The benchmark stock indices have opened the day with decent gains on the back of positive global cues.
Join us as we follow the top business news through the day.
US dollar weakest in more than 2 years
Sensex rallies 354 points as banks soar
It was a strong trending day for stocks today.
PTI reports: "Extending its winning run for the sixth session, BSE benchmark Sensex rallied 354 points on Friday, boosted by gains in bank stocks amid persistent foreign fund inflows.
After touching a high of 39,579.58, the BSE Sensex ended 353.84 points or 0.90 per cent higher at 39,467.31.
The NSE Nifty surged 88.35 points or 0.76 per cent to close at 11,647.60.
IndusInd Bank was the top gainer in the Sensex pack, spurting over 8 per cent, followed by Axis Bank, ICIC Bank, Sun Pharma, SBI and Kotak Bank.
On the other hand, PowerGrid, Infosys, Maruti, NTPC, Asian Paints, HUL, M&M and Tata Steel were among the laggards.
Market mood remained exuberant on hopes of a speedy economic recovery and further fiscal and monetary support, said Sanjeev Zarbade, VP PCG Research, Kotak Securities.
Strong foreign fund inflows, led by high global liquidity and decline in US dollar, also fuelled the markets, he added.
Foreign institutional investors bought equities worth a net Rs 1,164.32 crore on Thursday, exchange data showed.
A sharp appreciation in the rupee too supported investor sentiment. The domestic currency strengthened 43 paise to end at 73.39 against the US dollar.
Meanwhile, bourses in Shanghai, Hong Kong and Seoul ended with gains after US Federal Reserve Chairman Jerome Powell said the central bank will remain accommodative and shift to a more relaxed approach on inflation.
Stock exchanges in Europe were trading on a mixed note in early deals.
Global oil benchmark Brent crude was trading 0.35 per cent lower at USD 45.44 per barrel."
Rural demand to aid economic recovery but can’t substitute for urban demand: Report
Rural India, it seems, will not be able to bail India out of the economic crisis.
PTI reports: "Rural demand can contribute towards recovery in the economy but cannot be a substitute for urban demand, according to a report.
While the industrial and services sectors are still struggling to recover from the adverse impact of COVID-19, the agriculture sector could become an engine for economic recovery, India Ratings and Research said in a report.
It, however, said a large part of the rural demand, notwithstanding the encouraging sales number of motorcycles/tractors in June 2020, comes from consumer non-durables.
“Since the share of agriculture in the country’s gross value added is about 17 per cent, we believe rural demand at best can extend support to consumption demand, but cannot be a substitute for urban demand,” the rating agency said in a report.
It expects the first quarter 2020-21 GDP growth to come in at negative 17.03 per cent. The current account in the June quarter is expected to record a surplus of around USD 18 billion.
The report said one sector that has largely not been impacted either during the lockdown or even thereafter is agriculture. The agency expects the agriculture sector to grow at 3.5 per cent year-on-year in 2020-21.
After several years, the agricultural sector has witnessed three consecutive good harvests — rabi 2019, kharif 2019 and rabi 2020.
Moreover, the adequate pre-monsoon rainfall followed by the timely arrival of monsoons in most parts of the country has led to an increase in the total kharif sowing area in 2020 in comparison to the last year.
As per the latest data available, the actual rainfall during June 1-August 25, 2020, for the country as a whole has been 7.4 per cent above the normal, and the total area sown under kharif crops as on August 14 stood at 101.6 million hectare (mha), a y-o-y increase of 8.5 per cent.
“The rainfall and area sown so far indicate that the country is headed towards a good 2020 kharif harvest, notwithstanding the floods in several areas,” the report said.
However, the flip side of high agricultural production levels could be lower prices of agricultural commodities impacting agricultural income itself.
The government, therefore, needs to have a well-crafted strategy in place, both to continuously monitor the progress of the kharif crop and prevent the distressed sale of kharif harvest, the report said.
Besides agricultural output, it is believed that many factory workers who returned to their rural hometowns in the wake of nationwide lockdown will add to the rural demand, it said."
