The Nifty and the Sensex opened the day on a negative note, on road to extending their losing streak to give days.
Join us as we follow the top business news through the day.
Indians grappled with ‘information overload’ during pandemic: survey
Almost half of 6,000 Indian consumers who were surveyed recently said they encountered an information overload during the pandemic. About 52% of those surveyed also said the number of sources they checked for information each day had risen substantially.
The survey, conducted by Nasdaq-listed Information Management Solutions firm, OpenText, to understand the impact of information overload on people during the pandemic, showed that 44% felt this information overload had added to their daily stress.
Also, two in five respondents felt a more streamlined information database would be helpful to deal with the varied information sources such as emails, diaries, news feeds, company websites, calendars, etc. while making a work or home-life related decision. Some 43% felt the need to remember multiple passwords to access each app had added to their anxieties.
Market tumbles for 5th straight session; Sensex tanks 536 points
Another bad day for stocks.
PTI reports: "Extending its losing streak to the fifth straight session, equity benchmark Sensex plunged 536 points on Thursday, tracking losses in HDFC Bank, Infosys and HUL amid a weak trend in global markets.
The 30-share BSE index ended 535.57 points or 1.13 per cent lower at 46,874.36.
Similarly, the broader NSE Nifty fell 149.95 points or 1.07 per cent to 13,817.55.
HUL was the top loser in the Sensex pack, shedding around 4 per cent, followed by Maruti, HDFC Bank, PowerGrid, IndusInd Bank, HCL Tech and Bajaj Finserv.
On the other hand, Axis Bank, SBI, ONGC and ICICI Bank were among the gainers. "A continued pullback in domestic markets is mainly led by profit-booking ahead of union budget," said Binod Modi, Head-Strategy at Reliance Securities.
According to traders, recent foreign fund outflows from the domestic capital markets also had an impact on investor sentiment.
Foreign portfolio investors (FPIs) remained net sellers in the capital market as they offloaded shares worth Rs 1,688.22 crore on Wednesday, according to provisional exchange data.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo ended in the red. Stock exchanges in Europe were also trading with significant losses in early deals.
Meanwhile, the global oil benchmark Brent crude futures slipped 0.27 per cent to USD 55.39 per barrel."
Budget estimate for 2021-22 will be a conjurer’s illusion: Chidambaram
Senior Congress leaders P. Chidambaram, Jairam Ramesh and Mallikarjun Kharge on January 28 addressed the media on the economic situation and the party's expectations from the budget.
"We know that this government is exceptionally obstinate, impervious to good advice and uncaring about the calamitous consequences of its economic policies," former Finance Minister Chidambaram said.
“Even without the pandemic, the economy would have continued on the downward path that had begun in the first quarter of 2018-19 and continued for eight successive quarters. The pandemic pushed the economy into an abyss — -23.9% in Q1 of 2020-21 and -7.5% in Q2,” he noted.
“The current Finance Minister has the distinction of presiding over the first recession in four decades. The year 2020-21 will end with negative growth. None of the numbers estimated at the beginning of the year will be achieved,” Mr. Chidambaram said.
Jio ranked 5th strongest brand globally
Yet another milestone for the Reliance Group.
PTI reports: "Billionaire Mukesh Ambani's four-year-old telecom venture Reliance Jio has been ranked the fifth strongest brand globally behind the likes of Ferrari and Coca-Cola.
The Brand Finance's Global 500 ranking of the strongest brands globally, which determined the relative strength of brands, is topped by WeChat, according to its annual report on most valuable and strongest global brands.
"Despite only being founded in 2016, Jio has quickly become the largest mobile network operator in India and the third-largest mobile network operator in the world, with almost 400 million subscribers," it said.
Jio was Mukesh Ambani's re-entry into the telecom business, offering free voice calling and dirt cheap data for mobile phones.
"Renowned for its incredibly affordable plans, Jio took India by storm through offering 4G to millions of users for free, simultaneously transforming how Indians consume the internet – known as the 'Jio effect'," said Brand Finance, the world's leading brand valuation consultancy.
It said brand strengths were determined through metrics of marketing investment, stakeholder equity and business performance.
The assessment of stakeholder equity incorporates original market research data from over 50,000 respondents in nearly 30 countries and across more than 20 sectors.
According to these criteria, Chinese mobile app WeChat usurped Ferrari to become the world's strongest band. Russian bank Sber is placed third and Coca-Cola fourth.
