Today's top business news: Sensex breaches 50k-mark but ends lower on profit-booking, Future Retail hits upper circuit after Sebi clears deal with RIL, a vaccine shot in the arm for markets, and more

People walk past the Bombay Stock Exchange (BSE) building in Mumbai, India. (Photo for representation)   | Photo Credit: AP

The Nifty and the Sensex opened the day on a  positive note, scaling a fresh all-time high as Reliance shares got a boost.

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

4:30 PM

A shot in the arm for markets

4:00 PM

Sensex breaches 50k-mark, ends lower on profit-booking

A volatile day for stocks.

PTI reports: "Equity benchmark Sensex declined 167 points to close at 49,624.76 on Thursday, after hitting the historic 50,000-mark for the first time in intra-day trade.

Weighed by selling in index heavyweights Infosys, HDFC twins and TCS, the 30-share BSE index ended 167.36 points or 0.34 per cent lower at 49,624.76.

Similarly, the broader NSE Nifty slipped 54.35 points or 0.37 per cent to close at 14,590.35.

ONGC was the top loser in the Sensex pack, shedding 4 per cent, followed by Bharti Airtel, SBI, IndusInd Bank, NTPC, Sun Pharma and ITC.

On the other hand, Bajaj Finance, Bajaj Auto, Reliance, Bajaj Finserv and Asian Paints were among the gainers.

The rupee gained 6 paise to settle at a near 5-month high of 72.99 against US dollar.

Elsewhere in Asia, bourses in Shanghai, Seoul and Tokyo ended in the positive zone, while Hong Kong closed in the red.

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

Meanwhile, the global oil benchmark Brent crude was trading 0.89 per cent lower at USD 55.58 per barrel."

3:30 PM

Cabinet approves closure of Scooters India: Sources

Government shuts shop a loss-making PSU.

PTI reports: "The company that manufactured famous scooters like Lambretta and Vijai Super will be shut down after the Cabinet gave its nod to a proposal to close the loss-making state-owned firm, sources said.

The Cabinet Committee on Economic Affairs (CCEA) is believed to have given consent to shutting down of Lucknow-based Scooters India Ltd at its meeting on Wednesday, they said.

The Scooters India brand name shall be sold separately as the company holds famous brands such as Lambretta, Vijai Super, Vikram and Lambro, shared an official.  The company produces several types of three-wheelers under the Vikram brand.

The government's go-ahead to the closure proposal paves the way for the Heavy Industry Ministry to begin the process of winding up of the firm.  As per the proposed plan presented to the Cabinet, Rs 65.12 crore required for closure of Scooters India Limited is being sought as loan with interest from the Government of India, sources said.  The proposal also entails offering voluntary retirement scheme/voluntary separation scheme (VRS/VSS) to the regular employees rendered as surplus, once sufficient funds are available. The Lucknow-headquartered firm has around 100 employees.  The employees not opting for VRS/VSS will be retrenched as per the Industrial Disputes Act, 1947, said the official who did not wish to be identified.  Moreover, 147.49 acres of the company's land shall be returned to the Uttar Pradesh State Industrial Development Authority at mutually agreed upon rates. However, this process is expected to take time.  The process of winding up of the company also involves delisting of its shares from the stock exchange under the Companies Act.  The Centre has made several efforts in the past to find buyers for Scooters India and nurse the ailing firm back to health, but they have not yielded results.

In 2018, the government had invited expression of interest (EoI) to sell its entire stake with transfer of management control in loss-making Scooters India.  Scooters India was incorporated in 1972. It was engaged in designing, developing, manufacturing and marketing a broad spectrum of conventional and non-conventional fuel driven three-wheelers.

In 1975, the company started commercial production of scooters under the Vijai Super brand for the domestic market and Lambretta for the overseas market. Later it also introduced three wheelers under the brand name of VIKRAM/LAMBRO.

In 1975, it started commercial production of scooters under the brand name of Vijay Super for domestic market and Lambretta for overseas market.

However, in 1997, the company strategically discontinued its two-wheeler production and concentrated only on manufacturing and marketing of three-wheelers."

3:00 PM

Amazon sues EU antitrust regulators for letting Italian case go ahead

Amazon is suing EU antitrust regulators for allowing the Italian competition watchdog to pursue its own case against the U.S. online retail giant over the way it selects sellers, arguing that this should be wrapped into an EU investigation.

