The benchmark stock indices have opened the day with significant gains this morning capitalizing on Friday's momentum.
The rally in stocks has been fueled by speculation that the government may recapitalize some troubled PSU banks.
Join us as we follow the top business news through the day.
US dollar maintains status as world's reserve currency
Sensex rallies 593 points; financial, auto stocks take charge
A great day for the benchmark stock indices.
PTI reports: "Equity benchmark Sensex rallied 593 points on Monday, driven by intense buying in mainly financial and auto stocks amid strong cues from global markets.
The 30-share BSE Sensex settled 592.97 points or 1.59 per cent higher at 37,981.63, while the NSE Nifty surged 177.30 points or 1.60 per cent to 11,227.55.
In the Sensex pack, IndusInd Bank was the top gainer, soaring around 8 per cent, followed by Bajaj Finance, Axis Bank, PowerGrid, ONGC, ICICI Bank, Sun Pharma and M&M.
On the other hand, HUL, Infosys and Nestle ended in the red.
“Key Indices ended high as bulls led the charge backed by financials and well supported by auto and pharma stocks,” said S Ranganathan, Head of Research at LKP Securities.
According to traders, domestic equities traded on a positive note tracking strong buying sentiment in global equities ahead of the first US presidential debate.
Global investors are eyeing the first US presidential debate, set for Tuesday, between US President Donald Trump and Democratic candidate Joe Biden.
It could influence the course of US policies and is likely to affect share prices across the world, analysts said.
Bourses in Hong Kong, Tokyo and Seoul ended on a positive note, while Shanghai was in the red.
Stock exchanges in Europe were trading with strong gains in early deals.
Meanwhile, international oil benchmark Brent crude was trading 0.68 per cent lower at USD 42.12 per barrel.
In the forex market, the rupee settled 18 paise lower at 73.79 against the US dollar."
Adani debunks GDP rhetoric, says India will be 2nd largest economy by 2050
Some support coming in for the government.
PTI reports: "Billionaire Gautam Adani has debunked the narrow fixation on GDP numbers, saying fundamentals are intact and India will be the second-largest economy by 2050 and has an edge over global peers in terms of business opportunities.
Speaking at the JP Morgan India Summit - Future in Focus, the Adani Group chairman said the AatmaNirbhar Bharat programme will be a game-changer.
“I will state without any hesitation — that — in my view - over the next three decades, India is the world’s greatest business opportunity,” he said.
India’s geostrategic position and massive market size give it an edge over its global peers amid the fundamental political realignment of nations taking shape, he said adding opportunities for India are likely to accelerate on the other side of the pandemic.
“For the sake of the fans of the GDP metric, let’s look at some statistics. The global GDP in 1990 was USD 38 trillion. Today, 30 years later, this number is USD 90 trillion. Projecting for another 30 years, in 2050 the global GDP is expected to be about USD 170 trillion with India becoming the second-largest economy in the world,” he said.
The Indian economy shrank by a record 23.9 per cent in the April-June quarter because of the COVID-19 pandemic and the lockdown that followed. The economy is projected to contract for the first time in four decades, in the full year to March 2021.
But Adani said short-term setbacks due to a global crisis cannot be used to write off the country as its fundamentals remain intact.
“The current focus on standardised GDP predictions as against truly understanding what a nation could look like over a decade has unfortunately become one of the primary elements for measuring the health of an economy. In my view, patience and long-term planning and most importantly, an alignment with the government’s business agenda are what creates the greatest value,” he said.
Speaking of challenges holding back India, Adani said that India needs USD 1.5 to 2 trillion of capital over the next decade but despite key structural reforms such as the National Investment and Infrastructure Fund and Credit Enhancement Fund, capital structure challenges, and lack of empowered and independent regulators remain bottlenecks to nation-building and investment opportunities.
The first generation entrepreneur, who built India’s biggest infrastructure group with interests spanning from seaports to airports and energy, coaxed the audience to look at opportunities through his ‘optimist’ lenses.
“As an entrepreneur, I am an optimist, and therefore the lenses through which I see opportunities may be different than some of yours. I recognise that the view that you cannot build a long-term future on short-term thinking, may not be in alignment with the objectives of certain priorities of the investment community,” he said.
He told the forum to stop viewing all nations through old Western growth metrics.
“Democracy cannot take a cookie-cutter approach and we should accept that different nations will have their own flavour of democracy and capitalism.”
Stating that the AatmaNirbhar Bharat or self-reliant India programme will be a game-changer, he said India building a crumbling supply chain infrastructure that stood exposed to COVID-19, as also a strong head start in digital transformation will help re-build the economy."
RBI reschedules MPC meeting, new dates to be announced shortly
A surprise rescheduling by the central bank.
