CPAI urges govt to address high cost of trading in Indian mkts
The Commodity Participants Association of India (CPAI) has urged the government to address high cost of trading in the Indian markets, which is leading to drastic drop in volume and liquidity.
In a presentation made to the Finance Ministry, CPAI said the cost of executing a transaction in India in various asset classes is 4 to 19 times the cost of executing a comparable transaction in the US, China and Singapore due to high incidence of Securities Transaction Tax (STT) and Commodities Transaction Tax (CTT).
The association wants that the government should remove or cut down the rates of STT and CTT in order to boost trading volumes.
It has requested the government to allow STT as non-refundable tax paid upfront or rebate under section 88 E instead of expense as was the treatment earlier till 2008. Similarly, CTT should be treated as tax paid and not as a expense.
“The high cost of trading has led to steep fall in volumes affected liquidity, increased impact cost and is dampener for hedgers,” said CPAI, the apex pan-India association of participants in commodity exchanges and commodity derivative segments.
Presently, Indian markets have very high transaction costs by the way of CTT, GST, stamp duty, exchange charges, besides levy of applicable capital gain tax. PTI
Sensex sheds 188 pts; China virus fears roil markets
Benchmark Sensex dropped another 188 points on Tuesday in line with weak global sentiment triggered by the rapidly-spreading coronavirus.
After gyrating over 463 points during the day, the 30-share BSE index settled 188.26 points, or 0.46 per cent, down at 40,966.86.
Likewise, the broader NSE Nifty closed 63.20 points, or 0.52 per cent, down at 12,055.80.
In the Sensex pack, Bharti Airtel was the biggest loser, dropping 4.55 per cent, followed by Tata Steel, Reliance Industries, Maruti, ITC, Nestle India and ICICI Bank.
On the other hand, HDFC, Bajaj Finance, Sun Pharma and HDFC Bank advanced up to 1.53 per cent.
Intense volatility remained amid a global selloff led by concerns over the impact China’s coronavirus on world economies, analysts said. PTI
Gold prices fall Rs 162, silver tumbles Rs 657
Gold on Tuesday fell by Rs 162 to Rs 41,294 per 10 gram in the national capital amid rupee appreciation, according to HDFC Securities.
On Monday, the precious metal had closed at Rs 41,456 per 10 gram.
Silver prices also dropped by Rs 657 to Rs 47,870 per kg from the previous close of Rs 48,527 per kg.
“Spot gold for 24 Karat in Delhi fell by Rs 162 pressured by rupee appreciation. The spot rupee was trading around 11 paisa stronger against the dollar during the day,” HDFC Securities Senior Analyst (Commodities) Tapan Patel said. PTI
Worldwide sales of smartphones decline for 1st time since 2008
Worldwide sales of smartphones to end users declined two per cent in 2019, the first time since 2008 that the global market for such phones experienced a decline, Gartner, Inc said.
But they are on track to reach 1.57 billion units in 2020, an increase of three per cent year over year, the research and advisory company said.
“2019 was a challenging year for smartphone vendors, primarily due to oversupply in the high-end sector in mature markets and longer replacement cycles overall,” Research Vice President at Gartner, Annette Zimmermann said.
“However, in 2020, the market is expected to rebound with the introduction of 5G network coverage in more countries and as users who may have delayed their smartphone purchases until 2020 in expectation of price reductions begin buying again,” she was quoted as saying in a Gartner statement. PTI
Hopeful of OSH code passage in Parliament this Budget session: Gangwar
Labour Minister Santosh Gangwar on Tuesday expressed confidence that Occupational, Safety, Health and Working Conditions (OSH) code will get Parliament approval in the Budget session beginning this Friday.
“We are quite hopeful of getting back the OSH Code from standing committee. It is most likely to be considered and passed by Parliament during this Budget Session scheduled to begin on January 31, 2020,” Gangwar said on the sidelines of a conference on safety of mines.
However, the minister said the labour ministry will push all three codes, including OSH, for passage in both the Houses of Parliament.
There are greater chances of Parliament approval for Occupational Safety, Health and Working Conditions Code, 2019 in the Budget session as it was referred to standing committee in October last year.