Amazon took its case to the Luxembourg-based General Court, Europe's second-highest, on Tuesday, asking it to annul the EU's decision to exclude Italy from the wider investigation, a court filing shows.

The move came two months after the European Commission opened an investigation into the criteria the company uses to select winners of its "buy box", which allows customers to add items from a specific retailer directly into their shopping carts.

The probe will also examine whether the company gives preferential treatment to its own retail offers and marketplace sellers that use its logistics and delivery services.

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2:30 PM

BMW to bring 25 new products in India this year

BMW goes big on India.

PTI reports: "German luxury automotive group BMW plans to bring 25 new products in India this year as it looks to accelerate sales growth, leaving behind the worst of the coronavirus pandemic.

The company, which on Thursday launched its BMW 3 Series Gran Limousine priced between Rs 51.5 lakh and Rs 53.9 lakh (ex-showroom Delhi), expects growth in India to be in double digits this year on the back of an increasing demand for personal mobility and people indulging in luxury cars as international travels and holidays are curbed due to COVID-19.

"As far as our business is concerned, the worst of coronavirus is behind us. In 2020 we saw business shut...This year we expect the full 12 months to be operational as compared to around eight months last year. Demand is also picking up," BMW Group India President Vikram Pawah told PTI.

Around November-December last year, the company had been able to achieve its pre-COVID levels, he added.

When asked about the company's growth prospects this year, Pawah said,"We expect it to be really strong, in double digits." Pawah said there are two factors driving demand. One is the increasing preference for personal mobility in the aftermath of the pandemic due to health and safety concerns and the other, in the luxury segment in particular, people are looking to indulge in cars as they are not going for international holidays in exotic locations.

In order to tap the opportunity, Pawah said,"BMW Group India will launch 25 new products." These will include eight all-new products, nice facelifts and eight variants.

The BMW Group sells luxury cars and SUVs under the BMW and Mini brands while it is present in the motorcycle segment through BMW Motorrad in India.

"We are also looking to create completely new segments such as we are doing with the 3 Series Gran Limousine," he added.

The BMW 3 Series Gran Limousine with its elongated design, enhanced space, luxurious comfort and dynamic performance has been tailored with an innovative proposition that will attract young, progressive Indians who want a perfect combination of sporty performance and higher practicality for family usage in this segment, Pawah said.

The new BMW 3 Series Gran Limousine is available in one diesel variant (BMW 320Ld Luxury Line) priced at Rs 52.5 lakh and two petrol variants  -- BMW 330Li Luxury Line tagged at Rs 51.5 lakh and BMW 330Li M Sport 'First Edition' priced Rs 53.9 lakh."

2:00 PM

India within striking distance of attaining positive growth:RBI

Good news from the central bank.

PTI reports: "India's GDP is within the striking distance of attaining positive growth, the Reserve Bank said observing that the letter "V" in the V-shaped recovery stands for vaccine.

The Indian government launched the world's biggest vaccination drive on January 16 to protect people from COVID-19.

"What will 2021 look like? The shape of the recovery will be V-shaped after all and the 'V' stands for vaccine," said an article on the 'state of economy' in the RBI's January Bulletin.

India has launched the biggest vaccination drive in the world, backed by its comparative advantage of having the largest vaccine manufacturing capacity in the world and a rich experience of mass inoculation drives against polio and measles.

"If successful, it will tilt the balance of risks upwards," said the authors who among others include RBI Deputy Governor Michael Debabrata Patra.

The RBI, however, said the views expressed in this article are those of the authors and do not necessarily represent the views of the central bank.

E-commerce and digital technologies will likely be the bright spots in India's recovery in a world in which there will be rebounds for sure, but pre-pandemic levels of output and employment are a long way off, they said.

The article further said: "Recent shifts in the macroeconomic landscape have brightened the outlook, with GDP in striking distance of attaining positive territory and inflation easing closer to the target." India's GDP is estimated to contract by a record 7.7 per cent during 2020-21 as the COVID-19 pandemic severely hit the key manufacturing and services segments, as per government projections released earlier this month.