PTI reports: "The Reserve Bank of India (RBI) on Monday decided to rescheduled this week’s meeting of the Monetary Policy Committee (MPC) and said that the new dates will be announced shortly.
The central bank, however, did not give any reason for rescheduling the meet.
The interest-setting panel was scheduled to meet for three-days beginning Tuesday for RBI’s bi-monthly monetary policy review.
The meeting of the MPC during September 29, 30 and October 1, 2020 as announced is being rescheduled. The dates of the MPC’s meeting will be announced shortly, the RBI said in a press release.
RBI is awaiting the government’s decision on new external members to the committee.
As per the RBI Act, external members of MPC have a tenure of four years. The MPC came into existence in October 2016."
Rupee settles 18 paise lower against US dollar
The bull run in stocks did not help the rupee very much today.
PTI reports: "The rupee pared initial gains to settle 18 paise lower at 73.79 (provisional) against the US dollar on Monday even as the domestic equity market was trading with significant gains.
The local unit opened 3 paise lower at 73.64 at the interbank forex market. After witnessing a volatile trading session, it finally closed at 73.79 against the greenback, down 18 paise over its previous close.
On Friday, the rupee had staged a smart rebound and close at 73.61 against the US dollar.
During the session, the domestic unit witnessed an intra-day high of 73.53 and a low of 73.86 against the American currency.
Forex traders said investors are looking for cues from the first presidential debate between US President Donald Trump and Democratic candidate Joe Biden, set for Tuesday.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.16 per cent to 94.49.
On the domestic equity market front, BSE benchmark Sensex was trading 566.17 points higher at 37,954.83, and the broader NSE Nifty rose 174.05 points to 11,224.30.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 2,080.21 crore on a net basis on Friday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.57 per cent to USD 41.68 per barrel."
Lakshmi Vilas Bank shareholders vote against reappointment of top leaders
In a major development, the shareholders of Lakshmi Vilas Bank Ltd. rejected resolutions pertaining to apppointment of seven directors including its chief executive officer at the recently 93th Annual General Meeting, expressing unhappiness over the functioning of the bank.
On Sunday, the board held an emergency meeting with remaining directors to find a way forward to appoint a committee to name the next managing director in the place of S. Sundar, who stepped down after the AGM on Friday, to carry out the merger talks and raise the much needed funds among other issues.
The cash-strapped private sector has been struggling for the last two years without adequate funds and has been scouting for investors to bail it out. It was placed under Prompt Corrective Action framework by the RBI as most the key parameters turned negative. After a failed merger talks with Indiabulls Housing Finance, LVB managed to find a suitor and announced that it was likely to seal a deal with Clix Capital and the next step was to appoint a valuer.
Data | Indian Railways spent ₹101.77 for every ₹100 earned in FY19, says CAG
The Indian Railways spent more money than it earned in FY19 , according to the CAG’s latest audit report. In the last five years, the Railways has consistently fallen short of the projected earnings. As a result, its dependence on extra-budgetary resources such as funds from the LIC has increased significantly. The financial situation of the Railways may worsen due to the effects of the COVID-19-related lockdown.
In FY19, the Railways spent ₹97.29 to earn ₹100, that is, its operating ratio (OR), represented by the blue line, was 97.29%. The CAG observed that the Railways had “window dressed” this figure by including advances paid to it for freight handling for FY20.
Matrimony.com expects double digit growth to continue: Founder
The pandemic isn't slowing down the matchmaking website's business prospects.
PTI reports: "Matchmaking service provider Matrimony.com was expecting to record double digit growth in revenues and would invest in products and marketing to garner a larger pie of the market share, a top official said.
The city-based company witnessed an impact of the COVID-19 on the industry, however, saw its membership grow by 30 per cent during the period, Matrimony.com founder-CEO, Murugavel Janakiraman said.
“The reason (for the increase in membership by 30 per cent) was professionals who were postponing their marriage due to career priorities started signing up since they had more time (during the lockdown)...,” he told P T I.
The move towards use of digital technology also helped the company to record growth in revenues in recent months, he said.
On the measures the company took to overcome the pandemic outbreak, he said, “we adapted (to the new norms) quickly be it in enabling thousands of employees to work from home, driving down costs or improving efficiency.”
Stating that the company’s April-June quarter did witness an ‘impact’ due to COVID-19, he said, “this quarter (July-Sep) we are having the best growth in the last couple of years. We expect the momentum to continue“.
Asked whether the company was looking at strengthening its services in rural areas, he said, “digital penetration and adoption have been high across the Tier II and III cities, where we have been growing fast. This is an opportunity to grow the matrimony category.”
