The benchmark stock indices opened the day on a positive note, further adding to gains from yesterday.
Join us as we follow the top business news through the day.
China tech giants fall behind US tech
Sensex rallies 529 points; Nifty tops 13,700
Another good day for stocks comes to an end.
PTI reports: "Equity benchmark Sensex jumped 529 points on Thursday following gains in index majors Reliance Industries, HDFC twins and ICICI Bank amid positive global cues.
The 30-share BSE index ended 529.36 points or 1.14 per cent higher at 46,973.54. The broader NSE Nifty surged 148.15 points or 1.09 per cent to 13,749.25.
Axis Bank was the top gainer in the Sensex pack, rising around 3 per cent, followed by Sun Pharma, Reliance Industries, ONGC, HDFC, ICICI Bank, Kotak Bank and Bharti Airtel.
On the other hand, Infosys, IndusInd Bank, HCL Tech, Nestle India and Tech Mahindra were among the laggards.
Domestic equities remained upbeat and witnessed sharp rebound supported by financials, said Binod Modi, Head- Strategy at Reliance Securities.
Emerging possibility of Brexit trade deal led Asian markets higher including India, he said, adding that barring IT, all sectors contributed to the market rally.
"As the outline of Brexit trade deal was reached, higher chances of Brexit trade deal led markets to trade higher. Also, fear of new coronavirus strain seems to be easing out now with select European countries opening borders for Britain," he said.
He further noted that FPI inflow continues to remain as a key driving force the domestic equities, which is expected to sustain in the near term in the backdrop of weak dollar, soft monetary policies of global central bankers and fiscal stimulus in the US.
Foreign portfolio investors (FPIs) were net buyers in the capital market as they purchased shares worth Rs 536.13 crore on Wednesday, according to provisional exchange data.
Elsewhere in Asia, bourses in Seoul, Hong Kong and Tokyo ended on a positive note, while Shanghai was in the red.
Stock exchanges in Europe were trading with gains in early deals.
Meanwhile, the global oil benchmark Brent crude futures slipped 0.48 per cent to USD 51.04 per barrel."
Indian economy recovering fast, growth to turn positive in Q3: RBI article
Positive signals on the economy from the RBI.
PTI reports: "The economy is coming out of the COVID-19 pandemic''s deep abyss faster than most of the predictions, and the growth will enter positive zone in the third quarter of the current financial year, said an article on the ''state of economy'' in the RBI Bulletin.
"...more evidence has been turned in to show that the Indian economy is pulling out of COVID-19''s deep abyss and is breaking out amidst winter''s lengthening shadows towards a place in the sunlight...it is reflating at a pace that beats most prediction," said the article written by the officials of the Reserve Bank of India (RBI).
Impacted by the coronavirus pandemic, the Indian economy dipped by a historic 23.9 per cent in the first quarter of the current financial year. The contraction narrowed down to 7.5 per cent in the second quarter.
Quoting reports, the article said, "Real GDP growth is expected to break out into positive territory in Q3 - albeit, to a slender 0.1 per cent." Two important forces are conspiring to bless this turning of the page on the virus, the article said.
"First, India is bending the COVID infection curve: since mid-September, barring localised surges, infections are slanting fashion to support investment and consumption demand," it said, "The fiscal measures have been sequenced in a designed shift in focus from consumption expenditure in Pradhan Mantri Garib Kalyan Package (PMGKP) to investment expenditure in Aatma Nirbhar 2.0 and 3.0," the article added.
Abstracting from the inherent flux in high frequency indicators, the underlying trend would reveal that the pick-up in momentum of economic activity that commenced with the onset of the second half of 2020-21 is sustained, it noted.
"The absence of the dreaded ''second wave'' of pandemic in India so far has imparted elevation to this momentum in an environment of supportive macroeconomic policies, spurring a faster unlock and normalisation of the economy," it added.
RBI said the views expressed in this article are those of the authors and do not necessarily represent the views of the central bank.
Authors of the article further said that contractions forecast by various agencies for the year as a whole are already being trimmed, and if the current momentum is maintained, the bounce back expected in the last quarter of the year may be stronger than postulated under baseline assumptions.
"At the same time, efforts need to be redoubled to excoriate the ''worm in the apple'' – inflation – before it hurts the impulses of growth that are taking root," they said.
Efficient, effective and timely supply management, including checking runaway retailer margins and reducing the incidence of indirect taxes on consumers, can break the back of the inflation pressures before they incipiently broaden and work against the intent of fiscal and monetary stimuli, the article said."