The economy contracted by a massive 23.9 per cent in the first quarter and 7.5 per cent in the second quarter on account of the COVID-19 pandemic.

The article further said that in the first half of 2021-22, GDP growth will benefit from statistical support and is likely to be mostly consumption-driven.

With rabi sowing surpassing the normal acreage way before the end of the season, bumper agriculture production is expected in 2021.

"India being the global capital for vaccine manufacturing, pharmaceuticals exports are expected to receive a big impetus with the start of vaccination drives globally. Agricultural exports remain resilient and under the recent production linked (PLI) scheme, food processing industry has been accorded priority," it said.

Harnessing the synergies by transforming low-value semi-processed agri products through food processing would not only improve productivity but also boost India's competitiveness, it added.

The article notes that slippage ratios have been falling and loan recoveries are improving even as provisioning coverage ratios have risen above 70 per cent. Capital infusion and innovative ways of dealing with loan delinquencies will occupy policy attention in order to ensure that finance greases the wheels of growth on a durable basis before the demographic dividend slips away.

"It will take years for the economy to mend and heal, but innovative approaches can convert the pandemic into opportunities. Will the Union Budget 2021-22 be the game-changer?," it said.

Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget in Lok Sabha on February 1."

1:00 PM

Google asks U.S. judge to move states’ antitrust lawsuit to California

Alphabet Inc's Google has asked a U.S. judge in Texas to transfer an antitrust lawsuit filed by 10 states in December to a court in California, a state that has more relevant witnesses and documents needed by the company, it said.

In December, Texas and nine other states sued Google LLC in a U.S. court in Sherman, Texas, accusing the search engine company of working with Facebook Inc in a way that violated antitrust law to boost its already-dominant online advertising business.

Google said in a court filing that the first case alleging it monopolised online display advertising was filed in May by an advertiser, and that since then five other cases have been filed.

All were filed in the Northern District of California, "the venue where Google is headquartered and where more relevant witnesses and documents are located than in any other district in the country," Google said in its request to move the case, which was filed late on Tuesday.

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12:30 PM

Future Retail, Future Enterprises hit upper circuit after Sebi clears deal with RIL

Future shares hit the roof amid regulatory approval.

PTI reports: "Shares of Future Retail and Future Enterprises rose nearly 5 per cent and hit upper circuit limits after Sebi cleared Future Group's proposed multi-billion dollar deal with Reliance Industries Ltd.

On the BSE, Future Retail Ltd's shares hit the upper circuit of Rs 81.35, rising 4.97 per cent over the previous close.

Future Enterprises Ltd's stock gained 4.98 per cent to touch the upper circuit limit of Rs 12.01.

Meanwhile, Reliance Industries Ltd (RIL) was trading at Rs 2,114.8 during the late morning trade, rising 2.91 per cent.

On Wednesday, Sebi gave a go-ahead to Future Group's scheme of arrangement and sale of assets to Reliance Industries.

Based of this, the BSE also granted its "no adverse observation" report to the Rs 24,713-crore deal.

Amazon had written several letters to the SEBI and other regulatory agencies to suspend their review of the deal and not grant it a no objection certification on ground that its challenge to the agreement was before the Delhi High Court.

"It is observed that there are certain ongoing litigations/arbitration/legal proceedings against the draft scheme," the Sebi said.

"In view of the same, the company is advised that these comments of SEBI on the draft scheme of arrangement are subject to the outcome of any of the ongoing litigations/arbitration/legal proceeding involving the draft scheme and/or the decision by any competent authority/competent court in this regard," it said."

12:00 PM

Havells India's shares zoom over 12% on strong quarterly earnings

Today's big mover among stocks.

PTI reports: "Shares of Havells India Ltd on Thursday soared over 12 per cent during the late morning trade after the company posted a 74.52 per cent jump in its consolidated net profit at Rs 350.14 crore for the third quarter ended on December 2020.

On the BSE, the scrip was trading at its 52-week high of Rs 1,144.1, up 12.18 per cent.

On the NSE, the stock jumped to its 52-week high of Rs 1,144, gaining 12.14 per cent.

The consumer electrical goods maker had posted a consolidated net profit of Rs 200.62 crore in the October-December quarter a year ago, Havells said in a regulatory filing on Wednesday.