The Code on Wages has already been approved by Parliament last year. The law would be implemented after framing rules under the code. PTI
India begins dumping probe into chemical imported from China
India has initiated a probe into an alleged dumping of a chemical used in dyes and pharma industries from China following a complaint from a domestic player.
Gujarat Narmada Valley Fertilizers and Chemicals Ltd has filed an application before the Directorate General of Trade Remedies (DGTR) for anti-dumping investigation on imports of Aniline originating in or exported from China.
According to a notification of the DGTR, it has found evidence of dumping of the chemical from China.
“The authority, hereby, initiates an investigation to determine the existence, degree and effect of any alleged dumping in respect of the product under consideration,” it has said.
If established that dumping has caused material injury to domestic players, the directorate would recommend imposition of anti-dumping duty on imports of the chemical from the neighbouring country.
Aniline is also known as Aniline Oil. It is an essential for vital industries such as drugs, pharmaceuticals, dyes and dye intermediates. PTI
Maruti Q3 net up 4.13% at Rs 1,587.4 cr
The country’s largest carmaker Maruti Suzuki India (MSI) on Tuesday reported 4.13% rise in consolidated net profit at Rs 1,587.4 crore for December quarter 2019-20.
The company had posted a net profit of Rs 1,524.5 crore for the year-ago period, MSI said in a regulatory filing.
Revenue for the quarter under review stood at Rs 20,721.8 crore as against Rs 19,680.7 crore in the corresponding period last fiscal, up 5.29%, it added.
The company sold a total of 4,37,361 vehicles during the quarter, up 2% as compared to the year-ago period.
Sales in the domestic market stood at 4,13,698 units, a growth of 2% from the year-ago period. Exports were at 23,663 units, it said. PTI
Tata Motors launches Nexon EV at starting price of Rs 13.99 lakh
Home-grown auto major Tata Motors on Tuesday launched the electric variant of its most-selling compact sports utility vehicle Nexon in the domestic market at a starting price of Rs 13.99 lakh (ex-showroom pan-India).
The company had unveiled the vehicle last December.
Tata Motors plans to launch four more electric vehicle (EV) models, including two SUVs, one hatchback and one sedan in the next 24 months, Tata Sons Group Chairman N Chandrasekaran announced at the launch.
The event was also attended by Ratan Tata, Chairman Emeritus, Tata Sons.
Powered by Ziptron technology, the electric SUV for the personal segment comes with a range of 312 km on a single charge and a high voltage system, fast charging capability, extended battery life and class leading safety features. Besides, it has 35 connected car features as well.
The Nexon EV will be available in three trim levels across 60 authorised dealerships in 22 cities, the company said at the launch.
The company is closely working with other group companies such as Tata Power, Tata Chemicals, Tata Autocomp, Tata Motors Finance and Croma to create an e-mobility ecosystem, Tata uniEVerse, for faster adoption of EVs in the country, Tata Motors said. PTI
HDFC plans to invest Rs 100 crore per year in tech startups: Parekh
Mortgage finance major HDFC is mulling to invest up to Rs 100 crore per year in technology startups, its chairman Deepak Parekh said on Tuesday.
The largest mortgage lender will install a dedicated team understanding the startup ecosystem to do the investments, he said.
The announcement comes at a time when there is a lot of focus on the policy front to encourage startups with an objective of encouraging innovation and creating employment opportunities.
Many corporate entities and also the largest lender SBI have been creating in-house funds to invest in startups.
“At the last board meet, I took an idea of investing Rs 100 crore per year in startups,” Parekh said, speaking at the annual Tiecon event here.
He said just like the idea to branch out into universal banking, the board had reluctance with the idea of investing in startups as well, but underlined that he believes there is a need to invest in ideas of the future in the tech space.
The company will be creating a an in-house team at the headquarters to take charge of investments and exuded confidence that they will start operating in two months. PTI
Nikkei hits 3-week closing low as selling widens amid virus fears
Japanese shares slipped on Tuesday, with the Nikkei hitting a three-week closing low, as the new coronavirus spread in China and beyond, prompting authorities to take more drastic measures to contain its outbreak.
The Nikkei share average shed 0.55% to 23,215.71, the lowest close since Jan. 8. The Topix, which includes all listed shares on the Tokyo Stock Exchange's main board, slipped 0.6% to a two-month closing low of 1,692.28.
