The benchmark stock indices have opened the day with modest losses after witnessing meaningful gains yesterday.
The airline industry is witnessing a turnaround with air traffic improving as the economy opens up.
Join us as we follow the top business news through the day.
Retail traders now account for 20% of equity trading
Sensex tanks 323 points on weak global cues; Nifty below 11,550
The morning slump in stocks only got worse through the day.
PTI reports: "The BSE Sensex tumbled 323 points on Thursday, weighed by losses in index heavyweights Reliance Industries and HDFC twins amid negative cues from global markets after the US Fed highlighted the uncertainty surrounding economic recovery.
The 30-share BSE index ended 323 points or 0.82 per cent lower at 38,979.85. The NSE Nifty fell 88.45 points or 0.76 per cent to 11,516.10.
Bajaj Finserv was the top laggard in the Sensex pack, shedding over 2 per cent, followed by PowerGrid, L&T, ICICI Bank, Bajaj Finance, TCS and Sun Pharma.
On the other hand, HCL Tech, Infosys and Maruti finished higher.
According to traders, domestic equities traded on a negative note tracking weak cues from global markets after the US Federal Reserve hinted at key policy interest rate staying close to zero at least through 2023 without unveiling any additional stimulus plans.
Bourses in Shanghai, Hong Kong, Seoul and Tokyo ended with significant losses.
Stock exchanges in Europe too opened on a negative note.
Meanwhile, global oil benchmark Brent crude was trading 0.26 per cent lower at USD 42.11 per barrel."
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Rupee settles 14 paise lower at 73.66 against US dollar
The rupee managed to recover some of its losses suffered during the open.
PTI reports: "The rupee depreciated 14 paise and settled at 73.66 (provisional) against the US dollar on Thursday tracking muted domestic equities.
At the interbank forex market, the local unit opened on a weak note at 73.70, and finally closed at 73.66 against the American currency, registering a fall of 14 paise over its last close.
During the session, the domestic unit witnessed an intra-day high of 73.64 and a low of 73.78 against the greenback.
On Wednesday, the rupee had strengthened by 12 paise to 73.52 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.06 per cent to 93.15.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 251.35 points lower at 39,051.50 and the broader NSE Nifty fell 74.20 points to 11,530.35.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 264.66 crore on a net basis on Wednesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.33 per cent to USD 42.08 per barrel."
Walmart Foundation announces two new grants to help India’s smallholder farmers
Walmart Foundation has announced two new grants amounting $4.5 million for this year to improve the conditions of women engaged in farming and to help boosting farm productivity as well as to increase farmers’ income in India.
These grants are part of a 2018 commitment by Walmart Foundation to invest $25 million (approximately ₹180 crore) over five years to improve livelihoods of farmers in India.
The funding has been provided to non-profits Tanager and PRADAN to further scale their efforts to help farmers earn more from improved output and fair market access.
Walmart’s objectivity is to directly source more from smallholder farmers in India to help in doubling their income.
Automakers in India should cut royalty payments to foreign parent firms - official
More signs of friction between the government and automakers.
Reuters reports: "Indian carmakers should reduce royalty payments to foreign partners to bring down costs instead of seeking tax cuts, a finance ministry official said on Thursday, days after reports that Toyota would halt expansion in the country due to high taxes.
Last month India's commerce minister said in a meeting with Indian automakers, including local representatives from Toyota and Maruti Suzuki, that they should find ways to reduce royalty payments to foreign parent companies for use of technology or brand names.
Maruti Suzuki paid 38.2 billion Indian rupees ($518.5 million) in royalties to its Japanese parent Suzuki Motor in the fiscal year ending March 31, 2020, amounting to 5% of its revenue, according to its annual report.
Privately-owned companies such as Toyota Motor's India arm paid $88 million or 3.4% of revenue to its Japanese parent, government data shows."
India ranks 116 in World Bank’s human capital index
India has been ranked at the 116th position in the latest edition of the World Bank’s annual Human Capital Index that benchmarks key components of human capital across countries.
However, India’s score increased to 0.49 from 0.44 in 2018, as per the Human Capital Index report released by the World Bank on Wednesday.
The 2020 Human Capital Index update includes health and education data for 174 countries — covering 98 per cent of the world’s population — up to March 2020, providing a pre-pandemic baseline on the health and education of children, with the biggest strides made in low-income countries.
The analysis shows that pre-pandemic, most countries had made steady progress in building human capital of children, with the biggest strides made in low-income countries.
Asian stocks retreat on lack of new Fed action
An update on the Asian bourses.
PTI reports: "Asian stock markets tumbled Thursday after the U.S. Federal Reserve indicated its benchmark interest rate will stay close to zero at least through 2023 but announced no additional stimulus plans.
