Today's top business news: Stocks surge, Amazon to offer auto insurance in India, debt monetisation not on govt’s agenda, and more

Stock broker react as they watch the stock prices on a computer screen, at BSE building in Mumbai | File   | Photo Credit: PTI

The benchmark stock indices are trading close to flat this morning after opening the day with slight gains.

Yes Bank shares opened down 20% this morning but have since recovered almost half the losses.

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

4:30 PM

Tesla more valuable than U.S., European auto indices

 

4:00 PM

Sensex surges 269 points; Reliance hits lifetime high

Another good day for the stock bourses.

PTI reports: "Equity benchmark Sensex jumped 269 points on Thursday, led by gains in index heavyweight Reliance Industries, ICICI Bank and Kotak Bank amid hopes of fresh government stimulus to support the economy.

The 30-share BSE Sensex ended 268.95 points, or 0.71 per cent, higher at 38,140.47.

Similarly, the NSE Nifty advanced 82.85 points, or 0.74 per cent, to close at 11,215.45.

Shares of Reliance Industries climbed around 3 per cent to hit a record closing high of Rs 2,060.65.

SBI, ICICI Bank, Tech Mahindra, ITC and Kotak Bank were among the other winners.

On the other hand, Axis Bank, HUL, Infosys, TCS and L&T finished in the red.

According to Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares, Indian markets started off on a positive note but with underlying caution as its Asian peers traded mixed as investors remained concerned over US-China tensions.

“During the noon session markets strengthened as domestic sentiments were boosted after news of India working on offering production-linked incentives for up to five sectors to boost domestic manufacturing,” he said.

Some support also came with the Chief Economic Adviser’s statement that the government may announce more fiscal measures to boost demand, Solanki added."

3:30 PM

Debt monetisation not on govt’s agenda at present: DEA Secretary

The Centre seems to be sticking to its decision to avoid direct monetisation of debt.

PTI reports: "Economic Affairs Secretary Tarun Bajaj on Thursday said that monetisation of debt is not on the government’s agenda at the moment, while pointing that there are some positive signs on the revenue collection front.

“At this point of time, I have some calculations. I have some plans in mind... RBI has assisted us in a great deal this time. At this point of time monetisation is not on the table at all. It has not been discussed with the central bank also,” he said.

He said that revenues are going up and the government has also realised some extra revenue from excise on petrol and diesel.

“That is something that is going to help us. Let’s see, I will be in a better position to answer this after 3-4 months when I have data in my hand,” he said at a virtual conference organised by FICCI.

Monetisation of debt simply means the central bank printing currency for the government to take care of any emergency spending and to bridge its fiscal deficit.

Hard pressed for fund, the government has already increased its borrowing target by over 50 per cent from Rs 7.8 lakh crore to Rs 12 lakh crore in May.

In order to boost manufacturing, Bajaj said the government has already announced production linked incentives for mobile and medical equipment and pharma.

The government is working on extending the scheme to another 4-6 sunrise sectors with a lot of export potential.

“This is another area that we are looking at where we are trying to force manufacturing growth in the country,” he said."

3:00 PM

Rupee pares initial gains, settles flat at 74.75 against US dollar

The rupee pared initial gains despite net foreign buying.

PTI reports: "The rupee pared its initial gains and settled on a flat note at 74.75 against the US dollar on Thursday as escalating tensions between the US and China weighed on investor sentiment.

At the interbank forex market, the domestic unit opened on a strong note at 74.65, but erased the gains and finally closed at 74.75, unchanged from its previous closing.

During the session, the domestic unit witnessed an intra-day high of 74.52 and a low of 74.87 against the US dollar.

Forex traders said the uptick in the rupee during the day was supported by weak greenback, foreign fund inflows and positive domestic equities, but rising tensions between the US and China weighed on investor sentiment and restricted the gains.

US President Donald Trump has said that closure of more Chinese embassies was possible .

The US does not rule out the possibility of closing more Chinese diplomatic missions in the country, Trump said, hours after Washington ordered the closure of Beijing’s consulate in Houston to “protect American intellectual property and private information“.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.08 per cent to 94.91.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 271.46 points higher at 38,142.98 and broader NSE Nifty rose 85.15 points to 11,217.75.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,665.57 crore on Wednesday, according to provisional exchange data."

2:00 PM

SpiceJet to fly to United States

Budget carrier SpiceJet on Thursday said it has been designated as the “Indian scheduled carrier,” to operate flights to the U.S.