UN Secretary-General Antonio Guterres slams India for coal subsidies
United Nations Secretary-General Antonio Guterres on Friday criticised India for subsidising fossil fuels and promoting coal auctions . His remarks were part of the Darbari Seth Lecture organised by The Energy Resources Institute, Delhi, which was also attended by External Affairs Minister S. Jaishankar.
“Clean energy and closing the energy access gap are good business. They are the ticket to growth and prosperity. Yet, here in India, subsidies for fossil fuels are still some seven times more than subsidies for clean energy. Continued support for fossil fuels in so many places around the world is deeply troubling,” he said in pre-recorded message.
“Recent research on G20 recovery packages shows that twice as much recovery money has been spent on fossil fuels as clean energy. In some cases, we are seeing countries doubling down on domestic coal and opening up coal auctions,” he added.
Rupee soars 43 paise to close at 73.39 against US dollar
It was a great day for the rupee as foreign investors piled into Indian assets.
PTI reports: "The rupee strengthened 43 paise to end at 73.39 (provisional) against the US dollar on Friday supported by persistent foreign fund inflows and weak American currency.
At the interbank forex market, the domestic unit opened on a flat note but soon gained ground and finally ended at 73.39 against the greenback, higher by 43 paise over its previous close of 73.82.
During the day, the local unit touched an intra-day high of 73.29 and a low of 73.87.
Sustained foreign fund inflows, positive domestic equities and a weak US dollar further boosted the local unit, forex traders said.
“A sharp appreciation of 0.75 per cent has been witnessed in rupee amid persistent portfolio inflows and as the domestic currency was eventually seen mirroring the decline in the dollar index,” said Sugandha Sachdeva VP-Metals, Energy and Currency Research, Religare Broking.
Sachdeva further said that “in the current scenario, the unfettered money printing drive by major central banks has fuelled the ‘risk on’ trade in markets even as the COVID-19 crisis rages on.”
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.72 per cent to 92.33.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,164.32 crore on Thursday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 0.33 per cent to USD 44.94 per barrel."
Anti-vaccine sentiment across countries
Milkbasket plans to launch IPO next year
The boost in business in the online groceries is attracting more players into the sector.
PTI reports: "Daily grocery delivery platform Milkbasket has advanced its plan to launch an initial public offering by the second half of next year, buoyed by strong growth in business in recent months amid the pandemic, a top company executive said.
Speaking to PTI, Milkbasket co-founder and CEO Anant Goel said the rapid adoption of at-home grocery delivery amongst consumers during the pandemic has provided an impetus to target an initial public offering (IPO) in just a year.
“Milkbasket has a near-perfect record of reaching growth targets since being founded in 2015. The rapid adoption of at-home grocery delivery amongst consumers due to the pandemic has provided us with an impetus to target IPO in just a year, which we had initially planned for the year 2023,” he said.
Milkbasket, which already offers delivery of over 9,000 products across fast-moving consumer goods (FMCG), dairy, fruits and vegetables categories in five cities (Delhi, Noida, Gurugram, Ghaziabad and Bengaluru), currently has an average revenue run rate (ARR) of about USD 100 million.
“We are now working on the process for an IPO... The process takes time and we are still in early stages, but we are looking at possibly next year... second half. For now, the thought process is to list in India, we are an Indian company and well recognised in India,” he said.
Goel also denied reports of being in talks for selling out the business to Paytm Mall and Reliance Industries.
“These are reports that I also keep reading. We are not looking at getting acquired. Like any other start-up, we are open to investments, but we aren’t selling off the business.
“We are seeing strong growth and are scaling it up further. We are EBIDTA-positive already, so whether we receive the funding or not, the IPO plan is on,” he said.
Goel said the company has seen significant growth in its business over the last few months.
“We are approximately Rs 700 crore-turnover company and we are growing, we should be Rs 1,000 crore in the next couple of quarters,” he noted.
