The benchmark stock indices opened the day on a negative note as Fed policy change continues to have an impact on stocks and the rupee.
Join us as we follow the top business news through the day.
Sensex, Nifty end flat after choppy trade
A volatile day comes to an end.
PTI reports: "Equity benchmarks Sensex and Nifty ended on a flat note after a volatile session on Friday amid a largely negative trend in global equities.
The 30-share BSE Sensex ended 21.12 points or 0.04 per cent higher at 52,344.45, while the broader NSE Nifty inched 8.05 points or 0.05 per cent lower to 15,683.35.
ONGC was the top loser in the Sensex pack, shedding around 4 per cent, followed by NTPC, PowerGrid, M&M, Nestle India, SBI and HCL Tech.
On the other hand, HUL, Bajaj Auto, Bharti Airtel, Bajaj Finserv were among the gainers.
It was an extremely volatile trading day for domestic equities with benchmark Nifty recovering sharply from day’s low, said Binod Modi Head-Strategy at Reliance Securities.
Barring FMCG and pharma, all key sectoral indices traded in the red. Metals, PSU banks, and realty indices witnessed steeper contraction.
Further, heavy profit-booking was seen in midcap and smallcap stocks after sharp rally in recent weeks, Modi noted.
Elsewhere in Asia, bourses in Hong Kong and Seoul ended on a positive note, while Shanghai and Tokyo closed lower.
Stock exchanges in Europe were largely trading with losses in mid-session deals.
International oil benchmark Brent crude was trading 0.73 per cent lower at USD 72.55 per barrel."
Zara India posts loss of Rs 41 cr in FY21; revenue down 28 pc to Rs 1,126 cr
Luxury retailer hit hard by the pandemic.
PTI reports: "Spain's Inditex, which owns luxury fashion brand Zara, posted a loss of Rs 41 crore in India for the financial year ended March 31, 2021.
Its revenue also declined by 28.3 per cent to Rs 1,126 crore during the pandemic-hit 2020-21.
The company had reported a profit after tax of Rs 104.05 crore and a revenue of Rs 1,570.54 crore in the financial year 2019-20.
Zara operates in India through the association of its parent Spanish clothing company Inditex with the Tata group firm Trent Ltd - Inditex Trent Retail India Private Limited (ITRIPL). The Inditex group of Spain owns 51 per cent while Trent has 49 per cent.
"During the year under review, the Zara entity recorded revenues of Rs 1,126 crore and loss after tax of Rs 41 crore,” said the latest annual report of the Tata group firm Trent Ltd.
Zara is presently operating 21 stores in India, in 11 cities.
"The incremental store openings for Zara continue to be calibrated with focus on presence only in very high-quality retail spaces," it said.
Trent has two separate associations with Inditex -- one to operate Zara stores and the other for Massimo Dutti stores in India. The entities essentially facilitate the distribution of Zara and Massimo Dutti products in India through their respective stores.
Meanwhile, Massimo Dutti, which operates three stores in India also reported a 49.3 per cent decline in its revenues of Rs 34 crore in FY21.
It had recorded a revenue of Rs 67 crore in the financial year ended on March 31, 2020.
Trent said the business of these entities is essentially limited to the distribution of Zara and Massimo Dutti products in India. Both the entities are required to source merchandise only from the Inditex Group and also the choice of product and related specifications are at the latter’s discretion.
Zara competes with the likes of other foreign brands such as H&M, UNIQLO in India."
Petrol crosses Rs 100 in Bengaluru - 3rd metro after Mumbai and Hyderabad
Fuel prices show no signs of slowing.
PTI reports: "Bengaluru on Friday became the third metro city in the country to see petrol price cross Rs 100 per litre mark after fuel prices were raised yet again.
Petrol price was hiked by 27 paise per litre and diesel by 28 paise, according to a price notification of state-owned fuel retailers.
The hike -- 26th in less than seven weeks -- pushed fuel prices across the country to new historic highs.
In Delhi, petrol hit an all-time high of Rs 96.93 a litre, while diesel is now priced at Rs 87.69 per litre.
Fuel prices differ from state to state depending on the incidence of local taxes such as VAT and freight charges.
And because of this, petrol retails at over Rs 100 per litre mark in eight states and union territories -- Rajasthan, Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana, Karnataka, Jammu and Kashmir and Ladakh.
While several districts of Karnataka already had petrol price over Rs 100, state capital Bengaluru reached the mark on Friday. Petrol in the city is now priced at Rs 100.17 per litre and diesel at Rs 92.97.
Bengaluru is the third metro city to see Rs 100 per litre petrol price. Mumbai on May 29 became the first metro in the country where petrol was being sold at over Rs 100 a litre. Petrol now costs Rs 103.08 a litre in the city and diesel comes for Rs 95.14.
