Today's top business news: Shares rise for 6th straight day, oil slips as surge in COVID-19 cases threatens demand, YouTube's Indian viewership jumps in 2020, and more

The Bombay Stock Exchange (BSE) building, in Mumbai. File   | Photo Credit: PTI

The benchmark stock indices opened the day on a negative note, falling from record highs.

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

4:30 PM

Google's domination of the search engine market


4:00 PM

Markets extend winning run to 6th session; Sensex ends at record high

The winning streak continues.

PTI reports: "Extending its winning run to the sixth session, equity benchmark Sensex advanced 70 points to end at a new record on Friday following gains in Infosys, ICICI Bank, TCS and Reliance Industries.

After opening at its lifetime intra-day high of 47,026.02, the 30-share BSE index pared some gains to finish at 46,960.69, up 70.35 points or 0.15 per cent.

Similarly, the broader NSE Nifty rose 19.85 points or 0.14 per cent to 13,760.55 -- its new closing record.

Infosys was the top gainer in the Sensex pack, rising around 3 per cent, followed by Bajaj Auto, SBI, ICICI Bank, HCL Tech, Titan and Asian Paints.

On the other hand, IndusInd Bank, ONGC, HDFC Bank, Maruti and Bajaj Finserv were among the laggards.

Domestic equities recovered from the day’s low in tandem with recovery in banking stocks, said Binod Modi, Head- Strategy at Reliance Securities.

“Record foreign fund flows remain as a key driving force for the market. Strong prospects of earnings recovery, satisfactory progress on vaccination along with consistent improvement in recovery rate from COVID-19 cases, weak dollar and depressed interest rate scenario continue to act as key tailwinds for Indian equities to attract FPI flows,” he added.

Foreign portfolio investors (FPIs) purchased shares worth a net Rs 2,355.25 crore on Thursday, according to provisional exchange data.

Elsewhere in Asia, bourses in Seoul ended on a positive note, while Shanghai, Hong Kong and Tokyo were in the red.

Stock exchanges in Europe were trading on a mixed note in early deals.

Meanwhile, the global oil benchmark Brent crude futures slipped 0.35 per cent to USD 51.32 per barrel."

3:30 PM

Watch time jumped 45% in July 2020 vs same time last year: YouTube

The lockdown immensely helped YouTube's viewership in India.

PTI reports: "YouTube on Friday said watch time on the platform in India jumped 45 per cent in July this year as compared to the same period last year with regional language content being one of the strongest drivers of this growth.

Online video consumption has seen a massive growth in the past few years on the back of availability of affordable smartphones and cheap data tariffs. The pandemic-induced lockdown had further accelerated the consumption of over-the-top (OTT) services like online video and music streaming in the country.

“YouTube watch time jumped 45 per cent in July this year since the same time in 2019, with regional language content being one of the strongest drivers of this growth. According to the September 2019 Google/Kantar Video Landscape Research, 93 per cent of YouTube viewers prefer watching content in regional languages,” a statement said.

It, however, did not quantify the time spent on the platform.

YouTube has unveiled its first-ever regional language Ads Leaderboard, which comprises the top 10 most-watched ads spanning the second half of 2020.

It encompasses advertising in six regional Indian languages and is indicative of the increasing recognition by marketers that consumers are more likely to consider a purchase when they are reached in their preferred language, YouTube said.

The top ad in the tally was ‘The Taste of India by Amul’ (Tamil), followed by ‘#MassEntri with Entri App! (Malayalam) and ‘Goodknight Gold Flash’ by Goodknight (Bengali).

“Today, one out three Indians consumes online video. YouTube’s appeal is in its ability to host diversity of content, which includes languages, and build strong, authentic connections based on this. What’s heartening to see is that brands are being agile, and creating marketing assets especially to reach users in different languages,” Google Senior Director of Marketing for SEA and India Sapna Chadha said.

This first regional leaderboard is a sign for the times, and consumers can expect more memorable language advertising in 2021 on YouTube, she added."

3:00 PM

Rupee settles 3 paise higher at 73.56 against US dollar

The rupee closed the day with gains.