"The dominance of the (Jio) brand across the nation is evident from the results from Brand Finance's original market research.
"Jio scores highest in all metrics – consideration conversion, reputation, recommendation, word of mouth, innovation, customer service and value for money - compared to its telecom competitors in India," it said.
The brand, it said, has no major weaknesses within the sector, and unlike other telecom brands globally, Jio has shown that it has broken the mould, and enjoys genuine affection from consumers.
"Entering the ranking for the first time this year and claiming the title of the world's 5th strongest brand, is Indian telecom giant, Jio, with a BSI score of 91.7 out of 100 and the elite AAA+ brand strength rating," it said.
As well as being a standout brand for brand strength, Jio is the fastest-growing brand in the ranking in the telecom sector in terms of brand value, bucking the negative trend across the industry, with a 50 per cent increase to USD 4.8 billion.
The world's most valuable telecom brand, Verizon (up 8 per cent to USD 68.9 billion), has also recorded a healthy brand value growth, re-entering the top 10 for brand value following its absence in 2020.
According to the 2021 ranking, Apple is the most valuable brand followed by Amazon and Google."
Global gold demand hits 11-year low of 3,759 tonnes on COVID-19 blow: WGC
Data that captures the impact of the global lockdown on the gold market.
PTI reports: "Global gold demand hit an 11-year low in 2020 at 3,759.6 tonnes, mainly due to a weak October-December quarter and the COVID-19 related disruptions across the world driving a muted consumer sentiment throughout the year, the World Gold Council (WGC) said in a report.
The overall consumer demand during 2019 was at 4,386.4 tonnes, while in 2009 the overall demand was at 3,385.8 tonnes, according the WGC's 2020 Gold Demand Trends report.
Global gold demand dropped by 28 per cent year-on-year (YoY) to 783.4 tonnes in the fourth quarter compared to 1,082.9 tonnes during the October-December period of 2019, the report stated.
The report further revealed that the global gold jewellery demand fell by 34 per cent to 1,411.6 tonnes in 2020, from 2,122.7 tonnes in 2019.
Gold jewellery demand in the fourth quarter of 2020 dipped by 13 per cent to 515.9 tonnes compared to 590.1 tonnes, resulting in a full-year total of 1,411.6 tonnes, which was 34 per cent lower than in 2019 at 2,122.7 tonnes.
While jewellery demand improved steadily from the severely depleted second quarter, the coronavirus pandemic continued to impact consumer behaviour, it noted.
“The impact of the COVID-19 pandemic was felt across the gold market throughout 2020, and fourth quarter was no different. Consumers around the world remained at the mercy of lockdowns, economic weakness and high gold prices, resulting in a new annual low in jewellery demand," WGC Senior Markets Analyst, Research, Louise Street stated.
On the other hand, increased uncertainty and policy response to the pandemic supported annual investment demand in 2020, which increased 40 per cent to a new high of 1,773.2 tonnes compared to 1,269.2 tonnes in 2019.
Most of the growth came in the form of gold-backed exchange traded funds (gold ETFs) and was aided by bar and coin demand growth in the second half of 2020.
Demand for ETFs grew by 120 per cent in 2020 at 877.1 tonnes compared to 398.3 tonnes in 2019.
In addition, the report revealed that over-the-counter (OTC) activity, which is not directly captured in the data set, was also robust throughout the year.
However, in the fourth quarter there was a notable decline in investment demand for gold ETFs with outflows totalling 130 tonnes sequentially.
On the supply front, the report revealed that the total annual gold availability also took a hit in 2020 and was 4 per cent lower at 4,633.1 tonnes compared to 4,819.9 tonnes, the largest annual fall since 2013.
The drop in supply can be largely explained by coronavirus-related disruption to mine production, offset by a marginal 1 per cent increase in recycling to 1,297.4 tonnes for 2020 compared to 1,281.9 tonnes in 2019.
Meanwhile, gold buying by central banks slowed by 59 per cent in 2020, at 273 tonnes compared to 668.5 tonnes in 2019, it noted.
However, the fourth quarter saw a return to modest net buying as global official reserves grew by 44.8 tonnes during the quarter, more than reversing the 6.5 tonnes of net sales from the third quarter, it said.
Nevertheless, despite outflows in the fourth quarter, gold-backed ETFs saw record annual inflows due to low interest rates and high levels of uncertainty, highlighting gold's role as a safe haven asset, Street said.
