Today's top business news: Shares flat ahead of GDP data, SBI says GDP likely contracted 10.7% in Q2, foreign ownership of US bonds at one of the lowest levels, and more

The Bombay Stock Exchange building is being illuminated during a special Muhurat trading session for Diwali festival in Mumbai. File Photo.  

The benchmark stock indices opened the day on a  flat note after yesterday's strong gains as investors look towards the release of GDP data.

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

4:30 PM

Foreign ownership of US bonds at lowest levels

4:00 PM

Sensex drops 110 points; RIL, IT stocks weigh

A day of choppy trading for stocks.

PTI reports: "Equity benchmark Sensex ended 110 points lower after a choppy session on Friday, dragged by losses in index majors Reliance Industries, Infosys and TCS despite a positive trend in global markets.

The 30-share BSE index closed 110.02 points or 0.25 per cent lower at 44,149.72.

The broader NSE Nifty slipped 18.05 points or 0.14 per cent to 12,968.95.

PowerGrid was the top laggard in the Sensex pack, shedding over 2 per cent, followed by HCL Tech, ONGC, M&M, Axis Bank, TCS, Reliance Industries and Infosys.

On the other hand, Asian Paints, Titan, Tata Steel, Bajaj Finance and Bajaj Auto were among the gainers.

Domestic market swung between gains and losses in a narrow range. While most of Asian markets recovered in green after witnessing tepid opening, Indian broader indices remained choppy throughout the day, said Binod Modi, Head- Strategy at Reliance Securities.

“However, strong buying remained visible in midcap and small cap stocks as investors find midcaps more attractive now due to wider valuations gap compared to large caps,” he added.

As current valuations look to be reasonably stretched and street is factoring a robust earnings growth, sustainability of rebound in key economic indicators will be crucial for the market in the near term, he said.

Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul ended on a positive note.

Stock exchanges in Europe were largely trading with gains in early deals.

Meanwhile, Brent crude futures, the global oil benchmark, was trading 0.67 per cent higher at USD 48.11 per barrel."

3:30 PM

LPG subsidy for BPCL consumers to continue post-privatisation: Pradhan

LPG customers of Bharat Petroleum Corporation Limited (BPCL) will continue to get cooking gas subsidy post-privatisation of the nation’s second-biggest fuel retailers, Oil Minister Dharmendra Pradhan said on Friday.

“Subsidy on LPG is paid to consumers directly and not to any company. So the ownership of the company that sells LPG is not of any material consequence,” Mr. Pradhan told PTI.

The government gives 12 cooking gas (LPG) cylinders of 14.2-kg each to households in a year at a subsidised rate. This subsidy is directly paid into the bank accounts of the users.

The subsidy is paid in advance and consumers use this to buy LPG refills that are available only at market price from dealers of oil marketing companies – Indian Oil Corporation (IOC), BPCL and Hindustan Petroleum Corporation Limited (HPCL).

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3:00 PM

TVS Motor unveils mobile app for customers

More tech innovation in the auto industry.

PTI reports: "TVS Motor Company on Friday said it has launched an app which allows customers to explore and buy any model online from the comfort of their homes.

The TVS Augmented Reality Interactive Vehicle Experience (A.R.I.V.E) app allows an in-depth product exploration and purchase experience using AR technology, the company said in a statement.

The app would also make its foray with a module on the company’s flagship models, TVS Apache RR 310 and TVS Apache RTR 200 4V, catering to its tech-savvy customers, it added.

This will be followed by the inclusion of the entire range of TVS products, TVS Motor company said.

“The company has been at the forefront of introducing technological advancements across our products, and services. The TVS A.R.I.V.E app is an extension to that philosophy, as our customers now get an opportunity to explore our products at the convenience of their homes through the AR technology,” TVS Motor Company Head - (Marketing) Premium Motorcycles Meghashyam Dighole said.

The app will bridge the gap between a customer’s consideration and the decision of testing or purchase, by using augmented reality(AR) to give a 360-degree experience of the product using audio-visual and textual formats, he added."

2:30 PM

OPEC+ to hold informal online talks on Saturday - source

An important meeting on the cards as oil looks to end a lackluster year.

Reuters reports: "OPEC+, a group of leading oil producing countries, will hold informal online talks on Saturday prior to meetings scheduled for next week, a source with the knowledge of the meeting said.

OPEC+ is debating whether to ease oil output cuts from Jan.1, as it previously agreed, or to continue producing at the same rate amid sluggish oil demand and fallout from the pandemic."

1:30 PM

Xiaomi, Boat earbuds top India's wireless hearable shipment list, report says

Xiaomi's Redmi Earbuds was the top-selling wireless hearable in the September ended quarter. Boat's Airdopes 441 secured the second spot on the list.

