Today's Top Business News: AGR dues payment; Sebi to tap AI, big data analytics; Oil slump deepens and more

News updates from the world of economy, markets, and finance

5:00 PM

China to halt capacity swaps in steel industry from Jan 24

China will stop approving new capacity and capacity swaps for steel projects from Jan. 24, the country's state planner said on Thursday, as the government wants to review all the projects first.

Crude steel production in China, the world's top steel producer, climbed to a record high just shy of 1 billion tonnes last year despite Beijing's efforts to ease oversupply as some mills used swaps as an excuse to add new capacity.

The country has eliminated more than 150 million tonnes of outdated steel capacity and another 140 million tonnes of low grade steel production over the past four years.

It has also banned adding any new capacity unless a bigger volume of old capacity is shut, a process known as “capacity swaps”. Reuters

4:30 PM

Gold rises Rs 63 on weak rupee, global cues

Gold prices rose Rs 63 to Rs 40,723 per 10 gram in the national capital on Thursday supported by a weaker rupee and higher global demand, according to HDFC Securities.

The yellow metal had closed at Rs 40,660 per 10 gram on Wednesday.

However, silver prices fell Rs 95 to Rs 47,082 per kg from the previous close of Rs 47,177 per kg.

“Spot gold for 24 karat in Delhi was trading higher by Rs 63 with recovery in global gold prices and rupee depreciation,” HDFC Securities Senior Analyst (Commodities) Tapan Patel said.

The rupee was trading around 8 paise weaker against the dollar during the day, he added. PTI

4:00 PM

Sensex rises 271 pts on value buying, L&T up 3 pc

Market benchmark Sensex rose by 271 points on Thursday on the back of gains in index heavyweights Infosys, L&T, ICICI Bank and SBI, despite massive a selloff in global equities.

After gyrating over 300 points in a volatile session, the 30-share BSE index settled 271.02 points, or 0.66%, higher at 41,386.40. It hit an intra-day high of 41,413.96 and a low of 41,098.91.

Likewise, the broader NSE Nifty closed 73.45 points, or 0.61%, down at 12,180.35.

Larsen & Toubro (L&T) was the top gainer in the Sensex pack, rising by 2.98%, after the company reported a 15% rise in its consolidated net profit at Rs 2,560.32 crore for quarter to December 2019. PTI

3:45 PM

France uses Davos to pursue global 'digital tax' goal

French Finance Minister Bruno Le Maire is optimistic of reaching a deal on a global tax on digital companies, despite an initial failure to agree one with the United States.

“We are moving in the right direction,” Le Maire told Reuters TV at the World Economic Forum in the Swiss ski resort of Davos on Thursday, adding that he thought France was close to striking an agreement with the United States.

U.S. President Donald Trump and French President Emmanuel Macron discussed the issue in a phone call on Sunday, with both sides sounding positive afterwards, in contrast to the threats the U.S. has made to impose tariffs on exports of champagne and other luxury goods in retaliation for a French digital tax.

But Paris and Washington failed to agree on Wednesday on how to push forward on a deal that involves a rewriting of decades-old cross-border tax rules. They did, however, agree to set aside their squabbling as they work on the global initiative.

This is being led by the Organisation for Economic Cooperation and Development (OECD), a Paris-based club of wealthier economies.

OECD Secretary-General Angel Gurria has been working for years on finding ways to create a level playing field on digital taxation, but those efforts are now being accelerated to see if an agreement can be reached by December. Reuters

3:30 PM

Airtel, Voda Idea to pay AGR dues after Supreme Court hearing, Jio to pay Rs 177 cr

Bharti Airtel and Vodafone Idea have communicated to the telecom department that they will not pay AGR dues of Rs 88,624 crore, the deadline for which ends on Thursday, and will wait for the outcome of modification petition listed for hearing before the Supreme Court next week, according to official sources.

The apex court has set January 23 as the deadline to pay adjusted gross revenue (AGR) dues.

Both companies have requested the Department of Telecom (DoT) to give them time to make payment based on the outcome of their modification petition listed for hearing before the Supreme Court next week, sources said.

New entrant Reliance Jio, however, is likely to make payment of Rs 177 crore towards AGR liability on it.

“Vodafone Idea and Bharti Airtel have communicated to the DoT that they will not be making payment on January 23 when the last date to clear AGR ends. They have said they will comply with the outcome of modification petition filed before the Supreme Court which is listed for hearing next week,” a source said.

