The benchmark stock indices opened the day on a negative note as rising coronavirus cases affected investor sentiment.
Join us as we follow the top business news through the day.
Sensex ends 87 pts lower; financial stocks drag
A red day for stocks.
PTI reports: "Equity benchmark Sensex declined 87 points on Monday, tracking losses in index majors HDFC Bank, ICICI Bank and Reliance Industries amid a weak trend in global markets.
The 30-share BSE index ended 86.95 points or 0.17 per cent lower at 49,771.29. The broader NSE Nifty dipped 7.60 points or 0.05 per cent to 14,736.40.
IndusInd Bank was the top loser in the Sensex pack, shedding around 4 per cent, followed by PowerGrid, ICICI Bank, HDFC Bank, Axis Bank and Bajaj Finance.
On the other hand, Tech Mahindra, TCS, Sun Pharma, Infosys and HCL Tech were among the gainers.
"Domestic equities traded lower as mounting concerns pertaining to rise in COVID-19 cases in various parts of the country and resultant restrictions continued to weigh on investors sentiments," said Binod Modi, Head - Strategy at Reliance Securities.
Further, weak global cues and higher US bond yields kept markets nervous.
However, strong buying was seen in IT, FMCG and pharma space, while financials and automobiles witnessed selling pressure.
"Notably, investors lapped-up quality midcap and small cap stocks after recent corrections in these spaces," he added.
Elsewhere in Asia, bourses in Hong Kong, Seoul and Tokyo were in the red, while Shanghai ended on a positive note.
Stock exchanges in Europe were also trading on a weak note in mid-session deals.
Meanwhile, the global oil benchmark Brent crude was trading 0.20 per cent lower at USD 64.40 per barrel."
Gold prices slide 1% as Turkey upheaval buoys U.S. dollar
Gold drops as the US dollar soars.
Reuters reports: "Gold prices fell 1% on Monday as investors opted for alternative safe-haven assets such as the U.S. dollar and bonds after Turkey's abrupt decision to replace its central bank head with a critic of high interest rates sparked financial uncertainty.
Spot gold slipped 0.8% to $1,730.45 per ounce by 0853 GMT, having dipped as much as 1% earlier in the session. U.S. gold futures were down 0.7% at $1,729.60 per ounce.
"This morning when the Turkish Lira fell out of bid, we might have seen gold benefiting with the dollar and Japanese yen but that's clearly not the case," said Michael McCarthy, chief market strategist at CMC Markets.
"The stronger dollar seems to be the major driver for gold market at the moment with the currency moves ... It appears that U.S. dollar and yen remain the favourite choices." Turkey President Tayyip Erdogan replaced a hawkish central bank chief with an opponent of tight monetary policy on Saturday, in a shock move that raised concerns about the impact on other financial markets and supported the dollar as a safe-haven currency.
Gold, which is priced in dollar, also lost safe-haven flows to the yen and bonds. The metal may retest a support at $1,716 per ounce, a break below could cause a fall into the range of $1,669 to $1,691, according to Reuters technical analyst Wang Tao. Meanwhile, the U.S. Federal Reserve said on Friday it would not extend a temporary pandemic regulatory break on capital requirements due to expire this month.
"The commercial banks will have less tendency to hold or purchase more of U.S. Treasuries so less demand for Treasuries will likely lead to even higher yields on the longer-term curve...that will likely weigh on gold prices even more," said DailyFX strategist Margaret Yang. Elsewhere, palladium dipped 2.8% to $2,565.74, silver fell 3% to $25.46 and platinum slipped 2.3% to $1,168.77."
Havells expects to continue growth momentum in fans business
A summertime boost to fan sales expected.
PTI reports: "Consumer electric goods maker Havells is expecting good sales of its fan business this summer and is also providing innovative solutions in the segment, said a company official.
The company, which has already attained pre-COVID levels and reported growth in sales of fans in third quarter, expects to continue the growth momentum, said Havells India President- Electrical Consumer Durables, R S Negi. Havells is betting on the premium category fans, which are Rs 3,000 and above and are nearly 8-10 per cent of the market share. The company has geared up new launches in the segment to harness the sales potential of premium fans, which are largely driven by the replacement market.
"We saw strong growth during the third quarter for our fan business. As we get into the summer season, we expect this momentum to continue," said Negi.
Summer is an important season for the fan industry, which accounts for around 45 per cent of the sales, he added.
Expanding its portfolio of the fan segment, Havells on Monday launched India’s first ceiling fan that comes equipped with a 3-stage air purifier which filters PM 2.5 and PM 10 pollutants.