Milkbasket has raised a total of USD 33 million in equity funding from Inflection Point Ventures, Mayfield India, Beenext, Kalaari Capital, Unilever Ventures, Blume Ventures, Lenovo Capital (LCIG), few family offices, and venture debt funding by Innoven Capital."
Tata Sky set top box acquisitions back to pre-COVID levels
Tata Sky's set-top box acquisitions have picked up and are back to pre-COVID levels, its chief commercial and content officer Pallavi Puri told The Hindu .
“During the initial phase of the lockdown, we saw a lot of our customers renewing their Tata Sky subscription. By end of April, however, we saw the acquisition numbers coming down due to strict lockdown measures and a drop in original content on TV. Shoots were stalled, the content pipeline had dried up.”
She said, “Things are now slowly coming back to normal. Shoots have resumed, broadcasters are back with a bang. IPL will start soon. Things are looking up."
Ms. Puri also said, "COVID-19 has taught us new ways of managing business, optimising costs and coming up with more efficient and reliable processes."
Jan Dhan scheme completes six years, benefits 40.35 crore people
The FM on how the scheme for financial inclusion launched in 2014 has affected welfare delivery in the country.
PTI reports: "More than 40.35 crore people benefited from the Pradhan Mantri Jan Dhan Yojana (PMJDY) which was launched six years ago as a national mission for financial inclusion, Finance Minister Nirmala Sitharaman said on Friday.
The Jan Dhan Yojana, which was announced by Prime Minister Narendra Modi in his Independence Day address in 2014, was launched on August 28, in the same year.
“The PMJDY has been the foundation stone for the Modi government’s people-centric economic initiatives.
“Whether it is direct benefit transfers, COVID-19 financial assistance, PM-KISAN, increased wages under MGNREGA, life and health insurance cover, the first step was to provide every adult with a bank account, which PMJDY has nearly completed,” Sitharaman said on the sixth anniversary of the scheme.
Financial Inclusion is a national priority of the government as it is an enabler for inclusive growth, the finance ministry statement said.
It is important as it provides an avenue to the poor for bringing their savings into the formal financial system, an avenue to remit money to their families in villages besides taking them out of the clutches of the usurious money lenders, it said.
Speaking on the occasion, Minister of State for Finance Anurag Thakur said, under the leadership of Prime Minister Narendra Modi, PMJDY has brought the unbanked into the banking system, expanded the financial architecture of India and brought financial inclusion to over 40 crore account holders and a majority of the beneficiaries are women and most of the accounts are from rural India.
“In today’s COVID-19 times, we have witnessed the remarkable swiftness and seamlessness with which Direct Benefit Transfer (DBTs) have empowered and provided financial security to the vulnerable sections of society.
“An important aspect is that DBTs via PM Jan Dhan accounts have ensured every rupee reaches its intended beneficiary and prevented systemic leakage,” he said.
Total deposit balances under PMJDY Accounts was at Rs 1.31 lakh crore and average deposit per account stood at Rs 3,239.
PMJDY is national mission for financial inclusion to ensure access to financial services, namely, savings and deposit accounts, remittance, credit, insurance, pension in an affordable manner.
In 2018, the government launched PMJDY 2.0 with enhanced features and benefits.
Under the new version, the government decided to shift focus from ‘Every Household’ to ‘Every Unbanked Adult’ and free accidental insurance cover on RuPay cards doubled to Rs 2 lakh for PMJDY accounts opened after August 28, 2018."
Rolls-Royce to sell assets to boost finances
British aero-engine maker Rolls-Royce said it would sell assets to try to raise at least £2 billion pounds ($2.6 billion) as it battles to shore up a balance sheet ravaged by the COVID-19 pandemic and slump in travel.
Rolls-Royce plunged to a record loss before tax of £5.4 billion pounds ($7.14 billion) in the first half of 2020 and, compounding its woes, finance chief Stephen Daintith resigned, although said he would stay for a transition period.
The company said it would continue to look at options to bolster its finances even after asset sales. But asked about a possible rights issue, Mr. Daintith said Rolls-Royce had a good level of liquidity and a plan to cut costs.