Its revenue from operations was up 39.67 per cent at Rs 3,175.20 crore during the period under review as against Rs 2,273.29 crore in the corresponding period last fiscal, the company said."

11:30 AM

Emerging market NPAs to continue rising: S&P

The COVID-19 pandemic and its aftermath will continue to dominate the credit story for emerging markets (EMs), including India in 2021, S&P Global Ratings said in a report.

It said bank systems in its sample EMs were exposed to major sources of risk including that of likely deterioration in asset quality.

“We expect non-performing loans to continue increasing and cost of risk to stabilise at high levels as central banks start to remove regulatory forbearance measures in some of the markets where such measures were implemented and banks start recognising the full extent of asset quality deterioration.” It said overall the COVID-19-related economic shock would be a profitability event with those EM banking systems still showing positive net results in 2020-2021. But a few banks will report losses due to their higher exposure to the hardest hit sectors.

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11:00 AM

Junk bond yields hit new low


10:40 AM

Rupee gains 7 paise to trade near 5-month high of 72.98 vs USD

The dollar's weak performance continues this morning.

PTI reports: "Advancing its gains for the third straight session, the rupee scaled a near five-month high of 72.98 against the US dollar on Thursday in line with the buoyant equity market and sustained foreign fund inflows.

At the interbank forex market, the rupee was 7 paise higher to trade at a level not seen since September 1, 2020.

On Wednesday, the rupee had settled at 73.05 against the American currency.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, slipped 0.18 per cent to 90.31.

On the domestic equity market front, the BSE Sensex was trading 277.80 points or 0.56 per cent higher at 50,069.92; and the NSE Nifty was up 84.35 points or 0.58 per cent at 14,729.05.

Foreign institutional investors remained net buyers in the capital market as they purchased shares worth Rs 2,289.05 crore on Wednesday, according to exchange data.

Brent crude futures, the global oil benchmark, rose 0.36 per cent to USD 55.89 per barrel."

10:20 AM

‘Weak reform push, financial sector woes may damp growth’

Fitch Ratings on Wednesday said India’s medium-term growth potential is at about 6.5% but weak implementation of reforms, combined with continued financial sector problems, could lower its potential.

It said the revival of the reform agenda is among the Indian government’s policy responses to the COVID-19 pandemic shock.

“If implemented effectively, we believe these reforms may help to support India’s medium-term growth and partially offset downside pressures to investment from renewed asset-quality challenges in the financial sector and damaged corporate balance sheets,” the ratings agency said.

“We expect India’s central government to remain generally reform-minded over the next few years, and potential areas for further reform seem plentiful, in our view. However, the process of reform in India remains complex, and implementation at times has proven difficult,” Fitch said.

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10:00 AM

Sensex scales 50,000; Reliance gains on nod for Future deal

A new milestone for Indian stocks.

Reuters reports: "Indian shares rose to a record high on Thursday, with the benchmark index scaling the 50,000 level for the first time, boosted by heavyweight Reliance Industries after the country's stock exchanges approved its deal with Future Group.

The blue-chip NSE Nifty 50 index rose 0.44% to 14,708 and the benchmark S&P BSE Sensex was up 0.45% at 50,014.55 by 0346 GMT.

Investor sentiment was also boosted with global equity benchmarks hitting record highs on Wednesday on expectations of further U.S. stimulus from newly inaugurated U.S. President Joe Biden's administration.

Reliance shares rose 1.7% after Indian stock exchanges on Wednesday gave the go-ahead for Future Group's $3.4 billion deal to sell its retail assets, taking it a step closer towards closing a deal that has soured ties with its business partner Inc."

9:30 AM

FedEx Express unveils plan to lay off up to 6,300 employees in Europe

FedEx Corp’s express unit on Tuesday announced a plan to lay off between 5,500 and 6,300 employees in Europe, as it nears the completion of the network integration of its TNT Express unit.

Shares of the package delivery firm were up about 1% at $254.76 in morning trade.

FedEx acquired European operator TNT Express, which specialises in shipments between businesses, in 2016 as part of its plan to expand in Europe.

The duplication from two European networks connecting similar geographies will result in job cuts across operational teams and back-office functions, the company said.

Weak shipment sales in Europe over the past few years havel ed to sluggish growth in the TNT unit and weighed on FedEx’s results.

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