The fuel touched that mark in Hyderabad earlier this week.
While Leh already had Rs 100 per litre petrol, Srinagar joined the league on Friday. Petrol at Indian Oil Corp (IOC) pumps in the city costs Rs 99.99 a litre and that on HPCL outlets at Rs 100.04.
Rates vary by a few paise from company to company in a city.
Sri Ganganagar district of Rajasthan near the India-Pakistan border was the first place in the country to see petrol hitting Rs 100 a litre mark in mid-February and last week it also earned the distinction of diesel crossing that psychological mark.
Petrol in the city is sold at Rs 108.07 a litre - the highest rate in the country, and diesel comes for Rs 100.82.
Rajasthan levies the highest VAT on petrol and diesel in the country, followed by Madhya Pradesh, Maharashtra, Andhra Pradesh and Telangana.
The hike on Friday was the 26th increase in prices since May 4, when state-owned oil firms ended a 18-day hiatus in rate revision they observed during assembly elections in states like West Bengal.
In 26 hikes , petrol price has risen by Rs 6.53 per litre and diesel by Rs 6.96 a litre.
Oil companies revise rates of petrol and diesel daily based on the average price of benchmark fuel in the international market in the preceding 15 days, and foreign exchange rates.
International oil prices have firmed in recent weeks in anticipation of demand recovery following the rollout of vaccination programme by various countries. Also, the rupee has weakened against the US dollar, making imports costlier."
India's Paytm seeks shareholder approval for $1.6 bln sale of new stock
Shareholder dilution becomes a concern.
Reuters reports: "Indian digital payments firm Paytm is seeking shareholder approval to sell up to 120 billion rupees ($1.62 billion) in new stock in what could be the South Asian country's biggest-ever initial public offering at a total of $3 billion.
Paytm, which counts China's Alibaba and Japan's SoftBank as backers, will sell new shares and will also have an option to retain an over-subscription of up to 1%, the company said in a notice for an extraordinary general meeting (EGM) of shareholders in Delhi on July 12.
The company is aiming to raise $3 billion via the public listing on Indian bourses, a source familiar with the matter told Reuters.
It has hired banks JPMorgan Chase, Morgan Stanley , ICICI Securities and Goldman Sachs for the IPO, the source added, declining to be identified as the matter is private.
At the EGM, Paytm also plans to propose that its founder, Vijay Shekhar Sharma, be relieved from his role as the company's "promoter", the company said in the notice.
Paytm did not respond to a request for comment.
Launched a decade ago as a platform for mobile recharging, Paytm grew quickly after ride-hailing firm Uber listed it as a quick payment option. Its use swelled further in 2016 when a ban on high-value currency bank notes boosted digital payments.
Paytm has since branched out into services including insurance and gold sales, movie and flight ticketing, and bank deposits and remittances."
India's roadside restaurateurs count cost of pandemic
The human cost of the pandemic.
Reuters reports: "Asin Sharma lies idle on a cot near his restaurant by a highway linking India's capital New Delhi with the northern state of Punjab.
Few motorists stop at the line of five open-fronted roadside eateries on this stretch of highway. Those who do venture cautiously inside ask only for tea and water. The restaurant's tandoor, a traditional clay oven used for making flatbreads, sits cold and unused.
"We are in a very bad situation and the restaurant is on the verge of dying," said the 35-year-old. "We have no work and so many expenses to bear. Our condition is pathetic."
The eateries, or "dhabas" are ubiquitous in India. Tens of thousands line national highways but many are now struggling to survive as customers stay at home despite several state governments relaxing coronavirus curbs on movement.
Many dhabas are family-run and employ millions, including local people and migrant workers. The problems they now face are part of a wider malaise in the travel and leisure industry, and the Indian economy in general.
India on Friday reported 62,480 new daily cases, down significantly from a peak of more than 400,000 on May 9 during its second wave of COVID-19 infections. Given low vaccination rates, experts are already warning of a third wave later this year.
Economists fear the sector faces weakness into next year, even if the government can vaccinate the majority of India's near 1.4 billion people. Only 6% are fully vaccinated now.
Last year, the government extended federal guarantees on bank loans for small businesses including hotels and restaurants, as well as a moratorium on some bank loans through to the end of March. Some restaurant owners have already had notices from banks to repay these loans.
Finance ministry officials last month said the government could consider more measures for restaurants later this year. A spokesman declined to comment further on the plans.
Restaurant owners interviewed said many could be forced to shut their businesses permanently in the absence of further government support. Others said they were likely to delay bank loans, defer payments and sell properties if the third wave does hit. Most have cut salaries and laid off staff.
Sonu Sharma, manager of Mannat Haveli Restaurant, says in normal times the restaurant is so busy they have a staff of 300, but now there are only about 50 to 60 people at work.