“Bar and coin demand also saw a strong recovery in the second half of the year, showing that retail investor sentiment remained relatively stable in these volatile markets. Overall, we believe the effects of the pandemic are likely to reverberate into the first quarter of 2021, and possibly beyond,” Street added."
Auto sector going through long-term structural slowdown: SIAM
A serious warning from an auto industry body.
PTI reports: "Automobile industry in India is going through a long-term structural slowdown as the compound annual growth rate (CAGR) across all major vehicle segments has witnessed a decline over the last three decades, as per industry body SIAM.
The auto industry has been facing headwinds even before the COVID-19 pandemic derailed the entire sector last year, a research conducted by the Society of Indian Automobile Manufacturers (SIAM) has revealed.
The study clearly shows that the pandemic is not the only reason for the auto sector slowdown, which is facing deeper structural issues that need attention, the industry body noted.
According to the research, which focused on industry growth rates till March 2020, compounded annual growth rates of all segments, including passenger vehicles, commercial vehicles, three-wheelers and two-wheelers have witnessed a continuous drop over the last three decades.
CAGR of the domestic passenger vehicle industry stood at 12.6 per cent between 1989-90 and 1999-2000. It, however, dropped to 10.3 per cent between 1999-2000 and 2009-10 decade, the research data showed.
The growth rate further dropped to 3.6 per cent in the last decade.
The research further pointed out that contraction in the domestic passenger vehicle segment has been much steeper in the last five years.
From a CAGR of 12.9 per cent between 2004-05 and 2009-10, it came down to 5.9 per cent in the 2009-10 to 2014-15 period.
However, in the last five-year period, between 2014-15 and 2019-20, the CAGR of the passenger vehicle segment has dropped to just 1.3 per cent.
"The numbers show a clear long-term structural slowdown in the Indian automobile market across segments even before COVID pandemic began," SIAM Director General Rajesh Menon noted when contacted over the matter.
For instance, the passenger vehicle market's 10-year CAGR over the decade FY2000 to FY2010 stood at 10.3 per cent which dipped to 3.6 per cent in the decade FY2010 to FY2020, he added.
In the two-wheeler segment, the CAGR has dropped from 9.8 per cent in 1999-2000 to 2009-10 period, to 6.4 per cent in 2009-10 to 2019-20, data showed.
Similarly, the research showed a drastic drop in annual growth rate in the commercial vehicle segment. From a CAGR of 12.7 per cent in 1999-2000 to FY 2009-10, it has come down to just 3 per cent in the last decade.
Further, three-wheeler sales have dropped from a CAGR of 9.8 per cent in the 1999-2000 to 2009-10 period, to just 3.8 per cent in the last ten years.
As per the FY20 statistics, passenger vehicle sales at 27.7 lakh units were the lowest in four years, SIAM data revealed.
Similarly, commercial vehicle sales at 7.2 lakh units were the lowest in three years, two-wheeler sales at 1.74 crore units were the lowest in three years and three-wheeler sales were at lowest in two years at 6.4 lakh units."
Improve health system, enhance global cooperation to tackle COVID-19-like crisis in future: IMF Chief Economist Gita Gopinath
As the world gradually makes its way out of the coronavirus crisis, International Monetary Fund (IMF) Chief Economist Gita Gopinath has said that countries should work on their health system and be ready to provide timely assistance to impacted segments of the society in addition to enhanced global cooperation to be better prepared for addressing such a challenge next time.
The global economy, ravaged by the COVID-19 pandemic, is projected to grow at 5.5% in 2021 and 4.2% in 2022, the IMF said this week, reflecting the expectations of a vaccine-powered strengthening of business activities later in the year and additional policy support in a few large economies.
“There are three key lessons to be learned from the COVID-19 crisis that has impacted global economic activity,” Ms. Gopinath told PTI .
“Firstly, countries should prepare their health systems to be ready for any kind of a health crisis. There are many developing countries that need additional investment in their health infrastructure. That is a very important lesson to be learnt,” she said.
Tata Coffee shares jump over 4% after Q3 earnings
A boost for Tata Coffee investors.
PTI reports: "Shares of Tata Coffee Ltd on Thursday gained over 4 per cent after the firm reported a 20 per cent increase in its consolidated net profit for the quarter ended December.
The stock jumped 3.80 per cent to Rs 115.80 on the BSE.
At the NSE, it gained 4.22 per cent to Rs 116.
