The benchmark stock indices opened the day on a strong note, recuperating losses from yesterday in the first hour of trading.
Join us as we follow the top business news through the day.
Govt looking into WhatsApp privacy policy changes: Prasad
WhatsApp could face further scrutiny.
PTI reports: "Amid a user backlash over a new privacy policy of WhatsApp, the Indian government on Tuesday said it is looking into the changes made by the popular messaging app, and asserted that sanctity of personal communication needs to be maintained.
Speaking at the 15th India Digital Summit, Communications, Electronics and IT Minister Ravi Shankar Prasad noted that national security will be central with regard to exposure of international companies, including those from China, in the country.
WhatsApp has drawn massive criticism from users globally, including India over concerns that data was being shared with its parent company, Facebook. WhatsApp, on its part, has maintained that messages on the platform are end-to-end encrypted and that neither WhatsApp nor Facebook can see the private messages on WhatsApp's platform.
"This is an issue that my department is (working) on, and being the final authority, it will not be proper for me to make comments. But except to flag one thing very clearly. Be it WhatsApp, be it Facebook, be it any digital platform. You are free to do business in India but do it in a manner without impinging upon the rights of Indians who operate there," Prasad said.
He added that the sanctity of personal communications needs to be maintained.
"I've only spoken on principles, given that my department is working. I have to await that," he said.
Earlier this month, WhatsApp had informed users of an update in its terms of service and privacy policy around how it processes user data and partners with Facebook to offer integrations across the social media giant's products. Users had till February 8, to agree to the new terms in order to continue using the platform.
However, WhatsApp drew flak from users across the globe, including India that ranks among the biggest markets for WhatsApp with over 400 million users.
Following this, WhatsApp has now decided to delay the rollout of its new policy update to May 15, and said it will "do a lot more to clear up the misinformation around how privacy and security works on WhatsApp".
WhatsApp had also stated that it is open to answering any questions from the government on the issue and that it remains committed to the privacy and security of users across India.
Asked about participation of Chinese companies in offering their products in India, Prasad said "it will neither be prudent nor desirable for me to take the name of any country, except to highlight the general policy initiative which we are following".
"Yes, we banned apps because the issue was data privacy, issue was national security, issue was national sovereignty. Therefore, in any exposure of companies, national security angle will also be taken, be it private or government. As far as the relevant financial routes are concerned, some changes have also taken place with regard to countries having physical adjacency with India," he said.
Sharing his views about data, Prasad said data must be procured through free consent, it must be used for the objective for which it has been collected, and the data fiduciary who has procured that data must ensure proper safety and sanctity of that data.
"I do acknowledge the implicit need for data movement across the globe to keep digital commerce intact. But the ground rule of that movement must be very clearly laid out. Next, there must be the reciprocity in the data sharing of the world. And again, we shall never compromise on our digital sovereignty," he said.
Prasad said India produces billions of data with its population of 1.3 billion people.
"I want India to become a big centre of data economy in the future. When I talk about the data economy, I mean data cleaning, data processing and data innovation. India has huge potential to become a data refinery... Therefore, the data economy must prosper in India by developing a complete ecosystem," he said.
He further stated that the "world is also looking towards our data law which we are going to bring very soon"."
China’s economy grows 2.3%, slowest pace in 44 years
China said on Monday its economy expanded in 2020 by 2.3% , the slowest pace of growth since the end of Mao Zedong’s Cultural Revolution in 1976.
China will, however, likely be the only major economy to have avoided a contraction in a pandemic-hit year, underlining its strong recovery after weeks of lockdown at the start of the year brought economic activity in the Asian giant to a near-standstill.
China’s economy contracted 6.8% in the first quarter. The stringent lockdown did, however, allow the country to broadly curb the spread of COVID-19 at home by the summer. The economy recovered to grow 3.2% in the second quarter, 4.9% in the third and 6.5% in the last quarter of the year.