PTI reports: "The rupee appreciated by 3 paise to close at 73.56 (provisional) against the US dollar on Friday amid sustained foreign fund inflows and positive domestic equities.

Traders said weakness in the American currency in the overseas market supported the domestic unit.

At the interbank forex market, the local unit opened at 73.55 against the greenback and witnessed an intra-day high of 73.49 and a low of 73.57.

It finally ended at 73.56 against the American currency, registering a rise of 3 paise over its previous close. On Thursday, the rupee settled flat at 73.59 against US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading up 0.20 per cent at 90.00.

“Value erosion in dollar, excessive liquidity is driving foreign investors to bet big on Indian equities, which give the rupee a slight appreciating bias in the near term,” said Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking.

Sachdeva further noted that “73.20-73.00 remains a strong hurdle for the rupee, and with the Reserve Bank standing in the way, bouts of large-scale appreciation can be ruled out. We reckon that the RBI will prefer to keep the rupee exchange rate stable between the 73 to 74.50 band for quite some time now“.

On the domestic equity market front, BSE Sensex ended 70.35 points or 0.15 per cent higher at 46,960.69, while the NSE Nifty rose 19.85 points or 0.14 per cent to 13,760.55.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,355.25 crore on a net basis on Thursday, according to exchange data.

Brent crude futures, the global oil benchmark, fell 0.21 per cent to USD 51.39 per barrel."

2:30 PM

Tremendous scope for Australian investments in India: Goyal

The Centre rolls out the carpet for Australian investors.

PTI reports: "There is a tremendous scope for Australian companies to invest in India as the country has liberalised its foreign direct investment (FDI) in sectors like mining and defence production, Commerce and Industry Minister Piyush Goyal said on Friday.

He also expressed the hope to take forward the negotiations for the proposed free trade agreement between the countries, which is officially dubbed as a comprehensive economic partnership agreement (CEPA).

“I believe there is a tremendous scope for Australian investments also into India as we ease our FDI norms and open up different sectors like mining, and defence production. These are the areas which are of natural interest to Australia,” Goyal said at CII’s Partnership Summit.

Australia has been an attractive destination for several Indian companies particularly firms in the areas such as banking, IT, and petroleum, he said.

“We are looking forward to a faster ramp (up) of some of the companies which have faced some problems in Australia and I do hope that they will be able to get back into fast track implementation of their projects and serve the people of Australia with jobs and people of India with requisite raw materials,” the minister added.

Further, he said India’s exports to Australia are at “modest and moderate” levels and it needs to be increased for a balanced trade gap.

India’s exports to Australia in 2019-20 stood at USD 2.9 billion, while imports aggregated at USD 9.8 billion.

Speaking at the webinar, Australian Senator Simon Birmingham said: “I particularly look forward to some early progress on our re-engagement on Australia-India CEPA“.

He said that as the cricket teams of both the countries are engaged in fields right now, “let’s hit the ball for six by getting a quick move on this agreement and scoring some quick runs“.

He added that India has decided not to join right now the mega trade pact - RCEP (Regional Comprehensive Economic Partnership) agreement -- and from Australian perspective, the “doors remain firmly open”."

2:00 PM

Pinching people’s pockets: Retail inflation likely to stay elevated in short term

The inflation problem is back.

PTI reports: "After unseasonal rains, supply disruptions and pandemic-induced woes pushed retail inflation well over the Reserve Bank’s comfort zone in 2020, the scenario is likely to stay that way at least in the short term as economic recovery slowly gains foothold.

For most part of this year, pricier food items pushed the retail inflation, based on Consumer Price Index (CPI), higher in the range of 6.58-7.61 per cent, except for March when the reading was 5.91 per cent.

Experts believe retail inflation is likely to average around 6.3 per cent this fiscal and mostly will remain sticky going forward owing to pick-up in demand across sectors.

In indications of supply chain bottlenecks, wholesale price-based inflation was mostly benign this year, touching a low of (-) 3.37 per cent in May and a maximum of 3.1 per cent in January.