The new launch, 'Stealth Puro Air', is targeted at people seeking a healthy lifestyle and superior comfort. It is priced at Rs 15,000. Havells has also introduced a personal lifestyle fan, which purifies air with its carbon filters. With a battery backup of about 3 hours, it can be charged through a USB cable or a mobile charger, connected via a laptop and has a touchpad for its operations.
“Electric fan is a hyper-competitive and evolving market. This makes it a very important segment for Havells to understand the customer needs and deliver a product that elevates their overall experience. The rising health concerns related to air pollution makes the use of an air purifier an absolute necessity to ensure the wellbeing of our family and loved ones," Negi said.
According to the Indian Fan Manufacturers Association data, fans have one of the highest levels of penetration of 74 per cent of households across India.
Companies such as Orient Electric, Havells India, Crompton Greaves, Bajaj Electricals, Usha International, Polar, Luminous operate into the segment."
Vehicle scrapping policy: Insufficient incentive unlikely to trigger replacement, says Jefferies
A thumbs down to the Centre's vehicle scrapping policy.
PTI reports: "The vehicle scrapping policy, proposed in Parliament last week, is unlikely to make people junk their old vehicles for new ones in a big way, owing to insufficient incentives offered by the government for replacement, a report said on Monday.
Under the proposed policy, a scrapped vehicle will be offered a monetary value close to 4-6 per cent of the showroom value. There could even be up to 5 per cent discount on the purchase of a new vehicle if a scrap certificate is produced.
In addition, it also offers a 25 per cent discount in road tax, among others.
It also proposes to de-register vehicles that fail fitness tests or are unable to renew registrations after 15-20 years of use.
“While the scrapping policy has the right intent, we believe the incentives are insufficient to trigger much replacement,” financial services firm Jefferies said in its report on Monday.
It said a vehicle owner can usually get scrap value of about 2-3 per cent of vehicle price in the market and hence the incremental incentive from the policy appears minimal.
“We also believe the original equipment manufacturers (OEMs) are unlikely to offer additional discounts at a time when demand is already recovering and companies are facing severe margin pressure due to elevated commodity prices,” it added.
The policy proposes to deregister commercial vehicles (CVs) after 15 years and private vehicles after 20 years of use, if these fail the fitness test or are unable to renew registration certificates.
As a disincentive measure, the policy suggests an increase in fees for fitness certificates for CVs and re-registration for private vehicles after 15 years of use.
Mandatory fitness testing for heavy CVs is expected to start from April 2023 and for other categories from June 2024.
The draft notifications are expected in the next few weeks and will be in public domain for stakeholder feedback for 30 days, according to the report.
As per the government, around 1.7 million medium and heavy commercial vehicles and around 5.1 million light motor vehicles are older than 15 and 20 years, respectively.
“This appears significant versus our FY22 new vehicle sales estimate of 259 thousand units for M&HCVs and 3.3mn units for PVs,” the report stated.
However, the firm believes a large proportion of these older than 15-20 year vehicles are not in active on-road use and the owners would not have the financial capacity to replace these will new vehicles for mid-single-digit incentives."
Google payments chief quits after 15 years at company
A high-profile attrition from Google.
Reuters reports: "Senior Google executive Caesar Sengupta, head of the tech giant's payment initiatives, said on Monday he was leaving the company next month, after 15 years.
"I remain very positive about Google's future but it's time for me to see if I can ride without training wheels," Sengupta, vice president and general manager of payments and the 'Next Billion Users' initiative, said in a LinkedIn post https://www.linkedin.com/pulse/thank-you-google-caesar-sengupta.
He was also one of the key people behind the launch and success of Google Pay in India and helped the payment app's relaunch in the U.S. and Singapore. The payment facility is now used by over 150 million users in 30 countries.
"My last day at Google will be April 30th. I haven't decided what I will start next," said Sengupta, who is based in Singapore.
"...Through his time at Google, Caesar has played a key role in starting, building and leading initiatives such as ChromeOS, Next Billion Users and Google Pay. We are excited to see what he builds next and wish him the best in his new journey," a Google Spokesperson said in an emailed statement."
Amazon-Future Retail case: Delhi HC stays order upholding emergency arbitrator award
In a fresh development in the Amazon-Future Retail legal case, the Delhi High Court on Monday stayed its last week’s order upholding an emergency arbitrator award restraining Future Retail Limited (FRL) from going ahead with its assets sale deal with Reliance Retail.
