The benchmark indices, the Nifty and the Sensex, have opened this morning with gains after yesterday's massive slump of well over 2%.
Data on fuel and vehicle sales show greenshoots that suggest economic normalcy may be returning soon.
Join us as we follow the top business news through the day.
The case for herd immunity is far from proved
Sensex rebounds 254 points; banking, metal stocks take charge
A good day for stocks after a bad day yesterday.
PTI reports: "Indian equities on Friday recovered from the massive losses suffered in the previous session, with banking, metal and IT counters leading the rally.
After fighting bouts of volatility, the BSE Sensex closed 254.57 points or 0.64 per cent higher at 39,982.98.
Intra-day, the 30-share benchmark swung over 426 points, touching the day’s peak at 40,125.71 and the lowest level at 39,700.
The NSE gauge Nifty settled 82.10 points or 0.70 per cent up at 11,762.45.
On the Sensex chart, Tata Steel, HDFC Bank, Ultratech Cement, PowerGrid, ONGC, Kotak bank and Axis Bank were among prominent gainers.
Of the 30 Sensex constituents, 24 ended with gains.
HCL Tech, Mahindra & Mahindra, Reliance Industries, Asian Paints, Nestle India and Sun Pharma suffered losses.
The rupee on Friday settled almost flat at 73.35 against the US dollar in the absence of any fresh trigger.
Global markets traded mixed amid concerns over resurgence in coronavirus cases in some parts of the world."
Uncertain pace of recovery in global auto demand may continue to weigh on Tata Motors, JLR: Moody’s
The rebound in automobile demand may not be enough to turnaround Tata Motors.
PTI reports: "Moody’s Investors Service on Friday said the uncertain pace of recovery in global auto demand will continue to weigh on Tata Motors Ltd (TML) and its wholly owned subsidiary Jaguar Land Rover Automotive Plc over the next 12-18 months.
However, the ratings agency, while keeping a negative outlook on the two firms, said support from Tata Sons mitigates operational challenges at TML and kept rating at the same level as JLR — ‘B1 negative’
It further said electrification and political developments pose further downside risk and will prolong recovery.
“We do not expect global auto shipments to recover to pre-pandemic levels until the middle of the decade, while further lockdowns, the transition to electric vehicles, emission compliance requirements and — for JLR — Brexit all pose further downside risk,” Moody’s Vice-President and Senior Credit Officer Tobias Wagner said in a statement.
Moody’s said, “TML’s underlying credit profile has deteriorated to a level weaker than JLR’s but the ratings remain the same, thanks to a one-notch uplift to reflect likely support from parent Tata Sons Ltd in times of need.”
JLR’s rating does not incorporate an uplift for likely support from parent TML due to the latter’s weaker credit quality. Still, the subsidiary remains strategically important to both TML and Tata Sons, a credit positive for the rating, it added.
Stating that it expects that TML and JLR’s financial metrics will remain in breach of rating downgrade triggers over the next 12-18 months, Moody’s said it implies that “a sustained improvement in operations is required to maintain their current ratings“.
For TML, a return in outlook to stable would require an improvement at JLR as the key contributor to consolidated credit metrics, along with a recovery in the profitability of TML’s Indian operations, it added.
Moody’s Vice-President and Senior Credit Officer Kaustubh Chaubal said TML’s credit profile previously benefited from the different demand dynamics in its JLR and non-JLR segments but the pandemic has hurt demand across all major markets. The profitability and liquidity of its Indian operations also have weakened, he added."
Taking to the streets: how the country’s open-air markets are faring
“The pandemic has highlighted the importance of urban open spaces for recreation, mental health, and to enhance the liveability of a city,” says Aswathy Dilip, Senior Programme Manager, Institute for Transportation and Development Policy. She is part of the team that worked on the T Nagar Pedestrian Plaza in Chennai (conceptualised in 2011 and completed in November 2019, at an approximate cost of ₹38 crore). “As Covid-19 made it challenging for families to come together with almost minimal space for recreation, this street provided a host of opportunities for citizens to use the street as a public space,” adds Dilip.
