The benchmark stock indices opened the day on a positive note as oil prices continued to drop after OPEC members failed to reach an agreement.
Join us as we follow the top business news through the day.
India's growth to witness 6.5-7% FY23 onwards: CEA
Positivity from the chief economic advisor.
Reuters reports: "The country's economy will start witnessing a growth of 6.5 to 7 per cent from fiscal 2023 onwards, helped by various reforms undertaken by the government so far and also as COVID-19 vaccination drive progresses, Chief Economic Advisor Krishnamurthy Subramanian said.
He said the second wave of COVID-19 is unlikely to have a very significant on the economy.
The country's economy contracted by 7.3 per cent in fiscal 2020-21.
“Together with the reforms and focus on vaccination, I expect growth to start hitting close 6.5 to 7 per cent from FY23 onwards and accelerate from there on,” Subramanian said at a virtual event organised by Dun & Bradstreet.
“Given the significant reforms that have been done over the last one and a half years, I have no hesitation in saying that I look forward to a decade of high growth for India.” He said the momentum in recovery that was seen in the fourth quarter of FY21 and overall in the second half of FY21 got impacted to some extent by the second wave of COVID-19.
While the second wave was quite devastating on the health side, the economic impact of that has been limited because the second way was much shorter in duration compared to the first wave and the economic restrictions that were placed were primarily at the state level, he said.
“We expect the impact of the second wave to be not very large,” he said.
Subramanian said the supply-side reforms undertaken by the government in sectors such as agriculture, labour, export PLI scheme, change in MSME definition, creation of the bad bank, privatisation of public sector banks among others, are going to push growth in the future.
He said vaccination is important for the country to recover from the pandemic and to convert COVID-19 into effectively the common flu and reduce its impact significantly.
While addressing the event earlier, Economic Advisory Council to the Prime Minister (EAC-PM) Chairman Bibek Debroy said GDP growth rate is a function of what the base was in the last year.
“Since the base in 2021 dropped by 7 and some decimal point percentages, correspondingly the (real rate of) growth in 2021-22, because of that low base, will be high,” he said.
He expects a real rate of growth of around 10 per cent during the current financial year.
Debroy said the pandemic has resulted in whittling away of two years of economic development.
“So it is not only the target of USD 5 trillion dollar (economy by 2024-25) moves far away, but also the fact that adhering to the 2030 SDGs (Sustainable Development Goals) target for India will be a little more difficult.
According to him the indicators that have surfaced so far show that the corporate profitability results are pretty good.
He said that despite good corporate profitability, employment in urban areas has not picked up.
“One of the worrying signs at the moment is, although I said the corporate sector seems to be doing well, there aren't any robust signs of employment picking up in the urban areas, so far. This is really a function of what has been happening to un-incorporated enterprises and I have in mind MSMEs,” Debroy added."
Sensex, Nifty end flat after scaling fresh lifetime highs
Equity benchmarks Sensex and Nifty ended flat after scaling fresh intra-day peaks on Friday amid a mixed trend in global markets.
After surging to a lifetime peak of 53,290.81 in opening session, the 30-share BSE index ended 18.79 points or 0.04 % lower at 53,140.06, while the broader NSE Nifty slipped 0.80 points or 0.01 % to 15,923.40.
HCL Tech was the top loser in the Sensex pack, shedding over 3 %, followed by Infosys, Bajaj Finserv, NTPC, ICICI Bank and IndusInd Bank.
On the other hand, Bharti Airtel, UltraTech Cement, Tata Steel and PowerGrid were among the gainers.
Rupee slips 3 paise to close at 74.57 against U.S. dollar
The Indian rupee slipped 3 paise to settle at 74.57 (provisional) against the U.S. dollar on Friday, as investors awaited fresh triggers.
At the interbank forex market, the local unit opened at 74.53 against the greenback and witnessed an intra-day high of 74.51 and a low of 74.66 during the session.
The local unit finally ended the day at 74.57, down 3 paise over its last close.
On Thursday, the rupee had settled at 74.54 against the U.S. dollar.
"The forex market focus will be on the U.S. retail sales data and consumer confidence data for any reading on inflation and the strength of the recovery.
Puri conveys India's concerns over high oil prices to Saudi, UAE
Oil politics back in the limelight.