While China is currently dealing with the return of clusters of local outbreaks, the fact that the spread was limited and controlled meant the impact on the economy would be “controllable”, the head of China’s National Bureau of Statistics (NBS) in Beijing, Ning Jizhe, told reporters.
‘Refine quality of expenditure to aid fiscal sustainability’
Maintaining and improving the quality of expenditure would help address the objectives of fiscal sustainability while supporting growth, RBI Governor Shaktikanta Das said on Saturday.
“As per IMF’s calculations, the total fiscal support in response to COVID-19 amounted to about 12% of global GDP by mid-September 2020,” Mr. Das said while delivering the Nani Palkhivala Memorial Lecture online on the subject, ‘Towards a Stable Financial System’. “Global public debt is said to have reached 100% of GDP in 2020. As a result, most economies are expected to emerge from the pandemic with higher deficits and debt vulnerabilities.”
He said although the scale of fiscal spending was expected to breach the quantitative targets of fiscal prudence across most economies in the short-run, it was crucial in the context of the pandemic from the perspective of the welfare aspect of public expenditure.
Indian shares rise over 1% on boost from Reliance, HDFC
An update on stocks.
Reuters reports: "Indian shares rose more than 1% on Tuesday as heavyweights Reliance and Housing Development Finance Corp provided a boost, with investors eyeing upbeat global cues ahead of a new presidency under U.S. President-elect Joe Biden.
The blue-chip NSE Nifty 50 index gained 1.2% to 14,447 and the benchmark S&P BSE Sensex climbed 1.2% to 49,118.09 by 0540 GMT. The Nifty and the Sensex had hit record highs last week before sliding in the past two sessions.
"A new U.S. president is taking over and a lot of positive announcements are coming in, which could keep the markets alive," Rusmik Oza, head of fundamental research at Kotak Securities in Mumbai, said, referring to stimulus plans under Biden's regime.
Janet Yellen, Biden's nominee to run the Treasury Department, is also set to tell the Senate Finance Committee that the government must "act big" with its next coronavirus relief package.
Among individual shares and sectors, Reliance Industries , which has lost about 9% since October, rose 2%, while Housing Development Finance Corp gained 1.7%, making them the top boosts to the Nifty 50 index.
"High, delivery-based buying in these stocks indicate their improving prospects," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"Further 'big stimulus' (in the U.S.) along with the huge liquidity created by the unprecedented monetary stimulus can keep markets buoyant. But, there is a risk of bubble valuation," he said.
Shares of Mindtree Ltd rose 2% after the information technology services provider reported strong December-quarter results. The country's largest automaker Maruti Suzuki India Ltd jumped 2% on its decision to raise car prices."
Infosys gets Google Cloud Partner status
Infosys said it had been accredited with the Google Cloud Partner Specialisation in the data and analytics space. It is among the top global system integrators to be accredited with this specialisation, claimed the company. Infosys has achieved this recognition by successfully demonstrating end-to-end capabilities on Google Cloud including data ingestion and warehousing on the cloud, as per the firm.
The system integrator has showcased technical proficiency, robust methodology, strong industry expertise, and success in specialised data and analytics solutions and service areas. These data and analytics offerings, part of Infosys Cobalt, together with AI capabilities help migrate workloads to Google Cloud, modernise data landscapes, and optimise costs paving the way for AI and cloud-native digital transformation for enterprises, Infosys further said.
The debt question facing Janet Yellen
Rupee rises 13 paise to 73.15 against US dollar in early trade
The rupee's performance mirrored that of stocks at open.
PTI reports: "The rupee appreciated 13 paise to 73.15 against the US dollar in opening trade on Tuesday as positive domestic equities and weakness in the American currency boosted investor sentiment.
At the interbank forex market, the domestic unit opened at 73.16 against the US dollar and inched higher to 73.15 against the greenback, registering a rise of 13 paise over its previous close.
On Monday, the rupee had settled at 73.28 against the American currency.
"The US dollar has weakened across the board overnight with the euro back up to 1.21 levels," Abhishek Goenka, Founder and CEO, IFA Global said adding that rupee is likely to trade in 73.05-73.30 range with sideways price action.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.10 per cent to 90.67.