These unemployed migrant workers have been forced to fall back on low-paying farm work. The huge job losses in the restaurant sector reflect a broader rise in India's unemployment, which almost doubled to 11.9% in May from 6.5% in March, according to CMIE, a Mumbai-based think tank.
On the highway between New Delhi and India's financial hub Mumbai, Hans Restaurant, which used to thrive on catering for weddings and birthday parties, has tried to survive by selling takeaway food, but there are not enough orders, said manager Kailash Chand Meghwal.
"We never thought we would see such a day," he said. "Almost 80% of our staff have gone back to their villages.""
India Pesticides' Rs 800-cr IPO to open on Jun 23; price band set at Rs 290-296/share
Another IPO in the offing.
PTI reports: "Agrochemical company India Pesticides on Friday said it has fixed a price band of Rs 290-296 a share for its Rs 800-crore initial share sale.
The three-day initial public offer (IPO) will open on June 23 and conclude on June 25. The bidding for anchor investors will open on June 22, according to the company.
The Rs 800-crore IPO comprises fresh issuance of equity shares amounting to Rs 100 crore and an offer of sale for equity shares aggregating up to Rs 281.4 crore by promoter Anand Swarup Agarwal and up to Rs 418.6 crore by other selling shareholders.
The Uttar Pradesh-based company may decide to undertake a pre-IPO placement of Rs 75 crore subject to consultation of the merchant bankers.
Proceeds of the fresh issue would be used towards funding the working capital requirements and general corporate purposes.
India Pesticides is an R&D focused agrochemical technical company, which has growing formulations business in herbicides, insecticides and fungicide segments. It also manufactures active pharmaceutical ingredients (APIs).
It is the only Indian manufacturer and amongst the top five companies globally for several technical products such as folpet and cynomoxanil, used to make fungicides that control fungal growth across a variety of crops.
India Pesticides currently operates from two manufacturing facilities at Lucknow and Hardoi in Uttar Pradesh with an aggregate capacity of 19,500 MT for technicals and 6,500 MT for the formulations vertical.
Axis Capital and JM Financial are the book running lead managers to the issuer."
CII urges ₹3-lakh crore stimulus
Mooting ‘urgent’ fiscal support to shore up the economy, industry body CII on Thursday said the government has room to provide a ₹3-lakh crore stimulus and advocated a reduction in fuel taxes and enhancement in cash transfers to households to revive demand.
Stressing that livelihoods had taken a severe hit due to the COVID-19 pandemic, Confederation of Indian Industry (CII) president T.V. Narendran called for employment generation to be the central focus of policy measures and an expansion of the central bank’s balance sheet to accommodate a fiscal push of 1.3% of GDP.
“The ongoing second wave has had a significant impact on economic activity in this quarter and a large part of the labour force faced health issues, either themselves or in their families,” Mr. Narendran said, stressing that health exigencies and job losses had squeezed spending ability.
Personal care brand MyGlamm ropes in Shraddha Kapoor
Direct to consumer personal care brand MyGlamm roped in Shraddha Kapoor as its brand ambassador on Thursday.
The actress also made an undisclosed investment in the company which is backed by a group of investors, including Ascent Capital, Amazon and Wipro Consumer Care from whom the company raised ₹175 crore in March this year.
“We have always admired Shraddha for her beauty and cruelty-free philosophy, and how she connects and resonates with her over 60 million Instagram followers. Shraddha as an investor in MyGlamm and join us on this journey of creating the country’s largest beauty company,” said Darpan Sanghvi, Founder and CEO, MyGlamm.
Indian shares fall as financial stocks, Reliance Industries weigh
An update on the stock bourses.
Reuters reports: "Indian shares were weighed down on Friday by losses in financials stocks and Reliance Industries, while investors assessed the impact of the U.S. Federal Reserve's hawkish turn earlier this week.
The blue-chip NSE Nifty 50 index fell 0.77% to 15,571.30 and the benchmark S&P BSE Sensex lost 0.67% to 51,972.41 by 0500 GMT.
The Nifty 50 and Sensex are set for their first weekly fall in five, after shedding 0.68% and 0.29%, respectively, as of Thursday's close. The U.S. Federal Reserve's indication that it would raise interest rates sooner than expected has weighed on the markets.
"Most of the positives (easing of COVID-19 restrictions due to fall in daily infections) are already factored in by the market. It still looks to be a buy-on-dips kind of market. So, at lower levels, we might see some buying coming in and that could give a support to the market," said Gaurav Garg, head of Research at CapitalVia Global Research.
ICICI Bank Ltd, State Bank of India and Reliance Industries Ltd were among the top drags on the Nifty 50, losing between 0.6% and 2.1%. Shares of Reliance have gained in the last five trading sessions out of eight.