PTI reports: "India, the world's third-biggest oil consumer, has conveyed to OPEC countries its concern over high oil prices that are threatening to impact the nascent economic recovery after the devastating pandemic.
New Oil Minister Hardeep Singh Puri has made phone calls to key OPEC nations to convey the desire for an affordable price for consumers.
After calling his counterparts in Qatar and the UAE, he called Organization of the Petroleum Exporting Countries (OPEC) kingpin Saudi Arabia on Thursday evening.
"Had a warm and friendly discussion with His Royal Highness, Prince Abdul Aziz bin Salman Al Saud, Minister of Energy of Saudi Arabia on strengthening bilateral energy partnership and developments in the global energy markets," Puri tweeted.
Saudi Arabia, he said, is a central player in the international energy market.
"I conveyed my desire to work with His Royal Highness Prince Abdulaziz to bring greater predictability and calm in the global oil markets, and also to see hydrocarbons become more affordable," he said.
Saudi Arabia is the world's largest exporter of crude oil and India's second-biggest source after Iraq.
The discussions focused "on strengthening bilateral energy partnership and developments in the global energy markets," he said.
"Highlighted the crucial role of Saudi Arabia in rapidly growing energy needs of India in the coming years, and my strong desire to work with His Royal Highness to further diversify our bilateral strategic energy partnership beyond buyer-seller to see greater two-way investments." Concerned over the rising oil prices, India has been reaching out to key oil producers in the Middle East.
Puri on July 14 called UAE Minister of Industry Ahmed Al Jaber, who is the chief executive of Abu Dhabi National Oil Co (ADNOC), seeking the UAE's support in lowering prices.
The rebound in international oil prices from lows hit in May on the back of demand recovery has sent petrol and diesel rates to a record high in India.
Petrol has crossed the Rs-100-a-litre mark in more than one and a half dozen states and union territories, while diesel is being sold at over Rs 100 a litre in Rajasthan and Odisha.
India, which imports 85 per cent of its oil needs, has long pressed producers' cartel OPEC and its allies, called OPEC+, to phase out its production cuts and allow oil prices to come to reasonable levels that support growth. It wants OPEC+ to stop propping up prices with its output cuts.
In March, Puri's predecessor Dharmendra Pradhan and Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman had an unpleasant exchange over oil prices.
To Pradhan blaming production cuts by OPEC+ members for the surge in oil prices, Prince Abdulaziz said India should take some of the crude out of the storage that it had purchased "very cheaply last year".
Days later, Pradhan termed the statement an "undiplomatic response from a friendly nation".
Since then, the petroleum ministry has asked refiners to look at sources outside of the Middle East for buying oil.
Puri, a former diplomat, is widely expected to smoothen flared tensions with oil-producing nations in general and Saudi Arabia in particular.
OPEC, Russia and several other allies in a production accord could not reach an agreement earlier this month on output quotas for August and possibly beyond.
Expectations were that the alliance may agree to raise production by 500,000 to 700,000 barrels per day but the decision was postponed as the UAE differed on the baseline for such output increase.
India is the world's third-largest consumer of crude and OPEC nations such as Saudi Arabia have traditionally been its principal oil source. But OPEC and OPEC+ ignoring its call for easing of supply curbs had led India to tap newer sources to diversify its crude oil imports.
As a result, OPEC's share in India's oil imports has dropped to about 60 per cent in May from 74 per cent in the previous month.
The two sides have somewhat patched up relations, with Saudi Arabia and the UAE supplying critical medicine, oxygen and equipment to help India battle its second wave of coronavirus infections."
India's June oil imports hit their lowest in 9 months
Domestic demand slump affects imports.
Reuters reports: "India's crude oil imports in June fell to their lowest in nine months, as refiners curtailed purchases amid higher fuel inventories due to low consumption and renewed coronavirus lockdowns in the previous two months.
India, the world's third-biggest oil importer and consumer, shipped in about 3.9 million barrels per day (bpd) of crude last month, about 7% down from May, but 22% higher from year-ago levels, tanker arrival data obtained from trade sources showed.
India is the second major importer in Asia, after China, to post a slump in last month's crude imports.
After an uptick in India's fuel demand in February and March, the country's refiners cranked up crude processing and oil imports, said an Indian refining official who declined to be named as he is not authorised to speak to media.
However, fuel demand fell sharply in April and May after the government imposed restrictions to curb a second wave of coronavirus, leaving refiners with high fuel inventories.