Bharti Airtel, Vodafone Idea and other telecom companies owe the government as much as Rs 1.47 lakh crore in past statutory dues.

Tata Communications, in which the government holds 26.12 per stake, has also made no provision for DoT’s demand of Rs 6,633 crore for AGR dues as the Supreme Court order did not include appeal of the company which is still pending before the apex court. PTI

3:00 PM

Power Min seeks Brazilian investment in energy sector

Power Minister R K Singh on Thursday urged Brazilian investors to invest in the Indian energy sector, saying it is the fastest growing energy market and its consumption will treble in coming days.

Singh also assured investors that India will provide stable policy and regulatory regime to facilitate them.

“Meeting our aspirations require us to go on higher energy consumption pedestal.. with our low base (per capita) energy consumption, our energy consumption is going to double or treble in short while.

“We want more and more companies to come here and invest here. We can promise of stable policy regime. We can promise a regulatory regime which is fair and decides and totally at arms length from the government. All of you are welcome to invest here,” Singh said while addressing a seminar -- India-Brazil Opportunities in Energy and Mining -- here.

India has set a target of adding 175 GW of renewable power in the energy mix by 2022. It has already added 86 GW. Besides, around 36 GW is under installation and about 35 GW is under bidding stage.

The minister exuded confidence that India will have around 50 per cent renewables in its energy mix by 2030. PTI

2:30 PM

Sebi to tap artificial intelligence, big data analytics to curb mkt manipulations: Tyagi

Sebi is acquiring capabilities to monitor and analyse social media posts to keep a tab on possible market manipulations, its Chairman Ajay Tyagi said on Thursday.

He said the capabilities will involve use of artificial intelligence, machine learning , big data analytics and natural language processing tools to spot market manipulation.

The new plan involves creating a “data lake” project to augment analytical capabilities, he said while speaking at the Speaking at the National Institute of Securities Markets at Patalganga near here.

In efforts to curb possible manipulations in the securities market, Sebi has been keeping a watch on social media and there have been cases where social media posts have helped in acting against manipulative activities.

“Catching malpractices in the market using the standard tools that analyse only structured data of price and volume is increasingly getting difficult,” Tyagi said.

“We want to acquire technology and unstructure data analysis because the structured data analysis is not helping much, manipulators use all sort of things,” he noted. PTI

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2:00 PM

Euro zone bond yields inch down as ECB gets set to launch key review

Government bond yields across the euro zone nudged down on Thursday ahead of a meeting of the European Central Bank, which is set to launch a broad policy review that is likely to redefine its inflation goal.

Italian borrowing costs were broadly lower, having risen on Wednesday on renewed political uncertainty as Luigi Di Maio stepped down as leader of Italy's co-governing 5-Star movement.

Anxiety in world markets about the spread of a new flu-like virus in China just as millions prepared to travel for the Lunar New Year holiday supported demand for higher-rated bonds.

In early trade, Germany's benchmark 10-year Bund yield was about a basis point (bps) lower on the day at -0.27% , hovering near a two-week low hit the previous session.

French 10-year bond yields, which pushed back below 0% on Wednesday, traded at -0.01% -- hovering near six-week lows.

Trading activity was generally subdued ahead of the ECB meeting and central bank chief Christine Lagarde's news conference.

“It's all about the review,” said Peter Schaffrik, global macro strategist at RBC Capital Markets.

“Anything that gives clarity about the timing and structure would be helpful.”

Lagarde is expected to announce the start and scope of the ECB's first strategic review since 2003, which will last for most of the year and span topics from the inflation target to digital money and the fight against climate change. Reuters

1:30 PM

China to allocate $217 mln to new solar power projects in 2020

China will allocate 1.5 billion yuan ($217.27 million) to new solar power projects in 2020, its energy administration said in a statement on Thursday.

Of the funds, 500 million yuan will be given to distributed power projects for residential users, and the remaining 1 billion yuan will be split between large-scaled solar stations and distributed power projects for industrial and commercial users.