A Division Bench of Chief Justice D.N. Patel and Justice Jasmeet Singh stayed the March 18 order of Justice J.R. Midha ordering attachment of the assets of Future Coupons Private Limited (FCPL), FRL, Kishore Biyani and 10 others promoters.
The Division Bench said Justice Midha’s order will remain stayed till the next date of hearing on April 30. The order came on Future Retail's plea.
Nearly 80% tech employees agree tech giants are too powerful: survey
Silicon Valley’s powerful chief executives don't seem to be talking much on behalf of their employees who increasingly find themselves at odds with their companies’ senior leadership, according to a survey by Politico’s new media company Protocol .
Protocol surveyed over 1,500 tech employees across the U.S, ranging from c-suite executives to associates, and over 40% of the respondents worked at large tech companies having annual revenue of over $500 million with more than 1,000 employees.
Nearly 80% of the tech employees agreed the tech industry is “too powerful”, specifically the Big Tech players including Amazon, Google, Facebook and Apple. About 40% also believed tech does more harm than good, indicating that a fear of negative impact of technology thrives even within the industry.
However, despite these concerns, tech employees don’t see antitrust enforcement as a solution, according to the survey. More than 68% people want their companies to partner with or be acquired by a Big Tech player, and a third of respondents said these tech giants should be allowed to buy other firms.
Barbeque Nation IPO to open on Wednesday; sets price band at Rs 498-500
Another IPO entry.
PTI reports: "Casual dining chain Barbeque Nation Hospitality on Monday fixed a price band of Rs 498-500 per share for its initial share sale, which will open for public subscription on March 24.
The three-day public issue will conclude on March 26, according to the company.
Barbeque Nation Hospitality is backed by private equity investor CX Partners and renowned stock market investor Rakesh Jhunjhunwala's investment firm Alchemy Capital.
The initial public offer comprises a fresh issue of shares worth Rs 180 crore and an offer-for-sale of up to 54,57,470 equity shares.
Equity shares aggregating up to Rs 2 crore has been reserved for eligible employees.
At the upper end of the price band, the IPO is expected to fetch Rs 453 crore.
The company has already raised Rs 150 crore through a pre-IPO placement from Xponentia Capital and Jubilant Foodworks.
Proceeds from the issue will be utilised to fund the company's capital expenditure for expansion and opening of new restaurants besides, prepayment or repayment of certain borrowings and expenses related to general corporate purposes.
The company is promoted by Sayaji Hotels, Sayaji Housekeeping Services, Kayum Dhanani, Raoof Dhanani and Suchitra Dhanani and is backed by CX Partners, which made its first investment in 2013 and again in 2015. The promoters hold 60.24 per cent, CX Partners owns 33.79 per cent and Jhunjhunwala's investment firm Alchemy Capital holds 2.05 per cent of the company.
The total operating revenue of the company in FY20 was Rs 850.8 crore and the CAGR from FY17 to FY20 was at 19.5 per cent.
Barbeque Nation Hospitality, which filed preliminary papers in February last year, received Sebi's approval in July 2020 to float the IPO.
The issue is being managed by IIFL Securities, Axis Capital, Ambit Capital and SBI Capital Markets. Barbeque Nation Hospitality, owns and operates Barbeque Nation Restaurants. It also operates Toscano restaurants and UBQ by Barbeque Nation Restaurant.
As of December 2020, Barbeque Nation Hospitality operates 147 outlets across India and six outlets across three countries -- UAE, Oman and Malaysia.
Earlier in 2017, the company had filed IPO papers with Sebi seeking to raise Rs 700 crore. However, the regulator kept the processing of the company's proposed IPO in abeyance "pending regulatory action for past violations" and finally approved the IPO plan in January 2018.
Although, the company could not launch the initial share-sale due to adverse market conditions."
Rupee rises 6 paise against U.S. dollar in early trade
The rupee appreciated by 6 paise to 72.46 against the U.S. dollar in opening trade on Monday, supported by sustained foreign fund inflows and lower crude prices.
However, muted opening in domestic equities and a strong dollar overseas weighed on the rupee, forex traders said.
At the interbank forex market, the local unit opened strong at 72.47 against the U.S. dollar and gained further ground to quote at 72.46, a rise of 6 paise over its previous close.
In the previous session, the rupee had settled at 72.52 against the American currency.
Foreign portfolio investors (FPIs) have bought close to a net $2.5 billion worth of Indian equities so far this month. FPIs bought a net $179.40 million as of March 18, 2021. For the month of March, FPIs were net buyers of a total of $2.454 billion, Reliance Securities said in a note.
A ‘foreign’ investing t(r)ip!