Market benchmarks in Shanghai, Tokyo, Seoul and Hong Kong all retreated.
On Wednesday, Wall Street’s benchmark S&P 500 index closed down 0.5% after the Fed said it won’t raise interest rates until inflation reaches 2%, which the U.S. central bank’s own projections show it doesn’t expect until late 2023.
Chairman Jerome Powell promised the Fed we will not lose sight of the millions of Americans that remain out of work but gave no indication of new stimulus.
Markets hoped for the Fed to put policy money where the mouth is but “ended up a tad disappointed, Mizuho Bank said in a report. The Fed was long on talk and short on action. Also Thursday, the Japanese central bank left its interest rates unchanged and gave no indication about possible additional stimulus.
The Shanghai Composite Index lost 1% to 3,215.47 and the Nikkei 225 in Tokyo sank 0.7% to 23,321.33. The Hang Seng in Hong Kong retreated 1.6% to 24,327.67.
The Kospi in Seoul shed 1.4% to 2,399.96 while Sydney’s S&P-ASX 200 declined 1.1% to 5,889.80.
India’s Sensex opened down 0.2% at 39,210.14. New Zealand and Southeast Asia markets all retreated.
Global markets have recovered most of this year’s losses, boosted by central bank infusions of credit into struggling economies and hopes for a coronavirus vaccine.
Forecasters warn, however, that the recovery might be too big and fast to be supported by uncertain economic activity.
U.S. investors are counting on Congress for a new support package after additional unemployment benefits that help to support consumer spending expired, but legislators are deadlocked on its possible size.
On Wednesday, the S&P 500 declined to 3,385.49. The Dow Jones Industrial average rose 0.1%, to 28,032.38. The Nasdaq composite lost 1.3% to 11,050.47.
Powell said the U.S. economy has recovered more quickly than The Fed forecast the economy will shrink 3.7% this year, an improvement over its June outlook of a 6.5% drop. The Fed projected an unemployment rate at the end of the year of 7.6% instead of the 9.3% projected in June.
A full economic recovery is unlikely until people are confident that it is safe to re-engage in a wide variety of activities, Powell said.
In energy markets, benchmark U.S. crude oil for October delivery lost 63 cents to $39.54 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.88 on Wednesday to $40.16. Brent crude oil for November delivery shed 55 cents to $41.67 per barrel in London. It gained $1.69 the previous session to $42.22.
The dollar gained to 105.07 yen from Wednesday’s 105.01 yen. The euro retreated to $1.1765 from $1.1801."
COVID-19 impact: Railways traffic earnings down 42% till August, says Piyush Goyal
With regular operations disrupted due to the COVID-19 , the traffic earnings of the Railways has declined by over 42% to ₹41,844.31 crore till August over the same period last year, Parliament was told on Wednesday.
Up to the end of August, the number of originating passengers was just 1.27% of the corresponding period last year, while freight loading was 86.6% of the corresponding period last year.
“Consequently, the traffic revenue for the period, at ₹41,844.31 crore, has declined by 42.3% over the corresponding period last year,” Minister of Railways Piyush Goyal told the Rajya Sabha.
On an average, the Railways earns about ₹50,000 crore from passenger segment and around ₹1,30,000 crore from freight annually.
Happiest Minds Technologies makes bumper market debut; shares zoom over 111%
Some incredible action in the IPO corner this morning.
PTI reports: "Shares of Happiest Minds Technologies Ltd were off to a flying start on domestic bourses on Thursday as they got listed with a premium of over 111 per cent against an issue price of Rs 166 per share.
The stocks of the IT services firm listed at Rs 351 apiece, reflecting a gain of 111.14 per cent from the issue price on the BSE. Later, they rose to a high of Rs 395 - a jump of 137.95 per cent.
On the NSE, they opened at Rs 350 apiece, zooming 110.84 per cent against the issue price.
The Rs 702-crore initial public offering of Happiest Minds Technologies, promoted by Ashok Soota, garnered massive response from investors as it was subscribed a whopping 151 times.
The price band for the offer, which closed for subscription on last Wednesday, was fixed at Rs 165-166 per equity share.
ICICI Securities and Nomura Financial Advisory and Securities (India) were the managers for the offer."
China state media outlet calls Nvidia's Arm purchase 'disturbing', urges regulatory caution
An op-ed in China's state-backed Global Times on Wednesday said U.S. chipmaker Nvidia Corp's planned acquisition of Arm Ltd from Japan's SoftBank Group Corp was “disturbing”, urging global regulators to exercise caution as they evaluate it for approval.
“Given the U.S.-China tensions and U.S. suppression on a range of Chinese technology enterprises, if Arm falls into U.S. hands, Chinese technology companies would certainly be placed at a big disadvantage in the market,” said the op-ed, the author of which was not named.