The economic recovery is witnessing early signs of revving up after being ravaged by the coronavirus pandemic and a historic nationwide lockdown for a few months that began in late March to curb COVID-19.

In a rare instance, no retail inflation data was published by the government in April and May as field visits by officials could not happen during the lockdown.

Consumers shelled out more to buy ‘Tomato, Onion and Potato’ or the TOP. The trio is also the focus of the central government’s Operation Greens initiative announced two years ago to ensure their adequate supplies throughout the year without any price shocks.

TOP ruled as high as Rs 60-80 per kilogram (kg) at some or the other point of time during the year as unseasonal rains affected output and coronavirus-induced lockdown caused supply disruptions, among other factors.

Even as prices of cereals may soften due to bumper kharif crop arrivals and winter-season vegetables, other food prices are expected to remain elevated, according to the Reserve Bank of India (RBI).

Also, crude oil prices have started to gain momentum after a lull as economic activities have started getting back to normal, though slowly.

The RBI expects retail inflation to be at around 5.8 per cent by the end of March 2021, and will further ease to 5.2-4.6 per by September next year, not a very uncomfortable position vis-a-vis its mandate of 4 per cent with a bias of 2 per cent on either side (+/-2 per cent).

At the policy review earlier this month, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) was of the view that inflation is likely to remain elevated, barring transient relief in winter months from prices of perishables.

“Our paramount objective is to support growth while ensuring that financial stability is maintained and preserved at all times,” Das said on December 4.

With demand now strengthening, the concern is that despite some easing of supply and logistical disruptions, inflation will not ease meaningfully in the near term, other than a base effect driven moderation, rating agency Icra’s Principal Economist Aditi Nayar said.

She noted that with demand strengthening and some households having greater visibility on their income outlook, inflation expectations are expected to remain high."

1:30 PM

Oil slips as surge in COVID-19 cases threatens demand

Low demand continues to be a trouble for oil even as economies open up.

Reuters reports: "Oil prices slid from nine-month highs on Friday, with soaring COVID-19 cases seen as a threat to near-term fuel demand and a strengthening of the U.S. dollar also having a negative impact.

U.S. West Texas Intermediate (WTI) crude futures slipped 14 cents or 0.29%, to $48.22 a barrel at 0757 GMT, while Brent crude futures fell 20 cents, or 0.39%, to $51.30.

More than 73.65 million people have been reported to be infected by the coronavirus globally and 1,654,920 have died, according to a Reuters tally on Friday.

The spike in cases is leading to tough restrictions on travel, impacting fuel demand and any economic recovery.

Meanwhile, there was more evidence that the world's largest economy's recovery from the pandemic recession was faltering as data showed the number of Americans filing first-time claims for jobless benefits unexpectedly rose last week.

Both oil contracts had climbed on Thursday, on optimism around progress on a COVID-19 relief bill, strong Asian refining demand and a slide in the dollar to a two-and-a-half year low.

With crude priced in dollars, a strengthening of the U.S. currency on Friday made oil more expensive for buyers holding other currencies.

“The prospects of (a) stimulus deal and vaccine rollout have largely been digested by market participants and thus been more or less priced in, rendering (the) oil price vulnerable to a pullback when profit taking kicks in,” Margaret Yang, a strategist at DailyFX, said.

ANZ Research said with U.S. COVID-19 infections hitting new daily records, and restrictions tightening in Japan, pressure is growing on the Organization of the Petroleum Exporting Countries (OPEC), Russia and their allies, together called OPEC+.

OPEC+ plans to add 500,000 barrels per day of supply in January, in a first step toward a 2 million bpd target.

“While OPEC+ has shown it's ready and willing to adapt to evolving market conditions, which should protect crudes value in the longer term, near-term challenges may still weigh on recent bullish momentum,” OANDA analyst Craig Erlam wrote in a note."

1:00 PM

Gold set for third weekly gain as traders eye U.S. fiscal stimulus

Gold prices showed some strength this week.