"The US dollar index is trading flat this morning in Asian trade against major peers. Markets will look ahead to the testimony of US Treasury Secretary nominee Janet Yellen later in the day," Reliance Securities said in a research note.
The euro and the sterling were flat to marginally higher against the US dollar this morning in Asian trade.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 349.30 points higher at 48,913.57, and the broader NSE Nifty was up 106.90 points at 14,388.20.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 650.60 crore on a net basis on Monday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 0.47 per cent to USD 55.01 per barrel."
Govt. may raise import duties by 5-10%
India is considering raising import duties by 5%-10% on more than 50 items including smartphones, electronic components and appliances in the upcoming budget, three government sources privy to the discussions told Reuters on Monday.
The move to increase import duties is part of Prime Minister Narendra Modi’s self-reliant India campaign that aims to promote and support domestic manufacturing, said the sources, who asked not to be named as the discussions are not public.
One of the sources said the government was seeking to target additional revenue of about ₹200 billion to ₹210 billion, as it looks to shore up revenue amid the COVID-19 pandemic-driven slowdown that has stung the economy.
Sensex rallies nearly 500 points in early trade; Nifty tops 14,400
Stocks make up yesterday's losses at open.
PTI reports: "Equity benchmark Sensex rallied nearly 500 points in early trade on Tuesday tracking strong gains in index majors Reliance Industries, HDFC and Infosys amid a positive trend in global markets.
The 30-share BSE index was trading 485.97 points or 1 per cent higher at 49,050.24.
Similarly, the broader NSE Nifty surged 134.05 points or 0.94 per cent to 14,415.35.
Bajaj Finance was the top gainer in the Sensex pack, rising around 2 per cent, followed by SBI, ONGC, IndusInd Bank, Reliance Industries, HDFC and Axis Bank.
On the other hand, ITC and HDFC Bank were the laggards.
In the previous session, Sensex ended 470.40 points or 0.96 per cent lower at 48,564.27, while Nifty tumbled 152.40 points or 1.06 per cent to 14,281.30.
Foreign portfolio investors (FPIs) were net buyers in the capital market as they purchased shares worth Rs 650.60 crore on Monday, as per exchange data.
According to Binod Modi Head-Strategy at Reliance Securities, domestic equities look to be good at the moment. A sharp pullback for the last two trading days clearly indicates profit booking by the investors ahead of key events including the Union Budget.
"However, we still believe that any meaningful correction will be bought out as underlying fundamentals of the market remain intact," he said.
Huge fiscal stimulus in the US, persistently soft monetary policies of global bankers, weak dollar and better-than-expected earnings growth by corporate should continue to ensure favourable FPI flow into domestic markets, Modi added.
Elsewhere in Asia, bourses in Hong Kong, Seoul and Tokyo were trading with significant gains, while Shanghai was in the red.
Meanwhile, the global oil benchmark Brent crude was trading 0.44 per cent higher at USD 54.99 per barrel."
Avian flu outbreak to hit Jan. poultry sales: Crisil
The bird flu outbreak in India could impact poultry sales by a third this month, but the industry will likely bounce back in quick time, with profitability intact for the full fiscal. This has been indicated by Crisil’s analysis of 87 poultry companies, which account for 30% of the industry’s revenue.
The flu has led to reduction of about 30% of broiler chicken volumes, bringing down the daily chicken demand in India from 100 lakh kg in December 2020 to an estimated 70 lakh kg in January 2021, Crisil said.
Additionally, wholesale prices of broiler chicken have crashed 20-30% from ₹105-110 per kg in December to ₹80 per kg. Given this, overall revenue could decline 30-40% in January 2021 due to a fall in realisations and volume, Crisil said.
Since wholesale prices usually correct sharply following such outbreaks, the fall in prices would be temporary, it added.
“The impact of the outbreak on the industry will depend on its intensity and duration,” Dinesh Jain, Director, Crisil Ratings, said.