SpiceJet would be the first Indian budget carrier to operate services to the United States.

Currently, only the national carrier Air India is operating flights on India-US routes.

In a regulatory filing SpiceJet said it has been designated as an Indian scheduled carrier to operate on agreed services between between the two countries.

Read more
 

1:30 PM

Amazon to offer auto insurance in India

The e-commerce giant continues to expand into new sectors.

Reuters reports: "Amazon.com Inc's Indian unit on Thursday said it will begin offering auto insurance, making India the e-commerce giant's first market for the service.

Amazon Pay, the India unit's payments arm, has partnered with private firm Acko General Insurance to offer car and motor-bike insurance, the company said in its blog.

The insurance is currently available on Amazon's app and mobile website.

Customers of Amazon's Prime loyalty programme -- which promises free movies and music streaming as well as faster deliveries for an annual 999 rupees ($13.36) -- will get extra benefits and more discounts, Amazon said.

Amazon's service will compete with local rivals including digital payments firm Paytm and insurance aggregator Policybazar, which is backed by SoftBank.

India is one the fastest growing markets for Amazon, although it has had to face several regulatory hurdles."

1:00 PM

Gold as a fiat money hedge

 

12:40 PM

India to offer production linked incentives to boost manufacturing

The degree of misallocation of resources that such a subsidy leads to remains to be seen.

Reuters reports: "India is working on offering production linked incentives for up to five sectors to boost domestic manufacturing, a top finance ministry official said on Thursday, bolstering efforts to attract new investments in the coronavirus-stricken economy.

Asia's third-largest economy is expected to contract by as much as 10% in the current fiscal year beginning April, some private economists' estimate, after the outbreak crippled business and consumer activity since late March, compared to government's earlier target of about 6% growth.

The government has announced a raft of measures including direct food subsidy to nearly 810 million people and credit guarantees of 3 trillion rupees ($40.17 billion) on loans to small businesses.

Tarun Bajaj, economic affairs secretary at the Ministry of Finance, told a virtual conference that incentives would be offered to sectors to push manufacturing and help struggling industries.

Bajaj didn't specify the sectors that may be eligible for incentives.

The government earlier announced production linked incentives for large scale electronic goods makers for five years, to attract investments in mobile phone manufacturing and electronic component units.

Incentives have also been announced for pharmaceutical companies for production of bulk drugs and on medical devices."

12:00 PM

Rupee rises 11 paise to 74.64 against US dollar in early trade

The rupee appreciated 11 paise to 74.64 against the U.S. dollar in opening trade on Thursday supported by weak American currency and foreign fund inflows.

At the interbank forex market, the domestic unit opened on a strong note at 74.65, gained further ground and touched 74.64 against the U.S. dollar, registering a rise of 11 paise over its previous close.

It had settled at 74.75 against the U.S. dollar on Wednesday.

Forex traders said the uptick in the rupee was supported by weak greenback, but rising tensions between the U.S. and China could limit the gains for the domestic unit.

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11:30 AM

Indian consumers cautious about spending amid COVID-19 crisis: KPMG

Lack of demand continues to be the Indian economy's foremost challenge.

PTI reports: "Consumers in India are cautious about spending in the wake of the coronavirus pandemic with 78 per cent of respondents claiming to reduce discretionary spending, according to a survey by consultancy firm KPMG.

However, consumers in tier-II and tier-III cities were almost two-times more optimistic on their spending habits than those in tier-I, hence it could be the next focus area to monitor spending habits, as per KPMG in India’s report titled ‘Time to open my wallet or not? - The new spending patterns emerging from a consumer’s perspective’

Interestingly, the survey said “overall 51 per cent of respondents feel that the impact of COVID-19 will be short-lived and normalcy is not far“.

Commenting on the findings, KPMG India Partner and Head — Consumer Markets and Internet Business Harsha Razdan said, “our study indicates that 22 per cent consumers in tier-II and 30 per cent consumers in tier-III feel that their spending will either increase or remain the same as prior to COVID-19 and this could be the next focus area for retailers to expand their presence.”

“In the next three months, 49 per cent respondents intend to spend up to Rs 5,000, across categories which makes this the most popular basket value and indicates that consumers are cautious about spending,” he added.

Elaborating on consumer spending habits, the KPMG India survey said,”78 per cent of the respondents claim to reduce on discretionary spending...tier-II and -III cities are 1.9x more positive than the tier-I cities.”