Selling widened after being initially concentrated in sectors that are likely to be directly hit by the virus, such as tourism and related industries.
Even companies seen having strong growth prospects such as Keyence and Recruit Holdings were not spared, falling 2.8% and 1.9%, respectively.
All but two of the 33 Topix industry subindexes closed in the red.
“Share prices had been elevated, so a correction was necessary and the coronavirus provided that trigger,” said Tetsuro Ii, president of Commons Asset Management.
“But as was the case with SARS and avian flu, it will take some time before this will be settled. As long as the number of patients is increasing, it will be hard for investors to buy shares aggressively.”
The death toll from the coronavirus has passed 100 in China, and the rich, eastern province of Zhejiang has said companies there were not allowed to resume operations before Feb. 9. Reuters
Tata Group to set up charging stations, battery plant in India EV push
India's Tata Group, a steel-to-autos conglomerate, is making its biggest push yet towards clean energy vehicles with plans to manufacture electric cars and batteries, set up charging stations and build a battery recycling plant, top company executives said on Tuesday.
More than half a dozen companies including Tata Motors , Tata Chemicals, Tata Power and Tata Croma, a chain of stores selling consumer electronics, are pooling in resources and expertise to build an electric vehicle (EV) ecosystem, the executives told reporters in Mumbai.
The plans were announced ahead of the launch of Tata Motors' electric sport-utility vehicle (SUV), Nexon EV. Reuters
CIL gets green nod for 17 mining projects: Coal Minister
State-owned Coal India (CIL) has received green clearances for 17 mining projects, a move that will enable the world’s largest coal miner to achieve one-billion-tonne production target, Coal Minister Pralhad Joshi has said.
In a tweet the minister said: “For making PM @NarendraModi Ji’s vision of 24x7 ‘Power for All’ a reality, @CoalMinistry in co-ordination with @moefcc has got the environment clearances to 17 new and existing coal projects and 3 washeries of @CoalIndiaHQ...”
“These clearances will add 150 million tonnes of coal in @CoalIndiaHQ kitty in next five years and increase its washing capacity by 25 MTPA enabling the company to achieve 1 billion tonnes of coal production by FY23-24,” he tweeted.
The state-owned company will produce 750 million tonnes of coal in the next financial year, the coal ministry had earlier said.
CIL will further produce one billion tonnes of coal by FY2024, it had said.
The PSU is currently given the target of producing 660 million tonnes of coal amounting to 82 per cent of the country’s coal output.
In its annual report 2018-19, the company had said 54 of its coal mining projects were facing delays due to various reasons such as contractual issues and delay in green clearances among others.
“A total of 120 coal projects costing Rs 20 crore and above are in different stages of implementation. Out of which 66 projects are on schedule and 54 projects are delayed,” Coal India had said.
The major reasons for delay in implementation of these projects are delays in obtaining environment clearance, forest clearance, possessions of land and issues related to resettlement and rehabilitation, contractual issues and evacuation facilities among others. PTI
HDFC shares rise over 3% as December quarter profit soars
Shares of HDFC on Tuesday jumped over 3 per cent after the company reported a near four-fold growth in net profit for the three months to December 2019.
The company’s scrip gained 3.13 per cent to Rs 2,470.85 on the BSE.
On the NSE, it climbed 3.16 per cent to Rs 2,471.70.
The mortgage lender on Monday reported a near four-fold growth in net profit at Rs 8,372.5 crore for the three months to December as against Rs 2,113.8 crore in the same period last fiscal year.
The company said the massive gain in bottomline is notional but mandatory from an accounting perspective, as it is based on the valuation gain on its 9.9 per cent stake in Bandhan Bank following the merger of subsidiary Gruh Finance with the Kolkata-based lender effective last October.
For the first time, the loan book crossed Rs 5 lakh crore during the quarter, vice chairman and chief executive Keki Mistry said.
The company booked a 24 per cent growth in individual loans, after adding back loans sold in the preceding 12 months, while excluding that the same clipped at 16 per cent. PTI
New record as Rs 12000 crore transferred directly in accounts of 6 crore farmers: PM
Prime Minister Narendra Modi on Tuesday said a new record was created earlier this month when Rs 12000 crore were transferred directly into the bank accounts of six crore farmers.