Reuters reports: "Gold prices retreated on Friday as the dollar rebounded, but were still on track for a third straight weekly gain after a recent rally driven by progress on a U.S. stimulus deal. Spot gold dipped 0.3% to $1,880.46 per ounce by 0724 GMT. For the week, it was up 2.3%. U.S. gold futures fell 0.2% to $1,886.30 per ounce.

“The U.S fiscal stimulus is more or less priced traders are trying to lock in profit before the weekend,” said Margaret Yang, a strategist at DailyFX. U.S. Congressional lawmakers scrambled to pass a coronavirus aid package on Thursday with both parties saying that failure to reach an agreement was no longer an option.

While a stimulus deal could spur gold prices higher, a more sustained ascent would require signs of a significant pick-up in inflationary pressures, said FXTM market analyst Han Tan. The U.S. dollar rose 0.1%, just above a more than two-year trough, dimming gold's appeal to other currency holders. A break above the $1,892 area with support from a dovish U.S Federal Reserve and a weaker dollar could signal further upside ahead with resistance at $1,910, Yang said.

Analysts also said gold would find support from the Fed's promise to continue its bond-buying programme until ”substantial further progress” is seen in restoring full employment and hitting its 2% inflation target.

“Given the rising inflation expectations, weakening dollar and lofty valuations in some risky assets, demand for safe-haven inflation hedges should remain supported next year, continuing to push gold towards our $2,300/toz target,” Goldman Sachs said in a note.

Potentially escalating geo-political tensions, the United States is set to add dozens of Chinese companies to a trade blacklist on Friday, sources said. Silver slipped 1.4% to $25.70 an ounce, Platinum fell 0.7% to $1,036.60 and palladium eased 0.1% to $2,337.61 but was up 0.7% for the week."

12:00 PM

Govt. extends relaxed norms for onion imports till Jan. 31

The government on Thursday extended relaxed norms for onion imports for one and a half months till January 31 next year, to boost domestic supply and check the retail prices of the key kitchen staple.

To facilitate import of onion, the government had on October 21 relaxed the conditions for fumigation and additional declaration on the Phytosanitary Certificate (PSC) under the Plant Quarantine Order (PQ), 2003 for import up to December 15, 2020.

In an official statement, the Agriculture Ministry said it has decided to extend the relaxation for imports up to January 31, 2021, in the light of public concern over high prices of onion in the market.

Stating that the relaxation will be subject to certain conditions, the Ministry said the consignments of imported onions, which arrive in Indian ports without fumigation and such endorsement on the PSC, would be fumigated in India by the importer through an accredited treatment provider.

Read more

11:30 AM

U.S. long-term mortgage rates fall; 30-year at 2.67%

U.S. long-term mortgage rates declined this week to record low levels for the 15th time this year against the backdrop of an economy ravaged by the pandemic.

Mortgage finance giant Freddie Mac said on December 17 that the average rate on the 30-year fixed-rate home loan fell to 2.67% from 2.71% last week. A year ago, the benchmark rate stood at 3.73%.

The average rate on 15-year fixed-rate loans eased to 2.21% from 2.26%.

The housing market continues as a rare bright spot in the stalled U.S. economy, as home-loan rates have trended downward through most of this year.

That has bolstered demand from would-be homebuyers or people looking to refinance existing mortgages.

Read more

11:00 AM

Fed balance sheet sees huge jump


10:40 AM

Rupee opens 5 paise higher at 73.54 against US dollar

The rupee seemed to buck the trend seen in stocks this morning.

PTI reports: "The rupee appreciated 5 paise to 73.54 against the US dollar in opening trade on Friday as the weakness of the American currency and optimism surrounding the US stimulus aid package supported the domestic unit.

Traders said sustained foreign fund inflows also strengthened investor sentiment.

At the interbank forex market, the domestic unit opened at 73.55 against the greenback, then inched higher and touched 73.54, registering a rise of 5 paise over its previous close.

On Thursday, rupee settled flat at 73.59 against US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading up 0.21 per cent at 90.01.