NIPFP pegs best-case GST revenue gap at ₹1.95 lakh crore
The revenue shortfall for the Goods and Services Tax (GST) compensation payable to States in 2020-21 could be about ₹1.95 lakh crore in the best-case scenario, significantly lower than the ₹2.35 lakh crore estimated by the GST Council, as per a new research paper by the National Institute for Public Finance and Policy (NIPFP).
In a paper titled ‘The Pandemic and GST Revenue: An Assessment for Union and States’, Sacchidananda Mukherjee, an associate professor at NIPFP, estimated that even in the worst-case scenario, the revenue shortfall for GST compensation to States won’t exceed ₹2.45 lakh crore. “Though the spread of COVID-19 is on an apparent decline in India, the economic impact of the pandemic is still evolving, as new waves of COVID-19 infection are striking locally. Any estimate on revenue impact, thus, may not be free from shortcoming and constraints. However, as GDP data of the last two quarters is now available, and as GST shows the brightest sign of recovery among all revenue streams, an attempt is made in this paper to project GST revenue for 2020-21,” it said. Using actual GST revenues between April and October this year and GST collection trends in the past 13 quarters since the indirect tax regime was introduced, different scenarios were extrapolated to estimate likely GST revenue overall, as well as State-wise collections. The maximum GST revenue gaps this year are expected for Goa, Punjab, Chhattisgarh, Kerala and Chhattisgarh, the exercise suggested.
After Sebi mandate on multicap funds, Axis MF moves scheme to new category
Some regulatory pruning.
PTI reports: "Following Sebi''s directions mandating changes in multicap schemes, Axis Mutual Fund on Thursday renamed its multicap scheme and moved it to a new category where it will not be constrained by market cap restrictions.
The new scheme will undergo changes on the fund allocation across asset classes, an official statement said.
Peeved at fund houses allocating a bulk of multicap fund investments in large cap stocks, capital markets regulator Securities and Exchange Board of India (Sebi) had in September asked fund houses to ensure at least 25 per cent of the assets under management are invested in small cap, mid cap and large cap stocks to ensure proper nomenclature.
As per a September media report, Axis Multicap Fund would have had to increase its midcap exposure by 14.3 per cent and small cap exposure by 16.1 per cent to comply with the Sebi requirements.
Axis MF said its scheme, which entails renaming of ‘Axis Multicap Fund'' to ''Axis Flexicap Fund'' from January 31 onwards involves a movement to a new category where it will not be constrained by market cap restrictions.
Axis MF on Thursday said it is renaming ''Axis Multicap Fund'' to ''Axis Flexicap Fund'', which will be an open ended dynamic equity scheme that invests across large cap, mid cap, and small cap stocks to facilitate capital appreciation over medium to long term.
Axis Flexicap Fund will invest minimum 65 per cent to maximum 100 per cent in equity and equity-related investments, maximum 35 per cent in debt and money market investments, and maximum 10 per cent in units issued by real estate investment trusts and infrastructure investment trusts, the statement said.
The scheme will invest in debt instruments having structured obligations/credit enhancement as per limit prescribed by Sebi and amended from time to time, it said, adding not more than 20 per cent of the net assets of the Axis Flexicap Fund can be deployed in stock lending as per the current provisions.
It will be looking for stocks that are expected to report faster growth than the relative benchmark (this includes sustainable earnings growth potential, credible management and acceptable liquidity), considering current times, the statement said.
“We have been successfully managing this fund over the last three years and we believe that this change allows existing and prospective investors to participate in the strategy in the best manner,” the statement said."
Ind-Ra revises FY21 GDP contraction to 7.8% on easing pandemic headwinds
One more positive revision of GDP estimate.
PTI reports: "Citing the better-than-expected recovery in second quarter and the faster than anticipated easing of the pandemic headwinds, India Ratings on Thursday projected 7.8 per cent contraction for the economy for 2020-21 as compared to 11.8 per cent degrowth estimated earlier.
But the agency was quick to question the sustainability of the recovery seen in September quarter when the Indian economy contracted only 7.5 per cent, after 23.9 contraction in April-June , saying ''''a significant part of the impetus came from the festival and pent-up demand.'''' Although the headwinds emanating from the pandemic-related challenges are unlikely to go away till mass vaccination becomes a reality, the economic agents and economic activities not only have learnt to live with it but are also adjusting swiftly to the new reality, it said.
Given this, Ind-Ra now expects third quarter to see contraction at 0.8 per cent and fourth quarter to print in 0.3 per cent growth as against the earlier expectation of positive numbers only in July-September 2021-22.