Tata Coffee Ltd on Wednesday reported a 20 per cent increase in its consolidated net profit at Rs 50.18 crore for the quarter ended December on higher income.
Its net profit stood at Rs 41.99 crore in the year-ago period.
Total income rose to Rs 538.19 crore in the third quarter of this financial year from Rs 505.75 crore in the corresponding period of the previous year, the company said in a regulatory filing.
The rise in income is driven by improved performance from the group's value-added businesses, Tata Coffee said."
Chad becomes first country to ask for debt overhaul under G20 common framework
Chad has officially requested a debt restructuring, the first country to do so under a new common framework hammered out last year by China and other Group of 20 countries with the help of the Paris Club, the International Monetary Fund (IMF) said on January 27.
An IMF official said official creditors would soon begin discussions on what will be the first test of the new framework and whether China, the world’s biggest official creditor, and private sector creditors would participate as agreed.
The IMF announced Chad’s move in a statement about a new four-year programme worth about $560 million under its Extended Credit and Extended Fund facilities. The deal was agreed by staff, but must still be approved by the IMF’s executive board.
Like several other African countries, Chad is struggling with a high debt burden against a backdrop of the coronavirus crisis and low prices for oil, its major export.
India biz doubled in Dec quarter, feel good about trajectory: Apple CEO Tim Cook
Apple is bouncing back strong.
Reuters reports: "Apple has doubled its business in India in the December quarter on the back of strong performance of its online store, and the tech giant sees a good growth trajectory going ahead, its CEO Tim Cook said.
The Cupertino-based tech giant posted an all-time record revenue of USD 111.4 billion globally for the first quarter ended December 26, 2020, up 21 per cent year-on-year. International sales accounted for 64 per cent of the quarter's revenue.
"... If you take India as an example, we doubled our business last quarter compared to the year-ago quarter. But our absolute level of business there is still quite low relative to the size of the opportunity," Cook said during an analyst call.
The company, which competes with players like Samsung and OnePlus in the premium smartphone segment, has been aggressively ramping up its presence in the Indian market.
"India is one of those, where our share is quite low. It did improve from the year-ago quarter. Our business roughly doubled over that period of time. And so, we feel very good about the trajectory. We are doing a number of things in the area. We put the online store there, for example, and last quarter was the first full quarter of the online store," Cook said.
He added that the online store has received great reaction and has helped the company achieve the strong set of results last quarter.
"We're also going in there with retail stores in the future. And so, we look for that to be another great initiative and we continue to develop the channel as well," he said.
Apple plans to set up brick-and-mortar outlets in India in addition to the online store as the iPhone maker looks to further cement its position in one of the world's largest smartphone markets. In the past, Apple has stated that it is keen on offering online and in-store experiences to Indian users that are at par with its global standards and that it aims to open its maiden retail store in India.
The growth seen by Apple has been noted by research firms like Counterpoint.
According to Counterpoint, Apple captured the sixth spot in terms of shipment in India in the October-December 2020 quarter with 171 per cent year-on-year growth, and 93 per cent growth in 2020 over the previous year. The report said the launch of the iPhone 12, aggressive offers on the iPhone SE 2020 and iPhone 11, and online expansion had driven this growth.
For the first time, the brand crossed 1.5 million shipments in a single quarter, it further noted.
During the analyst call, Apple CFO Luca Maestri said the global December quarter business performance was fueled by "double-digit growth in each product category, which drove all-time revenue records in each of our geographic segments and an all-time high for our installed base of active devices"."
Rupee falls 21 paise to 73.13 against US dollar in early trade
The rupee mirrored the fall in stocks.
PTI reports: "The rupee depreciated by 21 paise to 73.13 against the US dollar in opening trade on Thursday tracking muted opening in domestic equities and strengthening American currency.
At the interbank forex market, the domestic unit opened at 73.13 against the US dollar, registering a fall of 21 paise over its previous close.
On Wednesday, the rupee had settled at 72.92 against the American currency.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.12 per cent to 90.75.
"The US Dollar Index has started higher this Thursday morning in Asian trade amid safe haven appeal for the greenback amid weakening risk appetite," Reliance Securities said in a research note.
Asian currencies were weak against the greenback and could weigh on sentiments, the note added.
Markets will look to cues from US GDP data and a weaker than expected numbers will push more investors towards the US dollar and vice versa, the note said.
