindra and Mahindra rose 2.5% on Wednesday and was the top percentage gainer on the Nifty 50.
The company said on Tuesday it would increase the price of its passenger and commercial vehicle models from January.
Broader Asian markets were also higher, with MSCI's broadest index of Asia Pacific shares outside of Japan rising 0.6%."
Govt. must unveil stimulus to spur demand: MPs’ panel
The Parliamentary Standing Committee on Industry has asked the government to announce a stimulus package focused on generating demand, stressing that its responses so far have focused only on the supply side.
The panel has also asked for GST rates levied on automobiles to be rationalised from the present 28% tax rate with an additional compensation cess ranging from 1-22%, to 18%, to spur demand for new vehicles and help the sector overcome the present slump.
In its report on ‘Downturn in Automobile Sector – Its Impact and Measures for Revival’ submitted on Tuesday, the committee headed by Rajya Sabha MP K. Keshava Rao, pointed out that the cost of BS-VI vehicles was expected to be 10-15% higher due to upgraded technology, which could be mitigated by reducing the GST rate to 18% from 28%.