Accordingly, it expects 7.8 per cent contraction in 2020-21 as against (-) 11.8 per cent earlier, and GDP to grow by 9.6 per cent in 2021-22, mainly due to the weak base of 2020-21, India Ratings chief economist Devendra Pant said in a report.
The better-than-expected Q2 numbers came in from manufacturing/electricity and other utilities with positive growth numbers, while mining and construction saw significant reduction in contraction.
But the same is not true for the contact-intensive services sectors like trade, hotel, realty, and tourism and they are likely to remain subdued for some more time due to social distancing norms and risk aversion, the agency said.
Agriculture has been a bright spot even through the lockdown and continues to be so, riding on the back of good monsoons. The agency expects 3.5 per cent growth for agriculture and contraction of 10.3 per cent and 9.8 per cent for industry and services , respectively, in 2020-21.
According to the agency, while government expenditure is expected to clip in at just 3.3 per cent due to significant expenditure cuts, exports could fall 7.9 per cent due to a combination of the ongoing trade conflicts and the pandemic increasing the uncertainty in the global economy.
Government expenditure declined 22.2 per cent and gross value-added of public administration and defence declined 12.2 per cent in the second quarter.
It expects the retail and wholesale inflation to average 6.8 per cent and (-)0.3 per cent respectively in 2020-21 providing very little headroom to the Reserve Bank to make any changes in the policy rates.
Inflation has been hovering at 5-5.8 per cent since May indicating cost-push pressures.
FY21 fiscal deficit, budgeted at 3.5 per cent, was at 119.7 per cent of the budget estimate in October primarily because of the sharp decline in receipts, which by October were 31.5 per cent of the estimate, whereas expenditure was 54.6 per cent.
The agency expects the fiscal deficit of the Centre to print in at 7 per cent of GDP in FY21 while the current account to be in surplus at 1.1 per cent of GDP and even the capital account is expected to record a surplus of USD67.3 billion."
SpiceJet ties up with GMR Hyderabad Air Cargo for storage, delivery of COVID-19 vaccine
Low cost carrier SpiceJet on Thursdayannounced that it has signed an MoU with GMR Hyderabad Air Cargo (GHAC), a GMR group company,for providing a seamless service to all vaccine manufacturers in the region.
As part of this association, SpiceXpress the cargo arm of SpiceJet envisions to provide efficient, speedy and reliable solutions for vaccine delivery, while also creating a sustainable cold chain network.
SpiceXpress aims to provide the first mile pick up and last mile delivery to carry COVID-19 vaccines across the domestic and international markets in a temperature controlled environment, a press release from the airlines said.
Under the MoU, GHAC shall provide available required space on priority for SpiceJet’s vaccine shipments besides training its personnel along with the airline for specific customer requirements.
SpiceJet on its part will keep a dedicated fleet of freighters including wide-body aircraft at Hyderabad airport to handle all domestic and international consignments.
Volkswagen to hike Polo, Vento prices in India by up to 2.5% next month
Yet another car manufacturer opts to hike prices.
PTI reports: "German carmaker Volkswagen on Thursday said it will hike prices of its hatchback Polo and mid-sized sedan Vento in India by up to 2.5 per cent from next month.
The company joins other automobile manufacturers such as Maruti Suzuki India, Nissan, Renault India, Honda Cars, Mahindra & Mahindra, Ford India, Isuzu, BMW India, Audi India and Hero MotoCorp, which have already announced that they would hike prices from January due to increased input costs.
"Effective January 2021, Volkswagen India announces a price revision of up to 2.5 per cent across the Polo and Vento models in lieu to the rising input costs," a spokesperosn of Volkswagen Passenger Cars India said in a statement.
The company sells Polo and Vento with price starting from Rs 5.88 lakh and Rs 8.94 lakh, respectively."
Mrs Bectors Food Specialities off to flying start; shares list with 74% premium
More signs of an IPO mania.
PTI reports: "Shares of Mrs Bectors Food Specialities on Thursday made a remarkable market debut, listing with a premium of 74 per cent, against its issue price of Rs 288.
The stock opened at Rs 501, reflecting a jump of 73.95 per cent from the issue price on the BSE. As the trade progressed, it rose to Rs 601.20, up 108.75 per cent.
At the NSE, it made a debut at Rs 500, registering a premium of 73.61 per cent.
The company''s market valuation was at Rs 3,338.27 crore on the BSE.
Mirroring massive investor response, Mrs Bectors Food Specialities initial public offer was subscribed a whopping 198 times earlier this month.
The price band for the share sale was at Rs 286-288 apiece.