SoftBank said on Monday it had agreed to sell Britain-based chip designer Arm to Nvidia for as much as $40 billion in a deal set to reshape the global semiconductor landscape.
The Global Times op-ed said Chinese companies put on the U.S. “entity list” risk getting cut off from using Arm-based chips, while European companies using Arm might also face difficulties supplying China.
The Phillips curve is dead
Rupee tumbles 24 paise to 73.76 against US dollar in early trade
The weakness in the stock indices is having a negative impact on the rupee.
PTI reports: "The rupee depreciated 24 paise to 73.76 against the US dollar in opening trade on Thursday tracking muted domestic equities and strengthening American currency.
At the interbank forex market, the local unit opened on a weak note at 73.70, then fell further to 73.76, registering a fall of 24 paise over its last close.
On Wednesday, the rupee had strengthened by 12 paise to 73.52 against the US dollar.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.32 per cent to 93.51.
Meanwhile, the Federal Reserve concluded its two-day policy meeting on Wednesday.
“The US Federal Reserve said it would keep the policy accommodative until inflation moderately overshot 2 per cent for some time. Most Fed members see the federal funds rate at 0 per cent until at least 2023,” said Abhishek Goenka, Founder and CEO, IFA Global.
“With no major surprises from the Fed policy and the US dollar broadly stable globally, the rupee should continue to trade the 73-74 range a while longer,” Goenka said.
Goenka further said that “while several inflows are queued up, we expect the RBI to continue accumulating reserves and that should limit down side. The yuan is continuing to strengthen and that should limit USD strength against Asian currencies.”
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 124.94 points lower at 39,177.91 and the broader NSE Nifty fell 31.60 points to 11,572.95.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 264.66 crore on a net basis on Wednesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 1.07 per cent to USD 41.77 per barrel."
Domestic air passenger traffic improves in August
Growth in domestic air passenger traffic in August was marginally better than the previous month, rising to 24% of pre-COVID-19 levels as compared to 18% in July.
The total number of passenger trips recorded by various airlines were altogether at 28.32 lakh, a 34% increase as compared to July and 43% as compared to June. Total passenger trips in the year-earlier period were at 117.93 lakh.
Domestic flights resumed on May 25 after being suspended for two months.
SpiceJet recorded a seat occupancy of 76%, Vistara 68% and IndiGo 65.6%.
Sensex falls over 200 points in early trade; Nifty below 11,600
A modest correction to the stock indices after yesterday's gains.
PTI reports: "Domestic equity benchmark Sensex dropped over 200 points in early trade on Thursday led by losses in financial stocks after the US Federal Reserve highlighted the uncertainty surrounding economic recovery.
The 30-share BSE index was trading 216.76 points or 0.55 per cent lower at 39,086.09; while the NSE Nifty fell 44 points or 0.38 per cent to 11,560.55.
ICICI Bank was the top laggard in the Sensex pack, shedding over 1 per cent, followed by HDFC Bank, PowerGrid, Bajaj Auto, Kotak Bank, Axis Bank and L&T.
On the other hand, HCL Tech, Tech Mahindra, Asian Paints, ONGC and Infosys were among the gainers.
In the previous session, Sensex jumped 258.50 points or 0.66 per cent to close at 39,302.85, while Nifty rose 82.75 points or 0.72 per cent to finish at 11,604.55.
Meanwhile, exchange data showed that foreign institutional investors bought equities worth Rs 264.66 crore on a net basis on Wednesday.
According to traders, domestic equities opened on a negative note tracking weak cues from global markets after the US Federal Reserve hinted at the key policy interest rate staying close to zero at least through 2023 without unveiling any additional stimulus plans.
Bourses in Shanghai, Hong Kong, Seoul and Tokyo were trading with significant losses in mid-day deals.
Stock exchanges on Wall Street ended with a negative bias in overnight trade.
Meanwhile, global oil benchmark Brent crude was trading 0.90 per cent lower at USD 41.84 per barrel."
Builders urge govt. aid to ensure SMEs’ survival
The construction industry is facing a survival issue and many small- and medium-sized construction firms and builders would be out of business without timely action, said Ajit Gulabchand, CMD, Hindustan Construction Company and past president of The Builders’ Association of India (BAI) at a webinar.
“Many existing projects have got delayed due to paucity of funds,” he said. Hence many projects were facing cost overruns, he added.
Painting a gloomy picture for the infrastructure, housing and construction industry, he said the government’s planned expenditure of ₹100 lakh crore in the next five years would help this industry overcome some of the challenges.
However, he said it would be impossible for the industry to offer 30% collateral that banks were now seeking for sanctioning loans.