When a stock rises 17 times in 15 days, what happens? You jump in after the 15th day, of course! That is the story of GME (the stock ticker for American electronics games retailer Gamestop) and that of hordes of Indian investors entering the U.S. market – kickstarting their equity journey with a ‘foreign stock’. And how? After reading about it in Reddit groups!
No doubt investing in a foreign country can help diversify your portfolio. And specifically, when it comes to investing in the U.S., in stocks of companies you find value in everyday life (Google or Apple or Netflix). The question is, which route to investing in the U.S. is prudent and how much can you expose yourself to a market you know little about. So, here are things you need to know before investing internationally.
First, choosing a foreign stock is no different from choosing an equity share locally. The company’s business and financial fundamentals, moat, quality of balance sheet and governance, all matter. If not, foreign stocks too can go down to being penny stocks and destroy your wealth.
Most Asian currencies weaken as Turkish lira's slide weighs on risk sentiment
Emerging market currencies come under pressure.
Reuters reports: "Most emerging Asian currencies edged weaker on Monday, with investors slightly unsettled by a slump in Turkey's lira after President Tayyip Erdogan sacked a hawkish central bank governor, replacing him with a critic of high interest rates.
As markets opened, Turkey's lira plunged 15% to near its all-time low in reaction to President Tayyip Erdogan's removal of Governor Naci Agbal over the weekend.
The Indonesian rupiah weakened 0.2% against the dollar, while the Philippine peso and the Thai baht dropped 0.1% each. "The slide in the lira will probably have only a limited spillover impact into Asia. What is happening in Turkey is very country-specific and doesn't really have any direct bearing on Asia," said Khoon Goh, head of Asia research at ANZ Banking Group.
"The immediate knee jerk reaction has been a bit of a risk-off mood during Asian trading session. But I don't see any longer-term impact. Once the market digests the news, the trading in Asia is likely to reflect the region's overall fundamentals".
Bucking the trend, South Korean won strengthened slightly after preliminary data showed the country's exports during the first 20 days of March jumped 12.5% from a year earlier, when the country was still dealing with its first outbreaks of the coronavirus. Investors also eyed central bank meetings in the region later in the week.
Unlike other emerging economies like Russia and Turkey, which have already embarked on a monetary tightening cycle, Asian central banks have stood pat on rates. Last week, Indonesia and Taiwan kept their key interest rate steady, while central banks in Philippines and Thailand are also expected leave rates unchanged at their meetings during the week."
Indian shares fall weighed by financials, rising COVID-19 cases
A bad start to the week for stocks.
Reuters reports: "Indian shares fell on Monday, pressured by financial stocks, as investors moved money into so-called safe sectors due to fears of fresh curbs as coronavirus cases in the country rise again.
The blue-chip NSE Nifty 50 index fell 0.4% to 14,687 and the benchmark S&P BSE Sensex dropped 0.6% to 49,579.75 as of 0502 GMT.
"There is some nervousness among the market participants given the second wave of COVID-19, new restrictions coming in place," said Saurabh Jain, assistant vice president of research at SMC Global Securities in New Delhi.
"We are seeing some sectoral rotation with money going to information technology and pharma stocks."
Daily coronavirus cases in the country hit their highest since early November on Monday and some regions have reimposed containment measures, including lockdowns and restaurant closures, with more steps being considered.
India's two main stock exchanges last week posted their first weekly decline in three, due to a fresh surge in domestic COVID-19 cases and rising U.S. bond yields.
On Monday, the Nifty bank index fell 0.9% and the finance index dropped 0.7%.
Investors fear that rise in cases and new restrictions will affect the paying back capacity of businesses, hurting banks, Jain said.
On the bright side, the Nifty IT index rose 0.8% and pharma index gained 1.44%.
Shares of Andani Green Energy rose 5% after the company said it had won an order to set up a 300 MW Wind Power project.
Tata Motors shares dropped 1.2% after the company said on Friday that Marc Llistosella Bischoff, who was supposed to join as chief executive officer and managing director, will not join the company.
Meanwhile, Asian markets turned mixed and bonds bounced on Monday, as a plunge in the Turkish lira sparked talk that capital controls might be needed to stem the rout."
Oil giant Saudi Aramco sees 2020 profits drop to $49 billion
Saudi Arabia’s state-backed oil giant Aramco says that its profits sharply fell in 2020 to $49 billion. The big drop came as the the coronavirus pandemic roiled global energy markets.
Saudi Arabian Oil Co. on Sunday released its financial results a year after the pandemic sent the price of oil crashing to all-time lows as people stopped moving around the world to slow the spread of the virus.