Xiaomi’s ₹999 promotional price and enhanced features like improved call quality, comfortable fit and multi-function button has made the brand to top the list, according to Counterpoint Research.

The Airdopes 441 model grabbed the second spot in the top 5 list for model shipments, riding on its affordable pricing and features like water resistance, better sound quality, USB Type-C charging and up to 25 hours of battery life, the report stated. The earbuds was the market leader with 18% share.

Realme dropped to the third spot with 12% market share as the brand had no new launch during Q3 2020, and the entry of new players gave customers good alternatives. Nevertheless, two of its models – Buds Q and Buds Air Neo – managed to retain their spots in the top 5 list for best-selling models.

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1:00 PM

China corporate spreads surge on state firm defaults

Further woes in the Chinese financial sector as the county struggles to cope with debt.

Reuters reports: "The premium paid by lower-rated Chinese corporate issuers over their higher-rated equivalents is set for its biggest monthly gain in nearly six years as a string of missed payments by state-owned firms continues to roil the domestic bond market.

The spread between the benchmark AA rated one-year commercial paper yield quoted by China Central Depository & Clearing Co over AAA debt has widened by nearly 100 basis points this month, as investors demanded higher yields for holding riskier paper.

That puts it firmly on track for the second-biggest monthly widening on record and the biggest since December 2014.

Missed debt repayments by several Chinese state-owned enterprises led to a corporate bond sell-off this month and heightened speculation that Beijing is resuming a long-running deleveraging campaign.

In its third-quarter monetary policy implementation report released on Thursday, the People's Bank of China said it would improve bond default risk prevention and disposal mechanisms.

That followed a meeting of the Financial Stability and Development Committee, chaired by Vice Premier Liu He, that vowed “zero tolerance” for market misconduct in the wake of the defaults.

But Thomas Gatley, China corporate analyst at Gavekal, said that widening spreads would not necessarily translate into more effective risk pricing in the market in the medium-term.

A rash of private sector bond defaults in 2017 led to investors shunning riskier names altogether in favour of the safest credits, he said.

“I suspect that that's what we'll see this time too, that probably marginal local issuers will struggle to issue at all.”

“What we don't get is a broad market where all kinds of issuers can issue and they are differentiated by price ... What we get instead is just they're squeezed out and the bigger firms keep issuing, and there isn't much change to the pricing mechanism.”"

12:30 PM

Gold set for weekly fall as investors look past vaccine doubts

The rally in gold is now clearly no more.

Reuters reports: "Gold eased on Friday en route to a third straight weekly drop as investors weighed doubts over a leading COVID-19 vaccine candidate against optimism that vaccines will arrive sooner than expected.

Spot gold fell 0.1% to $1,809.40 per ounce by 0546 GMT, down 3.2% on the week. U.S. gold futures rose 0.1% to $1,807.00. Asian shares stalled near record highs as AstraZeneca faced tricky questions about the success rate of its vaccine that could hinder speedy U.S. and EU regulatory approvals. “For the markets, I don't think that changes the perception that there's going to be a vaccine sooner than previously expected,” said IG Markets analyst Kyle Rodda.

Investors are starting to buy into the narrative that the economic recovery is going to gather steam in 2021 and that's driving them to liquidate gold holdings, Rodda added. Limiting gold's downside was a weaker dollar amid improving risk appetite stemming from good news on COVID-19 vaccines and hopes for a smoother transition to a Biden administration.

Gold is trapped in a range of $1,800-$1,820 an ounce, with risks tilted to the downside by a steepening yield curve and the weight of accumulated positioning in gold exchange-traded funds, futures and physical holdings, said Jeffrey Halley, a senior market analyst at OANDA. But analysts said gold's longer-term trajectory remained positive, with bullion still up about 19% given its lure as a hedge against likely inflation and currency debasement spurred by unprecedented stimulus measures globally.

Gold could reach new highs in 2021 as the U.S. Federal Reserve will likely cap rate rises in the longer end of the yield curve and the dollar will weaken materially, OANDA's Halley added. Lower interest rates reduce the opportunity cost of holding gold. Silver fell 1% to $23.22 an ounce. Platinum slipped 1.3% to $949.50 and palladium was 0.4% higher at $2,391.70."

12:00 PM

James Wolfensohn, former World Bank president, passes away

James Wolfensohn, who served as the president of the World Bank for 10 years and was a guiding force for a couple of the most well-known cultural institutions in the US, has died. He was 86.

Wolfensohn died on Wednesday at his home in Manhattan, according to the Institute for Advanced Study, where he had been a past chair of the board. His son and one of his two daughters also confirmed his death in media reports.

Wolfensohn, born in Australia, worked on Wall Street for many years before taking over as the head of the World Bank, a loan-offering global development organisation, in 1995. He was nominated by then-President Bill Clinton.