China has planned to scale back its total renewable power subsidy to 5.67 billion yuan in 2020 from 8.1 billion yuan last year, as Beijing believes clean energy sources are capable of competing subsidy-free with coal-fired power. Reuters

1:00 PM

69% of routine work currently done by managers will be completely automated by 2024: Gartner

By 2024, artificial intelligence (AI) and emerging technologies such as virtual personal assistants and chatbots will replace almost 69 per cent of the manager’s workload, predicts research and advisory firm Gartner, Inc.

Such technologies are rapidly making headway into the workplace, Gartner said.

“The role of manager will see a complete overhaul in the next four years,” said Helen Poitevin, research vice- president at Gartner, in a statement.

“Currently, managers often need to spend time filling in forms, updating information and approving workflows. By using AI to automate these tasks, they can spend less time managing transactions and can invest more time on learning, performance management and goal setting,” she said.

AI and emerging technologies will undeniably change the role of the manager and will allow employees to extend their degree of responsibility and influence, without taking on management tasks, Gartner said.

Application leaders focused on innovation and AI are now accountable for improving worker experience, developing worker skills and building organisational competency in responsible use of AI, it was noted.

“Application leaders will need to support a gradual transition to increased automation of management tasks as this functionality becomes increasingly available across more enterprise applications, said Poitevin. PTI

12:30 PM

ONGC gets 28 bids for 50 oil, gas fields in 1st bid round

State-owned ONGC has received bids for 50 out of the 64 small and marginal oil and gas fields it has offered in a first of its kind bid round for raising production by involving private companies.

As many as 12 companies made 28 bids for 50 fields at the close of bidding on January 17, sources privy to the development said.

ONGC had clubbed the 64 fields into 17 onshore contract areas that have a cumulative 300 million tonne of oil and oil equivalent natural gas reserves.

The sources said 28 bids were received for 14 clusters, covering 50 fields, and no bids were received for 3 clusters covering 14 fields.

Duganta Oil and Gas Pvt Ltd made four bids, while Orissa Stevedores Ltd, Priserve Infrastructure Pvt Ltd and Udayan Oil Solutions Pvt Ltd made three bids each.

ONGC wants partners who can raise output beyond a pre-agreed baseline and will share revenues from such incremental production with them. PTI

12:00 PM

JGBs gain across maturities as China virus makes investors risk-averse

Japanese government bond (JGB) prices rose across maturities on Thursday as fears of the new coronavirus outbreak in China continued to put pressure on risk assets.

Benchmark 10-year JGB futures rose 0.23 point to 152.35, with a trading volume of 18,022 lots, in late afternoon trade.

The yield on the key 10-year cash JGBs dropped 1.5 basis points (bps) at minus 0.020%, its lowest level since Jan. 8.

The 20-year, the 30-year and the 40-year yields fell 2.5 basis points each to 0.270%, 0.415% and 0.445%, respectively.

At the shorter end of the market, the five-year yield declined 1.5 basis points to minus 0.125% and the two-year yield fell one basis point to minus 0.135%.

China is putting on lockdown a city of 11 million people considered the epicentre of the new coronavirus outbreak that has killed 17 and infected nearly 600 people, as health authorities around the world work to prevent a global pandemic. Reuters

11:30 AM

AU Small Finance Bank stock zooms nearly 8%

Shares of AU Small Finance Bank on Thursday jumped nearly 8 per cent after the lender reported doubling of net profit for the quarter ended December 2019.

The stock zoomed 7.82 per cent to Rs 956 on the BSE. On the NSE, it gained as much as 7.68 per cent to Rs 955.15.

The lender on Wednesday reported doubling of its net profit to Rs 190.19 crore for the quarter ended December 2019, helped by higher income.

The company had clocked a net profit of Rs 95.33 crore during the same period a year ago, AU Small Finance Bank said in a BSE filing.

During the said quarter, its total income rose to Rs 1,272.83 crore from Rs 894.29 crore earlier.

Total expenses rose to Rs 959.98 crore from Rs 715.62 crore in October-December period of the preceding fiscal. PTI

11:00 AM

Oil slump deepens as China virus casts cloud over fuel demand, economy

Oil prices fell to their lowest in seven weeks on Thursday, sliding more than 1% on concern that the spread of a respiratory virus from China may lower fuel demand if it stunts economic growth in an echo of the SARS epidemic nearly 20 years ago.

Brent crude futures were down 82, or 1.3%, to $62.39 a barrel by 0400 GMT, and earlier dropped to the lowest since Dec. 4 after falling 2.1% the previous session.