Similarly, the Chandni Chowk Redevelopment Plan in Delhi is the first major commercial development in the city’s bustling shopping hub after 300 years. The plan is to decongest the 1.3-km stretch between Red Fort and Fatehpuri Masjid, facilitate free pedestrian movement, enhance greenery and transform it into a car-free zone. The project, launched in 2004, is nearing completion. Following suit, cities across the country are transforming existing shopping hubs into retail-friendly environments — Church Street in Bengaluru, DP Road and JM Road in Pune, SM Street in Kozhikode, MG Marg in Sikkim, to name a few.
After petrol, diesel demand returns to pre-COVID-19 levels
After petrol , diesel demand has returned to pre- COVID-19 levels as sales rose 8.8 % in the first half of October from a year ago, preliminary industry data showed.
This is the first annual increase in sales of diesel - the most consumed fuel in the country - since the nation imposed lockdown in late March to curb the spread of the pandemic.
While demand for petrol has been more resilient than diesel due to an increased preference for using personal vehicles instead of public transport to follow distancing norms, October 1-15 sales number showed better than anticipated recovery.
A pent-up demand and the upcoming festive season was expected to support fuel sales but even before that diesel sales rose to 2.65 million tonnes in the first fortnight of October from 2.43 million tonne a year back and 2.13 million tonne in the first half of September.
Indiabulls Housing Finance sells additional stake in OakNorth Holdings for Rs 220 crore
A stake sale that helps in improving the financier's capital position.
PTI reports: "Indiabulls Housing Finance on Friday said it has sold an additional stake in OakNorth Holdings Ltd for Rs 220 crore.
The sale proceeds will be accretive to the regulatory net worth and the CRAR (capital to risk weighted assets ratio) of the company, it said.
“Indiabulls Housing Finance has further sold a portion of its stake in OakNorth Holdings Ltd (the wholly owned parent company of OakNorth Bank plc) for approximately Rs 220 crore,” Indiabulls Housing Finance said in a regulatory filing.
The company said with the latest stake sale, it has raised a total of Rs 2,493 crore as fresh equity in the month of September and October 2020 (Rs 683 crore through qualified institutional placement (QIP) and Rs 1,810 crore through sale of stake in OakNorth) adding to the regulatory equity capital of the company.
The shares of Indiabulls Housing Finance were trading 0.83 per cent lower at Rs 150.25 apiece on the BSE."
Apple supplier Foxconn aims to supply to 10% of global EVs
Foxconn aims to provide components or services for 10% of the world's electric vehicles (EVs) by between 2025 and 2027, and has been in talks with multiple car manufacturers for future cooperation, Chairman Liu Young-way said on Friday.
The Taiwanese contract manufacturer, formally called Hon Hai Precision Industry Co Ltd and a major supplier to Apple Inc , is looking at fresh growth from sectors such as electric vehicles, digital health and robots in a drive to diversify its global investments.
Automaker Fiat Chrysler said in January it planned to set up a joint venture with Foxconn to build electric cars and develop internet-connected vehicles in China.
“We want to push Taiwan's EV industry to the world,” Liu said in Taipei on Friday.
India's diesel sales rise above pre-COVID-19 levels in October - Industry data
More signs of normalcy on the economic front.
Reuters reports: "India's diesel consumption rose 8.8% in the first half of this month from a year ago, its first annual increase since March, when the nation imposed lockdown restrictions to curb the spread of COVID-19, preliminary industry data showed.
Diesel sales, which accounts for roughly two-fifths of refined fuel demand in the country, totalled 2.65 million tonnes, showed the preliminary data compiled by Indian Oil Corp , the country's top refiner and fuel retailer.
Petrol sales during Oct. 1-15 rose 1.5% from a year earlier to 982,000 tonnes, the data showed."