Addressing the third Global Potato Conclave here in Gujarat via video conferencing, the prime minister also said that India became one of the top three nations in production of certain food grains and food products due to hard work of farmers and the government policies.
“Several efforts and steps are being taken to double the income of farmers by 2022. It is the result of the combination of efforts taken by farmers and the government policy that India has emerged as one of the top three nations in production of grains and other food items,” Modi said.
“In the beginning of this month, a new record was made by transferring Rs 12000 crore directly into the bank accounts of six crore farmers,” he added. PTI
Finance Ministry invites applications for new Sebi chief
The Finance Ministry has invited applications for the next chairman of Securities and Exchange Board of India (Sebi) to succeed Ajay Tyagi, whose three-year term comes to an end next month.
Tyagi, a 1984 batch IAS officer of Himachal Pradesh cadre, was appointed as head of the market regulator in 2017 for the period of three years. He assumed charge on March 1, 2017.
It was widely expected that Tyagi would get at least two years’ extension given his stellar performance on the job.
However, the public notice dated January 24 inviting application from eligible candidates indicates that the government in not inclined to give an extension of two years to the incumbent.
Applications of eligible candidates in prescribed proforma along with attested copies of annual confidential report for the last five years, vigilance clearance and no penalty and integrity certificate in case of serving government employees should reach on or before February 10, a public notice issued by the Finance Ministry’s Economic Affairs Department said.
In the past, the government has given extension to U K Sinha for three years, making him the second longest-serving chief of Sebi. PTI
Barclays sees $2/barrel impact to oil prices as virus fears threaten demand
Barclays said on Tuesday oil prices will be impacted by $2 per barrel on the potential economic fallout from the coronavirus outbreak in China.
More than 100 people have died and over 4,000 cases of the new virus have been confirmed in China, leading authorities to increase preventive measures, impose travel restrictions and also extend the Lunar New Year holidays to limit the spread of the virus.
The bank sees a $2 per barrel downside to their full-year Brent and WTI forecasts of $62 per barrel and $57 per barrel, respectively.
Compounding the effects of the spillover to economic growth from China and the region, Barclays expects transitory oil demand erosion of about 0.6-0.8 million barrels per day (mb/d) in the first quarter of this year, or 0.2 mb/d for the full year.
“If air passenger traffic in China declined by half in first quarter of 2020, it would likely lead to a 300,000 barrels per day year on year decline in jet-kerosene demand from China,” the bank said adding the fall in road transport would likely be less severe than in the past given reduced reliance on buses.
Barclays expects the Organisation of the Petroleum Exporting Countries and other allies to step in and take further measures to keep the markets tight, in case the fall in demand is more acute.
Oil prices have been down for the last six sessions, but the bank said that the market reaction was likely overdone. Reuters
Boeing says India is critical to its international growth plans
US aerospace giant Boeing has identified India as one of its top markets and critical to its international growth plans, eyeing the country’s plans to buy fighter jets worth billions of dollars.
The statement of Dennis Swanson, vice president, International Sales, Boeing Global Sales and Marketing came ahead of his visit to India’s mega defence exhibition to be held in Lucknow from February 5-9.
In April, the Indian Air Force issued an initial tender to acquire 114 jets at a cost of around USD 18 billion, billed as one of the world’s biggest military procurement in recent years.
The top contenders for the deal include Lockheed’s F-21, Boeing’s F/A-18, Dassault Aviation’s Rafale, the Eurofighter Typhoon, Russian aircraft Mig 35 and Saab’s Gripen.
“India is one of the top markets for Boeing and critical to our international growth plans. As one of the fastest growing economies in the world, India offers growth and productivity opportunities, as well as talent and technology innovation advantages,” Swanson told PTI on Monday.
Boeing has established a growing defence installation base, invested in manufacturing, skill development and engineering in India, and contributed to developing the aerospace and defence ecosystem that is being built on technology advancement and innovation, said Swanson, who is co-leading a high-powered delegation of US India Business Council to ‘DefExpo 2020’ along with David Sutton, director for the Indo-Pacific, Lockheed Martin International.