“We're not going to be drawn on any particular option for strengthening the balance sheet. We're taking our time, considering carefully,” he told reporters on Thursday.
Walmart rallies on TikTok bid
Indian rupee hits over 5-month high on dollar inflows; RBI eyed
Foreign inflows are helping the rupee appreciate against the US dollar.
Reuters reports: "The Indian rupee strengthened to its highest level in more than five months on Friday morning, helped by dollar inflows into the equity markets while gains in Asian peers also aided sentiment.
The partially convertible rupee rose to a high of 73.5150 per dollar, its strongest since March 5. It had closed at 73.83 on Thursday.
Traders said there was strong support for the dollar/rupee pair around 73.50 levels and a breach of that would mean further gains for the local currency in the coming week.
The central bank's intervention in the market will also be carefully monitored. Traders expect the Reserve Bank of India to step in via state-run banks to purchase dollars to prevent a sharp appreciation in the local unit."
Indians seek out fortune tellers to fight COVID-19 blues
Demand for fortune teller services booms as people battle with economic uncertainty.
Reuters reports: "In his golden-hued office, decked out with peacock feathers and crystal balls, Indian mystic healer and astrologer Sanjay Sharma is busy offering his clients a peek into their future as the COVID-19 pandemic has muddied their present.
“Right now people are really frightened about their future,” said Sharma, with flowing hair and a big vermilion dot on his forehead, as smouldering incense sticks spread their fragrance over an Apple laptop on his desk.
“How will they survive? Will they have their jobs or not? Will their business survive or not,” he added.
Indians are flocking to astrologers, tarot card readers and faith healers as they seek to know what lies ahead and find solutions to current health, financial and mental problems in a country where coronavirus cases have rocketed to 3.3 million - the third-highest in the world - with more than 60,000 deaths.
“Whenever our mind is really disturbed and we feel anxious, we come here,” said Anju Devi, 52, who asked Sharma about her son's dwindling business and the prospects of her daughter's marriage. “Those who are in depression and taking medicines, they feel uplifted after coming here and it helps them come out of those situations.”
Indian astrologers, palm readers, numerologists and tarot card readers are estimated to generate hundreds of millions of dollars a year in revenue. Charges vary from 100 rupees ($1.50) for a quick session with a palmist to several thousand rupees for a long session with a popular spiritual guide.
Ajay Bhambi, a well-known astrologer and spiritual consultant to politicians, Bollywood stars and professional cricketers, said his business had risen 40% since the COVID-19 outbreak.
“You keep the hopes alive and see what is exactly stored for them in future,” said Bhambi, a regular on Indian TV networks. ”If I see a little ray, then I can create a better picture for them.”
He predicted India's COVID-19 crisis would significantly improve from March onward.
To be sure, not every mystic is flooded with customers. For example, Kripajyoti Nisha Singla, a cosmic healer who also practices hypnotherapy, said she has cancelled sessions because of a lack of demand.
“The energies which I got was that people were saving money,” Singla said. “Everyone's very concerned about their finances, very uncertain about how they are going to survive” if the coronavirus crisis extends."
India’s state refiners halt crude oil purchases from Chinese firms
Indian state refiners have stopped buying crude oil from China-linked companies, three sources said, after New Delhi’s recent regulation aimed at restricting imports from countries that it shares a border with.
The new regulation, put in place on July 23, comes after a border clash between India and China that killed 20 Indian soldiers and soured relations between the two neighbours.
Since the new order was issued, state refiners have been inserting a clause in their import tenders on new rules restricting dealings with companies from countries sharing a border with India, the sources said and the tender documents showed.
Sensex rises over 200 points in early trade; Nifty above 11,600 level
Bulls continue to dominate the stock bourses with yet another day of opening gains.
PTI reports: "The BSE benchmark Sensex jumped over 200 points in early trade on Friday led by gains in index-heavyweights ICICI Bank, Axis Bank and Reliance Industries amid persistent foreign fund inflow and positive cues from Asian peers.