Passenger vehicle sales in India rise 26% in Sept: SIAM
More signs of recovery in the auto industry, but skeptics may point to pent-up demand.
PTI reports: "Passenger vehicle wholesales in India increased by 26.45 per cent to 2,72,027 units in September as against 2,15,124 units in the same month last year, auto industry body SIAM said on Friday.
According to the latest data by the Society of Indian Automobile Manufacturers (SIAM), two-wheeler sales also rose 11.64 per cent to 18,49,546 units, compared with 16,56,658 units in the same month last year.
Motorcycle sales were at 12,24,117 units as against 10,43,621 units in September 2019, up 17.3 per cent.
Scooter sales were also up marginally at 5,56,205 units from 5,55,754 units in the same month last year.
In the July-September 2020 quarter, passenger vehicles sales increased 17.02 per cent to 7,26,232 units from 6,20,620 units in the same period of last fiscal.
Two wheeler sales during the September quarter this fiscal rose marginally to 46,90,565 units as compared with 46,82,571 units in the same period last fiscal.
However, commercial vehicles sales saw a dip of 20.13 per cent at 1,33,524 units in the quarter under review as compared with 1,67,173 units in July-September 2019.
Vehicle sales across categories during the second quarter declined marginally to 55,96,223 units as against 56,51,459 units in the same period of the previous fiscal."
Kharif foodgrain production likely to be record 144.52 million tonnes in 2020-21: Agriculture Minister
Foodgrain production is pegged at record 144.52 million tonnes in the 2020-21 kharif season notwithstanding COVID-19 crisis, Agriculture Minister Narendra Singh Tomar said on Friday.
Foodgrain production stood at 143.38 million tonnes during the 2019-20 kharif season, as per official data.
Currently, harvesting of kharif crops is underway. Rice is the main kharif crop.
“Foodgrain production will be better than last year. As per the initial estimates, foodgrain production is projected to be 144.52 million tonnes in the 2020-21 kharif season,” Mr. Tomar said addressing a digital conference organised by industry body CII.
Production of cash crops such as sugarcane and cotton is also expected to be good, he said.
Despite the COVID-19 pandemic, there has been a record increase in area sown to kharif crops by 4.51% to 1,121.75 lakh hectares this year, he added.
HCL Technologies shares tank over 4% on profit-booking after Q2 earnings
IT stocks that rallied in the past few weeks are witnessing a correction.
PTI reports: "Shares of HCL Technologies on Friday declined over 4 per cent in early trade on the bourses on profit-booking after the company posted 18.5 per cent rise in September quarter net profit.
The stock opened with gains on the BSE, but failed to carry the momentum further and tanked 4.47 per cent to Rs 821 as the trade progressed.
At the NSE, it declined 4.58 per cent to Rs 820.60.
IT firm HCL Technologies on Friday posted 18.5 per cent rise in September quarter net profit at Rs 3,142 crore. The IT major had registered a net profit of Rs 2,651 crore in the July-September 2019 quarter (as per US GAAP), HCL Technologies said in a regulatory filing.
Its revenue grew 6.1 per cent to Rs 18,594 crore in the quarter under review, from Rs 17,528 crore in the corresponding quarter last year.
On a sequential basis, net profit was 7.4 per cent higher from Rs 2,925 crore, while top line was higher by 4.2 per cent from Rs 17,841 crore in June 2020 quarter.
In the second quarter, HCL Technologies recorded revenue growth at 4.5 per cent quarter-on-quarter in constant currency - higher than its estimate of 1.5-2.5 per cent sequential rise.
HCL Technologies has maintained its revenue growth guidance of an average of 1.5-2.5 per cent increase quarter-on-quarter in constant currency for the third and fourth quarter.
“We have delivered a stellar Q2 performance with a sequential revenue growth of 4.5 per cent in constant currency and 21.6 per cent EBIT margin,” HCL Technologies President and CEO C Vijayakumar said."