"We had enough inventory of refined fuel so there was little scope to raise crude imports," the source said, adding that the export market was unattractive as profits were low.
India's crude imports between April and June, however, rose 11.7% year-on-year to 4.1 million bpd as the lockdown curbs were not as severe as last year when COVID-19 first hit the nation, according to the data.
Last month, Iraq stayed as the top oil supplier to India, followed by Saudi Arabia. The United Arab Emirates climbed four notches to emerge as third-biggest supplier while Nigeria rose to No.4 from No.5 in May.
The United States was at No.5, followed by Canada.
The share of oil from the Middle East in India's imports rose to about 59% in June from 53% in the prior month, while that of other regions declined, data showed."
FedEx to invest $100 mln in Indian logistics firm Delhivery
More foreign interest in the Indian e-delivery business.
Reuters reports: "FedEx Corp will make a $100-million equity investment in Indian e-commerce logistics startup Delhivery as part of a long-term commercial agreement, the U.S. delivery firm said on Friday.
SoftBank-backed Delhivery will sell FedEx Express' international products and services in India, as part of the deal, and also provide pick-up and delivery services across the country.
FedEx will also transfer some of its assets from its India business to Delhivery, enabling broader access to the the Gurgaon-based startup's pan-India network.
Don Colleran, chief executive officer of FedEx Express, shall also get a board seat at Delhivery.
Several Indian startups have spelt out plans to go public to cash in on liquidity by foreign funds. According to media reports, the startup which is eyeing a market debut as early as the fourth quarter is weighing a valuation of $4 billion. (https://bityl.co/7Fiw https://bityl.co/7Fiw))
SoftBank-backed Indian digital payments startup Paytm has filed for an initial public offering, the latest in a lineup of unicorns that are planning to to go public, making India one of the hottest IPO markets in 2021. Food delivery startup Zomato's IPO subscription opened earlier this week and is awaiting listing."
Paytm files draft papers for ₹16,600-crore IPO with SEBI
Digital payments and financial services firm Paytm has filed a draft red herring prospectus for its proposed ₹16,600 crore initial public offering (IPO).
According to the document, the company plans to raise ₹8,300 crore through fresh equity and another ₹8,300 crore through offer-for-sale.
The offer-for-sale proposes equity sale by the company’s founder Vijay Shekhar Sharma, Alibaba group and its subsidiary firm Ant Financial, Elevation Capital, Saif Partners, BH International Holdings etc., according to the document.
Zomato's $1.3 bln India stock offering draws strong investor appetite
The much-hyped IPO has finally hit the floor.
Reuters reports: "A $1.3 billion stock offering by Indian food delivery startup Zomato, backed by China's Ant Group was almost eight times oversubscribed before the offer closed later on Friday, as investors placed bets on a fast-growing sector.
The IPO, first in India's food delivery space, is priced at 72 to 76 rupees per share, giving it a valuation of as much as $7.98 billion.
Bids by big institutional investors were 12 times the shares on offer for their category, market data showed.
Before the IPO opened this week, Zomato raised $562 million from 186 big financial investors, including marquee names such as Tiger Global, BlackRock, JPMorgan and Morgan Stanley.
Investors are placing bets on Zomato even though it has flagged in its IPO draft prospectus that its costs and losses would continue to rise as it ramps up investments towards business growth.
"There is insane demand and a lot of excitement," said Jimeet Modi, founder of Indian brokerage Samco Securities. "Retail investors are looking at this from a listing gains point of view."
The Zomato IPO comes when India's markets are near their all-time highs and there is growing interest from digital companies to list on bourses.
Alibaba-backed financial payments app Paytm on Friday filed draft papers in India for a $2.2 billion IPO, while Walmart's e-commerce giant Flipkart is also planning one.
Just like U.S.-based DoorDash, Zomato is mainly a food delivery app, having partnered with 350,000 restaurants and cafes in 526 Indian cities. It also allows customers to book tables for dine-in and write food reviews and upload photos.
Zomato competes with local rival Swiggy, which is backed by Softbank, and Amazon's still nascent food delivery service in a food delivery market that Boston Consulting Group expects will touch $8 billion by 2023, from just $4 billion last year.
The Zomato app has 41.5 million customers using its service on an average every month, and orders on its platform surged to 403.1 million in the year 2019-2020, from just 30.6 million in 2017-2018, its draft IPO prospectus showed.