Countering some of these losses were software services firms Infosys Ltd and Tata Consultancy Services Ltd , rising 0.6% and 0.2%, respectively.
The Nifty IT index was up 0.14%. For the week so far, including Friday's gain, it is up 1.5%.
Adani Ports and Special Economic Zone Ltd was also among the top boosts on the Nifty 50, gaining 1.4% after eight straight sessions of losses. The stock is headed for its worst ever weekly fall even after the company this week rejected a media report that said accounts of three foreign investor funds that own the Group's stocks were frozen."
Sugar season likely to end with lesser stocks
The closing balance of sugar stocks in the country during the current season ending September is expected to be 20-25 lakh tonnes lesser than the previous season, according to the Indian Sugar Mills Association (ISMA).
The closing stock last season (October 2019-September 2020) stood at 107 lakh tonnes, ISMA said.
Mills have produced 306.65 lakh tonnes between October last year and June 15 this year. This is 35.54 lakh tonnes higher than last season’s production for the corresponding period.
According to the sugar mills and ISMA’s estimates, total sugar sales by mills in May stood at 22.35 lakh tonnes against the domestic sales quota of 22 lakh tonnes. “There is a misunderstanding in the market that the demand for sugar has fallen in the last couple of months,” ISMA said.
Rupee falls 15 paise to 74.23 against U.S. dollar in early trade
The Indian rupee slumped 15 paise to 74.23 against the U.S. dollar in opening trade on June 18 as the U.S. dollar extended gains, a day after the U.S. Federal Reserve surprised markets with its hawkish statement.
Forex traders said muted domestic equities also weighed on investor sentiments.
At the interbank foreign exchange, the rupee opened lower at 74.10 against the dollar and lost further ground to touch 74.23, registering a fall of 15 paise over its previous close.
On June 17, the rupee had settled at 74.08 against the U.S. dollar.
The rupee started on a weaker note this Friday against the greenback as the U.S. dollar extended gains a day after the Fed’s hawkish statement, Reliance Securities said in a research note.
Sensex rises over 200 pts in early trade; Nifty tests 15,750
Yet another poor start to the day for stocks.
PTI reports: "Equity benchmark Sensex jumped over 200 points in early trade on Friday, tracking gains in index-heavyweights Infosys, HDFC twins and ICICI Bank amid a largely positive trend in global equities.
The 30-share BSE index was trading 220.53 points or 0.42 per cent higher at 52,543.86 in initial deals. Similarly, the broader NSE Nifty advanced 53.70 points or 0.34 per cent to 15,745.10.
ONGC was the top loser in the Sensex pack, shedding over 2 per cent, followed by PowerGrid, M&M, Maruti, L&T, NTPC and Titan.
On the other hand, Bajaj Finserv, Sun Pharma, HCL Tech, Infosys and Dr Reddy’s were among the gainers.
In the previous session, Sensex ended 178.65 points or 0.34 per cent lower at 52,323.33. The broader NSE Nifty declined 76.15 points or 0.48 per cent to 15,691.40.
Foreign institutional investors (FIIs) were net sellers in the capital market as they offloaded shares worth Rs 879.73 crore on Thursday, as per provisional exchange data.
According to Binod Modi Head-Strategy at Reliance Securities, domestic equities look to be modestly good as of now.
Weak global cues led Indian equities to see profit booking in last couple of days, he said, adding that more than 100 per cent improvement in advance tax/direct tax collections in 1QFY22 so far indicates sustainable corporate earnings in coming quarters along with strong financial resources for the government to maintain budgeted fiscal deficit.
Further, easing of business curbs by states led by sharp decline in COVID-19 positivity rates and reduction in daily caseload continues to offer comfort to investors, he noted.
Elsewhere in Asia, bourses in Hong Kong, Seoul and Tokyo were trading on a positive note, while Shanghai was in the red in mid-session deals.
US equities ended on a mixed note in the overnight session, as S&P 500 and Dow Jones ended on a negative note, while technology stocks made a comeback and pushed Nasdaq to near a record close.
International oil benchmark Brent crude was trading 0.92 per cent lower at USD 72.41 per barrel."
Indian IT is on track to hit $300-350 billion revenues by 2025, says Nasscom
With one of the strongest deal pipelines and a bright business outlook, the Indian IT industry was on track to meet its vision of $300-350 billion revenues by 2025, Nasscom said on Thursday.
The apex body said the Industry would continue to be a net creator of jobs and was committed to people-centric innovation, relentless talent focus, and delivering a superior transformative customer experience.
The industry continued to be a net hirer of skilled talent, adding 1,38,000 people in FY2021, and robust hiring plans for FY22 with top players, TCS, Infosys, Wipro, HCL and Tech Mahindra, alone planning to add over 96,000 employees, it said.
The apex body was responding to certain media reports about the apparent job losses in the Indian IT/BPM industry.