Over 1,000 companies from nearly 70 countries will take part in the biggest-ever DefExpo to be held in Lucknow from February 5-9, according to a Defence Ministry statement in New Delhi. PTI
India's January palm oil imports from Malaysia could hit 9-year low
India's monthly palm oil imports from Malaysia could fall to the lowest level in nearly nine years in January as traders stopped buying the tropical oil from Kuala Lumpur following informal instructions from New Delhi, traders and refiners told Reuters.
Lower imports by India, the world's biggest palm oil importer, could weigh on Malaysian prices that have corrected nearly a tenth after hitting a three-year peak earlier this month.
In the second week of January New Delhi privately urged palm oil importers to boycott Malaysian products after the country's Prime Minister criticised India's actions in Kashmir and its new citizenship law.
Some traders had been hoping state-run trading firms could buy refined palm oil for the public distribution system by floating tenders, but this does not seem to have materialised.
“No one is buying Malaysia's crude palm oil (CPO) or palmolein for February shipments. There are no open tenders from state agencies yet,” said a Kuala Lumpur-based trader.
India is set to import less than 70,000 tonnes of palm oil from Malaysia in January, the lowest since April 2011 and significantly lower than the 253,889 tonnes it imported in January 2019, traders and refiners said.
In February imports could be negligible at less than 10,000 tonnes as almost every Indian buyer has switched to Indonesia, they said.
“Traders stopped buying from Malaysia after the government gave verbal instructions. This month's shipments are from the contracts signed before the government instructions,” said a Mumbai-based dealer with one global trading firm.
In 2019, India imported 4.4 million tonnes of palm oil from Malaysia, with average monthly imports of 367,459 tonnes, Malaysian Palm Oil Board (MPOB) data showed. Reuters
Sensex rises over 150 points; HDFC top gainer
Market benchmark Sensex jumped over 150 points in opening session on Tuesday driven by gains in index-heavyweight HDFC following strong quarterly results.
Starting on a highly volatile note, the 30-share BSE index swung nearly 200 points in early trade before quoting 97.09 points or 0.24 per cent higher at 41,252.21.
Similarly, the broader NSE was trading 29.20 points, or 0.24 per cent, up at 12,148.20.
HDFC was the top gainer in the Sensex pack, rallying over 2 per cent after the country’s largest pureplay mortgage lender reported a near four-fold growth in net profit at Rs 8,372.5 crore for the three months to December as against Rs 2,113.8 crore in the same period last fiscal year.
Hero MotoCorp, M&M, Maruti, Sun Pharma, SBI, Bajaj Auto and HDFC Bank were also trading with gains.
Top losers included PowerGrid, Nestle India, Bharti Airtel, Tech Mahindra, HCL Tech, NTPC and HUL, rising up to 1.24 per cent.
According to analysts, strong earnings of select bluechips lifted benchmarks. Broader markets continued to outperform signalling that investors are hoping for an economic revival in the upcoming budget.
However, volatility remained amid a global selloff triggered by concerns over the impact of rapidly-spreading coronavirus on world economies, they added. PTI
Oil falls for sixth day as China virus raises global growth, demand concerns
Oil futures fell for a sixth session on Tuesday as the spread of a new virus in China and several countries raised concerns about a hit to economic growth and oil demand.
Brent crude was down 37 cents, or 0.6%, to $58.95 at around 0348 GMT, after touching a three-month low on Monday at $58.50, as the virus outbreak triggered a global sell-off in riskier assets.
U.S. West Texas Intermediate was down 29 cents, or 0.6%, at $52.85, after slipping to its lowest since early October in the previous session at $52.13.
The United States warned against travel to China and other countries put out advisories as the death toll from the spreading coronavirus outbreak rose to more than 100 people and left millions of Chinese stranded during the biggest holiday of the year.
Oil investors are concerned travel advisories, other restrictions and any sizable impact on growth in the world's second-biggest economy and elsewhere will dampen demand for crude and its products, amid plentiful supply.
“The near-term potential of a nationwide travel shutdown is high,” said Ian Bremmer, president of Eurasia Group, a political and market risk consultancy.
Barclays said oil prices could be $2 below its forecasts of Brent to be $62 a barrel over 2020 and $57 a barrel for WTI.
The bank expects the grouping known as OPEC+ to take further steps to support the market when it meets in March if demand lags its forecast of between 600,000 and 800,000 barrels per day (bpd) in the first quarter of 2020. Reuters