“The dollar crashed on Thursday as hopes of stimulus and Brexit deal improved risk appetite and weighed on the safe haven appeal of the greenback. The dollar index broke below the 90 mark (for the first time) since January 2018,” Reliance Securities said in a research note.

However, Asian currencies were weak this morning and RBI could be present in the markets and could cap gains for the domestic unit, the note added.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 152.49 points lower at 46,737.85, and the broader NSE Nifty fell 47.45 points and was trading at 13,693.25.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,355.25 crore on a net basis on Thursday, according to exchange data.

Brent crude futures, the global oil benchmark, fell 0.33 per cent to USD 51.33 per barrel."

10:20 AM

Retail NPAs will be higher in second half of FY21: Axis Bank

Retail non-performing assets (NPAs) will be higher in the third and fourth quarter of FY21 and will go back to the pre-COVID-19 levels only in the new fiscal year, Axis Bank said on Thursday.

The third-largest private sector lender, however, said that the asset quality situation was much better than what was feared initially, and stressed that it had adequate provisions to take care of the reverses.

It may be noted that the damage to the economy because of the pandemic resulted in job losses or salary cuts, in turn impacting the loan repayment abilities in the otherwise resilient retail segment.

Given the fact that a lot of people lost their jobs, some had to take salary cuts and some industries were badly affected, it will have some impact on delinquency and portfolio collections.

“But these numbers are much lower than what we had anticipated,” head of retail lending Sumit Bali told reporters.

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10:00 AM

Indian shares fall from record highs as banks drag

A sharp fall in the indices this morning.

Reuters reports: "Indian shares slipped from record highs on Friday, dragged down by banking stocks, as investors locked in gains after indexes scaled fresh peaks in 18 of the past 27 sessions.

The blue-chip NSE Nifty 50 index fell 0.34% to 13,694.20 by 0446 GMT, while the benchmark S&P BSE Sensex was down 0.33% at 46,735.12. However, both indexes are on track for a seventh straight week of gains, a streak not seen since April last year.

“(The markets) have run up one way for quite some time,” said Samrat Dasgupta, chief executive officer at Esquire Capital Investment Advisors in Mumbai. “We will have all dips being bought in.”

As the end of the year nears, global markets have been swinging between broader optimism about COVID-19 vaccines and a global economic recovery and concerns about still rising infections.

However, Indian markets have mostly outperformed other Asian markets this year, boosted by record inflows from foreign institutional investors (FIIs), vaccine progress globally and signs of a nascent economic recovery in the country.

“I don't see any big correction unless there is some interruption in liquidity. We are seeing average buying of at least 20 billion rupees ($271.96 million) per day from the FIIs,” Dasgupta said.

In Mumbai trading, the Nifty IT index rose 1.6%, while the Nifty Bank Index fell 1.2%. Lender HDFC Bank was the top drag to the Nifty 50, falling 1.8%.

Axis Bank fell 0.8%, after local media reports said that the private-lender expected an increase in retail non-performing loans in the third and fourth quarters of this financial year.

Defence manufacturers and suppliers Hindustan Aeronautics Ltd and Bharat Dynamics rose between 0.2% and 1.2%. India's defence ministry on Thursday approved proposals to procure equipment worth 270 billion rupees from the domestic industry."

9:30 AM

Coca-Cola laying off 2,200 workers as it pares brands

The Coca-Cola Company has said that it was laying off 2,200 workers, or 17% of its global workforce, as part of a larger restructuring aimed at paring down its business units and brands.

The Atlanta-based company said on Thursday that around half of the layoffs will occur in the U.S., where Coke employs around 10,400 people. Coke employed 86,200 people worldwide at the end of 2019.

The coronavirus pandemic has hammered Coke’s business, as sales at places like stadiums and movie theaters dried up due to lockdowns. Its revenue fell 9% to $8.7 billion in the July-September period.

The downturn forced the company to accelerate a restructuring that was already underway.

“We’ve been challenging legacy ways of doing business and the pandemic helped us realize we could be bolder in our efforts,” Coke Chairman and CEO James Quincey said during an earnings call in October.

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Printable version | Aug 6, 2021 4:37:04 AM |

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