U.S. West Texas Intermediate futures fell 86 cents, or 1.5%, to $55.88 a barrel after earlier falling to the lowest since Dec. 3. The contract declined 2.7% on Wednesday.

amid all the concern about hits to demand, supply remains plentiful.

U.S. crude stockpiles rose last week by 1.6 million barrels, against expectations of a drop, the American Petroleum Institute said late on Tuesday.

Brazil also produced more than a billion barrels of oil in 2019, a first for the South American nation, the national oil regulator said on Wednesday.

Meanwhile China released data on Thursday showing its gasoline exports are surging, rising nearly a third last year as more new refineries are opened. Reuters

10:30 AM

RBI to hold rates on inflation concerns, fiscal boost likely: Poll

Rising inflation is expected to keep the Reserve Bank of India from cutting rates again until late this year, while an expansionary federal budget due next month attempts to put a floor under rapidly-slowing growth, a Reuters poll found.

Last month a rate cut at the Feb. 4-6 meeting was a close call but with the latest inflation print showing a sharp increase - accelerating to its highest in more than five years and above the upper band of the RBI's target range - the central bank will be forced to stay on the sidelines.

That is despite the Indian economy expanding at its weakest pace in over six years in the July-September quarter and the Jan. 17-22 poll of nearly 65 economists showing a sharp cut to the growth outlook for this fiscal year.

“Our expectation is that there might be higher inflation prints at least until April beyond which you could see some moderation,” said Sakshi Gupta, senior India economist at HDFC Bank.

“Given this trajectory, it would reach a stage where inflation prints are going to become more comfortable for the RBI, we expect them to seize that opportunity and cut to support growth.”

Still, in response to additional questions, all 42 economists said growth would gradually pick up in the next six months and a majority said inflation would moderate.

“A sharp pullback in credit caused growth to slow dramatically in 2019. But fiscal and monetary policy have been loosened, this should lead to a gradual recovery in investment and household spending,” said Shilan Shah, senior India economist at Capital Economics.

While the RBI was the most aggressively dovish major central bank in Asia, slashing rates by a cumulative 135 basis points last year, it paused unexpectedly in December on inflation concerns.

The latest poll projected the central bank to extend that pause - keeping its repo rate on hold at 5.15% at its February meeting and until at least October. Reuters

10:00 AM

Sensex rises over 250 pts; L&T, Axis Bank rally 3%

Market benchmark Sensex rose over 250 points on Thursday tracking gains in L&T, Axis Bank and Infosys, despite massive selloff in global equities.

The 30-share BSE index was trading 233.92 points or 0.57 per cent higher at 41,349.30. Similarly, the broader NSE was trading 60.80 points, or 0.50 per cent, up at 12,167.70.

Larsen & Toubro (L&T) and Axis Bank were the top gainers in the Sensex pack, rising up to 2.77 per cent, after the companies posted positive quarterly numbers.

After market hours on Wednesday, L&T reported a 15 per cent rise in its consolidated net profit at Rs 2,560.32 crore for quarter to December 2019.

Likewise, Axis Bank posted a 4.5 per cent year-on-year jump in net profit at Rs 1,757 crore for the third quarter ended December 2019 amid improving asset quality.

Shares of Infosys jumped 1.44 per cent after the government said it was working with the managed service provider for the goods and services tax (GST) regime, to improve the performance of GSTN filing portal on a permanent basis.

On the other hand, HUL, Nestle, Asian Paints and Tech Mahindra was trading in the red.

According to traders, despite selloff in other Asian equities amid fears of contagion after a deadly new virus emerged from China, stock-specific action kept domestic benchmarks buoyed.

Bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading significantly lower.

Brent crude oil futures dropped 1.33 per cent to USD 62.37 per barrel.

Meanwhile, the rupee depreciated marginally to 71.21 against the US dollar in morning session.

In the previous session, Sensex settled 208.43 points, or 0.50 per cent, lower at 41,115.38; while the Nifty closed 62.95 points, or 0.52 per cent, lower at 12,106.90.

Meanwhile, on a net basis, foreign institutional investors sold equities worth Rs 176.43 crore, while domestic institutional investors offloaded shares worth Rs 326.22 crore on Wednesday, data available with stock exchanges showed. PTI

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Printable version | Feb 22, 2020 9:42:29 PM |

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