Consumers in tier-III cities were 1.4 times more inclined towards spending on apparel than those in tier-I cities for spending more than Rs 5,000, it said."

11:00 AM

Economic divergence in the Euro zone

 

10:40 AM

Axis Bank’s banking operations head Naveen Tahilyani quits within months

Naveen Tahilyani, group head in-charge of transformation at Axis Bank, has quit within seven months, joining a string of senior executives who have left the private sector lender in the recent past, according to sources.

The sources also said that Mr. Tahilyani, who had joined Axis Bank this year, might be headed back to Tata AIA as the head of country operations.

When contacted, a bank spokesperson confirmed the development, saying Mr. Tahilyani — group executive and head of banking operations and transformation — will be stepping down in November to pursue opportunities outside Axis Bank.

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10:20 AM

State finances stressed, need greater room to incur additional costs due to COVID-19: N K Singh

States continue to seek fiscal relaxations as Covid-19 puts pressure on their finances.

PTI reports: "Finances of the states are stressed on account of the COVID-19 pandemic and some fiscal norms should be relaxed to allow them greater room for incurring additional expenditure, 15th Finance Commission Chairman N K Singh said on Wednesday.

He said there is a need to revisit the entire issue of macroeconomic stability in the current situation as the path of the pandemic is unknown and the consequences on the economy remain extremely problematic.

“Finances of the states are stressed, central government’s own revenues have fallen. There are issues of fiscal pressure. I do believe that this is the time of combination, this is the time when I believe some of the basic tenets of the fiscal norms need to be suitably relaxed.

“This is the time states need greater room to be able to meet the initial obligations on account of this pandemic,” Singh said in an address to the students of IIM Bangalore.

The central government has already increased the borrowing limit of states to 5 per cent of GSDP (Gross State Domestic Product) from 3 per cent that was already available. This would make available an additional Rs 4.28 lakh crore resources.

States so far had a net borrowing ceiling of Rs 6.41 lakh crore based on 3 per cent of GSDP.

However, part of the increased borrowing limit would be linked to specific reforms -- universalisation of ‘one nation one ration card’, ease of doing business, power distribution and urban local body revenues.

Singh said in the longer run, the government should look at removing clutter in the Disaster Management Act and Epidemic Act. It also needs to have a relook at the demarcation of functions of the Centre and states which was done when the Constitution was framed in 1951, he said."

10:00 AM

Sensex rises over 50 points in opening trade; Nifty tests 11,150

An opening with slight gains for the stock market.

PTI reports: "Equity benchmarks Sensex and Nifty opened with marginal gains on Thursday led by buying in index majors Reliance Industries, HDFC and ITC amid positive cues from global markets.

The 30-share BSE Sensex was trading 59.02 points, or 0.16 per cent, higher at 37,930.54.

Similarly, the NSE Nifty advanced 34.70 points, or 0.31 per cent, to 11,167.30.

Asian Paints was the top gainer in the Sensex pack, rising around 2 per cent, followed by L&T, Sun Pharma, ITC, Titan, HDFC, SBI and ONGC.

On the other hand, Axis Bank, Infosys, Tech Mahindra, HDFC Bank, M&M and PowerGrid were among the laggards.

In the previous session, the BSE barometer finished 58.81 points, or 0.16 per cent, lower at 37,871.52, and the Nifty slipped 29.65 points, or 0.27 per cent, to close at 11,132.60.

Foreign institutional investors were net buyers in the capital market on Wednesday, purchasing equities worth Rs 1,665.57 crore, provisional exchange data showed.

According to traders, movement in domestic benchmarks remained muted amid lack of strong directional cues.

Market bias remained positive on firm global trend and sustained foreign fund inflows, they said."

 

9:30 AM

Bajaj Auto Q1 net halves on COVID-19 challenges

Bajaj Auto Ltd.’s first-quarter standalone net profit declined 53% to ₹528 crore for the period ending June 30, 2020, from ₹1,126 crore in the same period last year on account of challenges due to the COVID-19 pandemic.

The company’s total income also declined 58% to ₹3,417 crore compared with the ₹8,197 crore in the same period last year.

“The first quarter of FY21 has been extremely challenging due to the unprecedented COVID-19 pandemic. Lockdown and other containment and precautionary measures have resulted in disrupted supply lines and a sharp decline in overall demand,” Bajaj Auto said in a statement.

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Printable version | Oct 24, 2020 1:31:37 PM | https://www.thehindu.com/business/businesslive-23-july-2020/article32168396.ece

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