Wall street trading revenues soar
Rupee slips 6 paise to 73.42 against US dollar in early trade
Subdued sentiment in stocks also had its effect on the rupee.
PTI reports: "The rupee depreciated 6 paise to 73.42 against the US dollar in opening trade on Friday as forex market sentiment remained subdued amid concerns over resurgence in coronavirus cases in many parts globally.
Analysts said rising COVID-19 cases in eurozone and fresh round of lockdown in many countries weighed on investors sentiment.
On Thursday, the local currency settled at 73.36 against the greenback.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.05 per cent to 93.81.
On the domestic equity market front, the BSE benchmark Sensex was trading 160.58 points higher at 39,888.99, and the broader NSE Nifty rose 45.75 points to 11,726.10.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 604.07 crore on a net basis on Thursday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 1 per cent to USD 42.73 per barrel."
Equitas to cut stake in banking arm to 40% via M&A
Equitas Holdings Ltd. (EHL), is planning to reduce the stake in its banking arm to 40% by way of mergers/acquisitions (M&A) and bulk sale by September 2021, said a top official.
“Currently, we hold 95.49% stake in Equitas Small Finance Bank Ltd. (SFB). It will come down to 82-83% after the current initial public offering,” said P.N. Vasudevan, MD & CEO, Equitas SFB.
“As per RBI norms, we have to bring it down to 40% in five years. We have time till September 2021. For this, EHL will go for M&A and bulk stake sale,” he said.
According to Mr. Vasudevan, Equitas SFB would be the third small finance bank to get listed on the bourses after Ujjivan SFB and AU Small Finance Bank.
Equitas SFB will enter the capital market on October 20 with a fresh issue aggregating to ₹280 crore and an offer for sale of up to 7,20,00,000 equity shares by EHL in the price band of ₹32-₹33 apiece. The shares will be listed on the NSE and BSE.
Sensex, Nifty rebound in early trade; bank, IT stocks take charge
Some gains for the indices after yesterday's slump.
PTI reports: "Equity benchmark BSE Sensex rebounded 320.33 points to trade at 40,048.74 in opening deals on Friday, led by intense buying mainly in banking and IT counters.
Likewise, the broader NSE Nifty surged 86.75 points or 0.74 per cent to 11,767.10 in early trade.
On the Sensex chart, IndusInd Bank, Tata Steel, Infosys, ONGC, Kotak Bank, NTPC and Bharti Airtel were among prominent gainers.
Of the 30 Sensex constituents, 27 were trading in the green.
Asian shares were trading on a mixed note amid growing fears about resurgence of coronavirus cases in some countries.
On Thursday, the Sensex had plummeted by 1,066.33 points or 2.61 per cent to end at 39,728.41. The broader NSE Nifty had crashed 290.70 points or 2.43 per cent to 11,680.35.
Foreign institutional investors turned net sellers in the capital market as they offloaded shares worth Rs 604.07 crore on Thursday, exchange data showed."
‘Latest stimulus to have minimal growth impact’
The government’s latest fiscal stimulus measures will have a minimal impact on India’s growth prospects, rating agency Moody’s Investors Service said on Thursday, stressing that their ‘small scale’ is actually a credit negative as it reflects the country has ‘limited budgetary firepower to support the economy’.
On Monday, Finance Minister Nirmala Sitharaman had announced a leave travel cash voucher scheme and an interest-free festival advance of ₹10,000 for all central government employees, to spur consumer demand. She also announced a ₹25,000 crore enhancement in the Centre’s capital spending and a 50-year loan facility worth ₹12,000 crore for States to expand capital expenditure.
Moody’s expects India’s GDP to shrink 11.5% in 2020-21, so the 0.5% of GDP gain expected by the government from these stimulus measures will provide only ‘a small boost’, it pointed out. The package amounts to a fiscal cost of 0.2% of real GDP this year, as per the rating agency.