In his time there, he took on issues like corruption in the organisation’s development projects, and emphasised paying attention to the needs and priorities of the countries doing the projects.

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11:30 PM

TVS Group firm to buy 100% stake in MFCS, arm

TVS Automobile Solutions Pvt. Ltd., (TVS ASL), a part of the TVS Group, announced the acquisition of the entire equity stake of Mahindra First Choice Services Ltd. (MFCS) and its subsidiary Auto Digitech Pvt. Ltd. (ADPL) through a share-swap deal.

The acquisition will enable MFCS, a part of the $19.4 billion Mahindra Group, to integrate its operations with TVS ASL, a multi-brand independent automobile aftermarket player, the companies said in a filing.

“It is a share swap transaction in which M&M will secure a minority stake in TVS ASL, while the latter will get 100% stake in MFCS,” G. Srinivasa Raghavan, MD, TVS ASL, said.

M&M said the company would invest about ₹35 crore for acquisition of shares in TVS ASL, comparable to the consideration the latter will pay to acquire shares of MFCS and ADPL.

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11:00 AM

AstraZeneca shares hit by vaccine uncertainty

 

10:40 AM

Rupee rises 11 paise to 73.77 against US dollar in early trade

The rupee appreciated 11 paise to 73.77 against the US dollar in the opening session on Friday on sustained foreign fund inflows and weak American currency.

At the interbank forex market, the domestic unit opened at 73.80 against the US dollar, and gained ground to touch 73.77 against the greenback, registering a rise of 11 paise over its previous close.

On Thursday, the rupee appreciated 3 paise to close at 73.88 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.08% to 91.92.

Traders said the major trigger point for the currency markets is the September quarter gross domestic product (GDP) number that is scheduled to be released later in the day.

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10:20 AM

E-tailers clocked $8.3 billion in sales during Oct-Nov festive period: Redseer

India’s online festive sales for a month that is from mid-October-November clocked $8.3 billion, a 65% y-o-y growth, and Flipkart Group played a dominant role with a share of 66% of the total sale, said Redseer Consulting on Friday.

Mrigank Gutgutia, Director at Consulting firm RedSeer, said, “The overall growth story has been very bullish this festive season. We had predicted $7 billion of sales but the actual figures surpassed our expectations, showing how comfortable consumers have become with shopping online even in this pandemic hit year”.

The festive season for this year saw 88% customer growth from last year which was driven by about 40 million shoppers from Tier 2+ cities. Further, mobiles continued to dominate across all products. With a further increasing share of users from Tier 2+ cities, GMV (gross merchandise value) per customer dropped to ₹6,600 from ₹7,450 in the last festive season.

“According to our estimates, Flipkart Group emerged as the leader during the whole festive month with 66% share of the total sale,” he said.

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10:00 AM

Sensex, Nifty start on tepid note amid weak global cues

Equity benchmarks Sensex and Nifty opened on a tepid note on Friday, tracking subdued cues from global markets.

The 30-share BSE index was trading 25.74 points or 0.06% higher at 44,285.48.

Similarly, the broader NSE Nifty slipped 17.60 points or 0.14% to 13,004.60.

NTPC was the top gainer in the Sensex pack, rising around 2%, followed by Bajaj Auto, Maruti, Tech Mahindra, L&T, Asian Paints and Bajaj Finance.

On the other hand, PowerGrid, Reliance Industries and TCS were among the laggards.

In the previous session, Sensex ended 431.64 points or 0.98% higher at 44,259.74, and Nifty surged 128.60 points or 1% to 12,987.

Foreign institutional investors remained net buyers in the capital market as they purchased shares worth ₹ 2,027.31 crore on a net basis on Thursday, according to provisional exchange data.

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9:30 AM

‘GDP contracted 10.7% in Q2’

India’s GDP likely contracted 10.7% in the second quarter, with a further recovery likely in the third quarter, SBI Research said in a report released on Thursday, citing improvements in economic indicators over October and November.

“After witnessing a decline of 23.9% in real GDP in Q1 FY21, we expect Q2 GDP growth at -10.7% (earlier: -12.5%) with positive bias, based on our ‘Nowcasting’ model with 41 high frequency indicators, associated with industry activity, service activity, and global economy,” SBI Group chief economic adviser Soumya Kanti Ghosh wrote in the research report.

“The SBI business activity index also shows that there is continuous improvement and Q3 numbers could be even better. However, the extent of recovery in subsequent quarters can only be gauged after the actual Q2 numbers are published,” Mr. Ghosh added.

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Printable version | Jan 17, 2021 5:55:41 AM | https://www.thehindu.com/business/businesslive-27-november-2020/article33191522.ece

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