The BSE Sensex was trading 261.03 points or 0.67 per cent higher at 39,374.50; while the NSE Nifty was up 71.60 points or 0.62 per cent at 11,630.85.
Axis Bank was the top gainer in the Sensex pack, surging around 4 per cent, followed by IndusInd Bank, ICICI Bank, L&T, Tata Steel, Sun Pharma and ONGC.
On the other hand, HCL Tech, Kotak Bank, Asian Paints, Infosys and HDFC Bank were among the laggards.
In the previous session, Sensex closed at 39,113.47, up 39.55 points or 0.10 per cent, while Nifty inched up 9.65 points or 0.08 per cent to close at 11,559.25.
Exchange data showed that foreign institutional investors bought equities worth Rs 1,164.32 crore on a net basis on Thursday.
According to traders, positive cues from Asian equity benchmarks and sustained foreign fund inflow lifted benchmarks in early trade.
Bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading with gains in mid-day deals.
Stock exchanges on Wall Street ended on a mixed note in overnight session after US Federal Reserve Chief Jerome Powell said the central bank will remain accommodative and shift to a more relaxed approach on inflation.
Global oil benchmark Brent crude was trading 0.09 per cent higher at USD 45.64 per barrel."
Recovery hopes dashed for India's recession-hit economy
A prolonged slowdown may be in store, analysts feel, as the pandemic continues to get worse.
Reuters reports: "India's deepest recession on record will linger through the rest of this year and begin to lift only in early 2021 as a rapid surge in the coronavirus spread squelches a nascent rebound in consumption and business activity, a Reuters poll showed.
New Delhi has already set aside $266 billion of economic rescue spending and the Reserve Bank of India has slashed interest rates by 115 basis points since March, suggesting more is required to shield the economy from the pandemic-induced disruptions to businesses and livelihoods.
The coronavirus is spreading faster in India than anywhere else in the world, with more than 3.3 million people already infected and related deaths at over 60,000. COVID-19 has kept tens of millions of people shut indoors and made many millions jobless in the world's second most populous country.
“Although this might be the low point in the ongoing crisis, the rapid increase in infections this quarter provides no hope of a near-term recovery,” said Prakash Sakpal, senior Asia economist at ING.
“The macro policy has hit a snag amid stretched public finances and rising inflation. This means pretty much nothing can save the economy from continued deep declines for the rest of the year.”
With business activity completely stalled for the most part in the previous quarter owing to a nationwide lockdown to contain the virus' spread, the Indian economy likely shrank 18.3% during that period, according to the August 18-27 poll of over 50 economists.
While that was slightly better than the 20.0% contraction predicted in the previous poll, it would still be the weakest rate by far since official reporting for quarterly data began in the mid-1990s.
The economy is forecast to contract 8.1% in the current quarter and 1.0% in the next - a downgrade from 6.0% and 0.3% contraction, respectively, predicted in a July 29 poll, dashing hopes of a recovery this year.
Asia's third-largest economy is expected to grow again in the first three months of 2021, by 3.0%.
But that will still leave it down 6.0% for the fiscal year that ends in March, which would be the worst 12-month performance on record, blowing out -5.2% for calendar year 1979, during the second Iran oil crisis. That latest forecast was revised down from a median forecast of -5.1% last month.
Under a worst-case scenario, the contraction for each of those periods was expected to be much deeper than predictions from last month as well as the latest base-case consensus."
World Bank pauses publication of Doing Business report
The World Bank on Thursday said it has decided to pause the publication of its Doing Business report following a number of irregularities regarding changes to data in previous reports.
“A number of irregularities have been reported regarding changes to the data in the Doing Business 2018 and Doing Business 2020 reports, published in October 2017 and 2019.”
“The changes in the data were inconsistent with the Doing Business methodology,” the World Bank said in a statement.
The Board of Executive Directors of the World Bank has been briefed on the situation, as have the authorities of the countries that were most affected by the data irregularities, it said, adding “the publication of the Doing Business report will be paused as we conduct our assessment.”