While the Zomato IPO is seeing strong investor interest, some analysts said the company's valuations were too high, especially because the company does not make profits.
Himanshu Nayyar, an analyst at India's Yes Securities, has said in a research note that Zomato's IPO price range was "really expensive", as "its path to profitability is still not clear.""
Dogecoin creator says crypto industry financially exploits the vulnerable
Jackson Palmer, co-founder of meme-inspired Dogecoin, has called the cryptocurrency industry a “right-wing, hyper-capitalistic technology” built primarily to amplify the wealth of the rich by extracting money from “the financially desperate and naive”.
Jackson Palmer and Billy Markus created the meme-based token Dogecoin in 2013 as a joke, with no intention of making it one of the top cryptocurrencies.
The co-founders quit the project few years later, and sold their holdings before the cryptocurrency's sudden rise earlier this year.
Wipro shares jump over 2% in early trade; pare gains later
The IT giant's shares were volatile this morning.
PTI reports: "Shares of IT major Wipro on Friday gained over 2 per cent in early trade after the company posted a 35.6 per cent jump in June quarter consolidated net profit and exuded confidence in logging double-digit revenue growth in FY22.
The stock jumped 2.30 per cent to Rs 589 on the BSE in early trade. But, as the trade progressed the stock erased its early gains and was trading lower by 0.45 per cent at Rs 573.15.
At the NSE also, after an upbeat start and a gain of 2.31 per cent in early trade, the stock was later trading at Rs 572.90, lower by 0.52 per cent.
Wipro on Thursday posted a 35.6 per cent jump in June quarter consolidated net profit to Rs 3,242.6 crore, and exuded confidence in logging double-digit revenue growth in FY22 following stellar Q1 performance and robust demand environment.
The Bengaluru-based company had registered a net profit (attributable to equity holders) of Rs 2,390.4 crore in the year-ago period, as per Indian Accounting Standards (Ind-AS). Its revenue from operations rose by 22.3 per cent year-on-year to Rs 18,252.4 crore in the reported quarter.
"We are in an acceleration mode, we have ramped up our supply chain engine and improved our talent acquisition machine and it has certainly helped. We have had a very strong performance in bookings now for three quarters...," Wipro CEO and Managing Director Thierry Delaporte said during a virtual briefing.
While the company doesn't provide guidance for the full fiscal, "the performance of Q1 and the Q2 guidance... (makes it) clear that we are gearing up for growth that will be well ahead of double-digit growth for the full year, even excluding Capco", he added."
Petroleum minister vows to work with Saudi Arabia, UAE to calm oil markets
New Petroleum Minister Hardeep Singh Puri vowed to work with oil producers Saudi Arabia and United Arab Emirates to reduce volatility in oil markets and make crude prices affordable.
Veteran diplomat Puri, who took charge of the ministry last week, spoke to Saudi oil minister Prince Abdulaziz bin Salman on Thursady - a day after his conversation with Ahmed Al Jaber, UAE’s minister of Industry and chief executive of Abu Dhabi National Oil Co (ADNOC).
“I conveyed my desire to work with His Royal Highness Prince Abdulaziz to bring greater predictability and calm in the global oil markets, and also to see hydro carbons become more affordable”, Mr. Puri tweeted after a telephonic conversation with his Saudi counterpart.
Inflation to persist at elevated levels for a while: RBI officials
The tapering of the second wave, coupled with an aggressive vaccination push, has brightened near-term prospects for the economy but inflation will remain elevated for some more months, senior RBI officials wrote in an article on the ‘State of the Economy’ in the RBI’s monthly Bulletin.
While several high frequency indicators of activity were recovering, a ‘solid increase in aggregate demand’ was yet to take shape.
On the supply side, agricultural conditions were turning buoyant with the revival in the monsoon, but the recovery of manufacturing and services sectors had been interrupted by the second wave, they added.
The pick-up in inflation was driven largely by adverse supply shocks caused by the pandemic, including increases in margins and taxes, and sector-specific demand-supply mismatches, the article’s authors wrote.
Oil heads for biggest weekly drop since March as supply worries mount
The lack of a deal among OPEC members is turning out to be bad for oil bulls.
Reuters reports: "Oil prices changed little on Friday, heading for their biggest weekly drop since March after supply concerns spooked investors, with OPEC likely to add more barrels amid expectations that demand is returning as more countries recover from the pandemic.