The US Federal Reserve has decided to stick to its dovish stance and left key overnight interest rate near zero to maintain monetary support until there is a stronger rebound from the pandemic-triggered recession.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 336.05 points lower at 47,073.88 and the broader NSE Nifty was down 95.60 points at 13,871.90.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 1,688.22 crore on a net basis on Wednesday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 0.61 per cent to USD 55.47 per barrel."
India's gold demand to rebound in 2021 as economy expands - WGC
India could revive demand for gold as the economy springs back to action.
Reuters reports: "India's gold consumption is expected to rebound in 2021 after falling to its lowest in 26 years last year as pent-up demand and higher economic growth are seen boosting sales, the World Gold Council (WGC) said on Thursday.
Higher purchases by the world's second-biggest bullion consumer could support gold prices, which hit a record high last year, although that could increase India's trade deficit and weigh on the ailing rupee.
Coronavirus led-lockdowns slashed India's gold demand by 35% in 2020 to 446.4 tonnes, the lowest since 1994, the WGC said in a report published on Thursday.
However, demand is expected to rebound in 2021 to around 2019 levels as economic growth is forecast to rebound helped by falling COVID-19 cases, said Somasundaram PR, the managing director of the WGC's Indian operations.
India's economy is seen growing 11.5% in 2021, the International Monetary Fund said on Tuesday.
"As lockdowns eased and normalisation efforts were phased in, imports in the December quarter rose 19% year-on-year, pointing to the positive impact of pent-up demand. This can be expected to continue into 2021," Somasundaram said.
India's gold imports of 164.4 tonnes in the December quarter were the highest in six quarters, fuelled by improving demand during the key Hindu festivals of Dussehra and Diwali, the WGC said.
India's investment demand rose 8% in the December quarter on the year to 48.9 tonnes, its highest in two years, as people boosted purchases of gold coins and bars in expectations that bullion prices would rise further, Somasundaram said.
"We will see a sharp rise in investment demand. Amid low interest rates and higher stock prices, people are looking at gold to diversify their investments," he added.
In rural areas gold demand in the last few months was robust following surplus monsoon rainfall that yielded a record harvest of summer-sown crops, the WGC said."
Shares fall for fifth straight day ahead of budget next week
The fall in stocks continues.
Reuters reports: "Indian shares fell for a fifth straight session on Thursday, dragged lower by bank and information technology stocks, as investors locked in gains ahead of the federal budget next week.
The blue-chip NSE Nifty 50 index was down 0.95% at 13,834.90 by 0507 GMT, after falling as much as 1.2% to its lowest level since Dec. 24. The benchmark S&P BSE Sensex slid 0.94% to 46,965.92.
"The market has been on a downward trend during the last couple of days and that is not surprising because during the last two years, we have seen the fortnight preceding the budget to be a cautious time" said Anand James, chief market strategist at Geojit Financial Services in Kochi.
"This year, we have approached the budget on a high and that is all the more reason for traders to take some money off the table," James said.
Indian equities had coasted at record highs for multiple sessions this month as investors bet on an economic recovery from the rollout of COVID-19 vaccines as well as a boost from foreign fund inflows.
Axis Bank, which fell to a near one-month low earlier in the session after reporting a slump in quarterly profit, reversed losses to trade 1.6% higher. The Nifty Bank index shed 1.3%.
The Nifty IT index declined 1.5%, weighed down by heavyweights Tata Consultancy Services and Infosys that shed 1% and 1.4%, respectively.
Reliance Industries bounced after three sessions of losses that saw the conglomerate shed over 10%, and rose 0.6% to be the top boost to the Nifty 50 index.
HDFC Bank and Kotak Mahindra Bank were the top drags to the Nifty, falling 3% and 3.1%, each.
Investors now await results from automaker Maruti Suzuki India and InterGlobe Aviation Ltd — the operator of the country's largest airline IndiGo."
High debt burden could hamper India’s ability to provide stimulus: Moody’s
India’s high government debt could limit its ability to give a fiscal stimulus to the economy, Moody’s Investors Service noted in a report on credit conditions in Asia.
Job losses, income shocks and the gaps in health infrastructure pose ‘highly negative risks’ for the country’s growth prospects, Moody’s added. “In India, a high government debt burden will limit the extent of fiscal support, although the government has undertaken a number of measures to improve policy transmission and broader structural reforms,” it pointed out. It warned that the sheer magnitude of the recession would lead to a degree of economic scarring in the more vulnerable Asian economies, which was likely to have persistent effects on potential output.