Mrs Bectors Food manufactures and markets a range of products such as biscuits, breads and buns. It markets a wide variety of biscuits and breads under the flagship brand ''Mrs Bector''s Cremica'' and the ''English Oven'', respectively."
India challenges Vodafone arbitration ruling in Singapore: sources
India has challenged in Singapore an international arbitration court's verdict against it over a $2 billion tax claim involving Vodafone Group Plc, a senior government official told Reuters on Thursday, December 24, 2020, on condition of anonymity.
Vodafone in September had won the case against India , endingone of the most high-profile disputes in the country that hadcaused concern among investors over retrospective tax claims oncompanies.
An international arbitration tribunal in The Hague had ruled that India's imposition of a tax liability on Vodafone was in abreach of an investment treaty agreement between India and theNetherlands. India had 90 days to appeal the ruling.
The Union Finance Ministry did not immediately reply to an email and message seeking comment on the story.
India lost another international arbitration case this week against Cairn Energy , over a tax dispute. It has beenordered to pay the UK-listed company over $1.2 billion indamages and costs.
US corporate yields at all-time low
Rupee surges 14 paise to 73.62 against US dollar in early trade
A quick rally in the rupee this morning.
PTI reports: "The rupee appreciated 14 paise to 73.62 against the US dollar in opening trade on Thursday as sustained foreign fund inflows and hectic buying in domestic equities strengthened investor sentiment.
Traders said the weakness of the American currency in the overseas market also supported the domestic unit.
At the interbank forex market, the domestic unit opened at 73.66 against the US dollar, then inched higher to 73.62 against the greenback, registering a rise of 14 paise over its previous close.
On Wednesday, rupee had settled at 73.76 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback''s strength against a basket of six currencies, fell 0.20 per cent to 90.22.
The US dollar is trading on a weak note as risk appetite rose on the expectation of an imminent Brexit trade deal between the UK and the European Union, Reliance Securities said in a research note.
Further, "Asian currencies were trading flat to stronger against the greenback this morning and could lend support to the domestic unit," the note added.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 340.64 points higher at 46,784.82 and the broader NSE Nifty advanced 107.55 points to 13,708.65.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 536.13 crore on a net basis on Wednesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 0.68 per cent to USD 51.55 per barrel."
Bharti pips Jio again in mobile user addition, Oct. figures show
India’s telecom subscriber base grew to more than 1.17 billion in October with Bharti Airtel maintaining its leadership in mobile subscriber addition, according to the monthly report released by sector regulator TRAI on Wednesday.
This is the second consecutive month in which Airtel added the highest number of subscribers. In September, it had regained the leadership position in subscriber addition after a gap of four years. The company added 3.67 million new customers in October, taking its total wireless customer base to 330.28 million, the Telecom Regulatory Authority of India’s (TRAI) report said.
Airtel was followed by Reliance Jio, which added 2.22 million new mobile customers, taking its total subscriber base to 406.35 million during the reported month.
Shares rise on Reliance, financials boost
A good start to the day for stocks.
Reuters reports: "Indian shares advanced on Thursday on the back of gains in Reliance Industries and financial stocks, as news that a Brexit trade deal was close boosted investor sentiment ahead of the Christmas holiday.
The NSE Nifty 50 index rose 0.64% to 13,688.60 by 0352 GMT and was set for its third straight day of gains, while the benchmark S&P BSE Sensex was up 0.63% at 46,742.16.
Britain and the European Union were on the cusp of striking a narrow trade deal on Thursday, media reports said, boosting Asian equities.
In Mumbai, shares of India's most valuable company, Reliance Industries, gained nearly 1%.
The Nifty's banking, PSU Bank, and financial indexes rose between 0.8% and 1.5%.
Shares of Bharti Airtel Ltd rose as much as 2.5% and were among the top three percentage gainers on the Nifty 50 index.
The telecom operator added 3.67 million new customers in October, the highest among other telecom operators in the country, data showed on Wednesday.
Bucking the trend, the Nifty IT index inched 0.3% lower after hitting record peaks in the previous two sessions.
Biscuit maker Mrs Bectors Food Specialities is slated to make its market debut later on Thursday."
China steps up pressure on Alibaba with anti-monopoly probe
Chinese regulators on Thursday announced an anti-monopoly investigation of e-commerce giant Alibaba Group, stepping up official efforts to tighten control over China''s fast-growing tech industries.
The market regulator said it was looking into Alibaba''s policy of “choose one of two,” which requires its business partners to avoid dealing with competitors. The one-sentence statement gave no details of possible penalties or a timeline to announce a result.
Chinese leaders said earlier an economic priority in the coming year will be to step up anti-monopoly enforcement.