Brent crude for September was down 2 cents at $73.45 a barrel by 0338 GMT and is heading for a 3% fall this week after two days of heavy declines.
U.S. crude for August fell 1 cent to $71.64 a barrel, and is on track for a decline of about 4% this week.
Discussions on supply policy within the Organization of the Petroleum Exporting Countries, Russia and other producers, a group called OPEC+, ended without agreement this month after the United Arab Emirates (UAE) objected to extending the output policy beyond April 2022.
Saudi Arabia and the UAE reached a compromise this week, paving the way for OPEC+ to finalise an agreement that would allow more supply into the market. "All signs indicate that OPEC+ is heading for a potential compromise agreement that will allow the UAE to secure a baseline adjustment, but other producers will undoubtedly seek similar treatment and potentially prolong the deliberations heading into the August ministerial meeting," RBC Capital analysts said in a note.
OPEC said on Thursday it expects world oil demand to increase next year to around levels seen before the pandemic, about 100 million barrels per day (bpd), led by demand growth in the U.S., China and India.
OPEC output in June increased by 590,000 bpd to 26.03 million bpd, the report showed.
"Output should rise further in July on the back of larger quotas, and we expect high prices to incentivise more production from the group even without a formal agreement to do so," Capital Economics said in a note.
A large decline in crude stockpiles in the United States has done little to support prices as a rise in gasoline inventories in a week that included the Fourth of July holiday, when driving usually surges, raised fresh demand concerns."
Sensex surges over 100 pts in early trade; Nifty tops 15,950
A good start to the last trading day of the week.
PTI reports: "Equity benchmark Sensex jumped over 100 points to touch record intra-day high in early trade on Friday, tracking gains in index majors Reliance Industries, HDFC twins and ITC despite a largely negative trend in global markets.
After surging to a peak of 53,290.81 in opening session, the 30-share BSE index was trading 111.60 points or 0.21 per cent higher at 53,270.45 in initial deals, while the broader NSE Nifty rose 33.60 points or 0.21 per cent to 15,957.80.
ITC was the top gainer in the Sensex pack, surging over 1 per cent, followed by Sun Pharma, Dr Reddy’s, Reliance Industries and HDFC.
On the other hand, HCL Tech, Tech Mahindra, ICICI Bank, Infosys and NTPC were among the laggards.
In the previous session, Sensex settled 254.75 points or 0.48 per cent higher at its lifetime high of 53,158.85, and Nifty rose 70.25 points or 0.44 per cent to its all-time high of 15,924.20.
Foreign institutional investors (FIIs) were net sellers in the capital market as they offloaded shares worth Rs 264.77 crore on Thursday, as per provisional exchange data.
"Domestic equities look to be modestly good as of now. Notably, dovish remarks of Federal Reserve Chairman Powell in his testimony despite surge in inflation should offer comfort to global equities including India," said Binod Modi Head-Strategy at Reliance Securities.
Benchmark Nifty, which was consolidating in the range of 15,600-15,900 for the last couple of weeks, is set to cross 16,000 levels shortly, he said, adding that higher crude prices, spread of delta plus variant globally and weakening INR could be a near risk for markets.
Elsewhere in Asia, bourses in Shanghai, Seoul and Tokyo were trading with losses in mid-session deals, while Hong Kong was trading in the positive territory.
Equities on Wall Street too ended on a negative note in overnight sessions.
Meanwhile, international oil benchmark Brent crude declined 0.12 per cent to USD 73.38 per barrel."
TCS to help Malaysia in building a digital economy
India’s tech major Tata Consultancy Services (TCS) Ltd. is working closely with the Malaysian government to help that country develop a digital economy by offering training for the creation of more digital jobs.
Earlier this year, Malaysia unveiled the Malaysia Digital Economy Blueprint (MyDIGITAL) with an objective to enhance digitalisation, improve digital infrastructure and build a more trusted and secure digital environment, in addition to targeting the development of 20,000 cybersecurity knowledge workers and 30,000 data professionals in that country by 2025.
“We are working closely with Malaysian government agencies to create more digital jobs for the country. TCS is supporting national efforts to fill the digital skills gap and create well-paying jobs in the technology sector for Malaysian youths,” Jeevan Rajoo, Country Head, TCS Malaysia, said in a post.