On the company’s launch of video chat feature, he said the video calling feature has seen very good reception from members who were seeking prospective alliances for their son and daughters.
“Our video calling has helped many take their (marriage) conversations forward even during the lockdown period”, he added.
To a query as to whether the company announced salary cuts to employees, he replied in the negative.
“No, we did not do any salary cuts. But we did optimise our resources a bit,” he added.
On the outlook for the company, Janakiraman said, “we expect to continue double digit growth (in terms of revenues) and shall invest in product and marketing to grow the market share“.
According to a company statement, Matrimony.com holds a 60 per cent market share and BharatMatrimony is the flagship brand.
For the year ending March 31, 2020 the company closed revenues of Rs 371.80 crore with 7.04 lakh subscribers."
Gold inches higher on tepid dollar; Trump-Biden debate in focus
An update on the gold market.
PTI reports: "Gold prices edged up on Monday as the dollar slipped off a two-month peak hit last week as political uncertainty accelerated ahead of the first presidential election debate between U.S. President Donald Trump and his Democratic rival Joe Biden.
Spot gold was up 0.1% at $1,861.13 per ounce by 0503 GMT. U.S. gold futures were steady at $1,865.90.
“Gold is going to be driven by the tenor of the U.S. dollar,” said Stephen Innes, chief market strategist at AxiCorp.
“The big move is going to probably occur after the presidential debate when we have a better read on where the polls are going to be sitting.”
The dollar index was down 0.2% against rivals, slightly off a two-month peak hit last week.
A firmer dollar makes bullion more expensive for holders of other currencies.
Trump and Biden will have their first presidential election debate on Tuesday.
Investor focus will also be on a new fiscal support package after U.S. House Speaker Nancy Pelosi said on Sunday a deal could be reached with the White House on a coronavirus relief package and that talks were continuing.
“I don't think they are expecting a big deluge but some sort of middle ground,” Innes added.
Global central banks and governments have released massive stimulus to prop up their economies from the impact of the COVID-19 pandemic, pushing gold more than 20% higher this year. However, prices have retreated by about 10% since hitting a record peak in August.
On the technical front, spot gold may break support at $1,855 per ounce, said Reuters technical analyst Wang Tao.
Meanwhile, speculators reduced their bullish positions in COMEX gold and silver contracts in the week to Sept. 22.
Elsewhere, silver was steady at $22.87 per ounce, platinum gained 0.6% to $852.21 and palladium rose 0.1% to $2,218.18."
The Hindu Explains | Where are the funds collected through cess parked?
The story so far: The Comptroller and Auditor General (CAG) of India, in its latest audit report of government accounts, has observed that the Union government withheld in the Consolidated Fund of India (CFI) more than ₹1.1 lakh crore out of the almost ₹2.75 lakh crore collected through various cesses in 2018-19. The CAG found this objectionable since cess collections are supposed to be transferred to specified Reserve Funds that Parliament has approved for each of these levies. The nation’s highest auditor also found that over ₹1.24 lakh crore collected as Cess on Crude Oil over the last decade had not been transferred to the designated Reserve Fund — the Oil Industry Development Board — and had instead been retained in the Centre’s coffers. Similarly, the Goods and Services Tax (GST) Compensation Cess was also “short-credited” to the relevant reserve fund to the extent of ₹47,272 crore in two years (₹40,806 crore in 2018-19 and ₹6,466 crore in 2017-18).
Voda Idea starts upgrading 3G users to 4G
Telecom operator Vodafone Idea Ltd (VIL) on Sunday said it has started upgrading its 3G users to 4G in key markets.
Further, the company said it is in the best position to upgrade 2G customers also to 4G, but it will continue with basic voice based services to its 2G subscribers.
“While the company will continue to offer basic voice services to its 2G users, 3G data users will gradually be upgraded to 4G in a phased manner across all markets. VIL has started informing its customers in the markets where re-farming is getting completed,” it said in a statement.
With the highest quantum of spectrum in the country and a large part of it already re-farmed for 4G, VIL is now best placed to upgrade 2G and 3G users to high speed 4G data services, Vodafone Idea managing director and CEO Ravinder Takkar said.
Biggest experiment in monetary history
Rupee rises 6 paise to 73.55 against US dollar in early trade
The Indian currency is marginally up on the positive sentiment in stocks.
PTI reports: "The Indian rupee advanced 6 paise to 73.55 against the US dollar in opening trade on Monday tracking weak American currency and positive domestic equities.
The local unit opened 3 paise lower at 73.64 at the interbank forex market, then gained ground and touched 73.55 against the greenback, up 6 paise over its previous close.
On Friday, the rupee had staged a smart rebound and close at 73.61 against the US dollar.
Forex traders said investors would look for cues from the first presidential debate between US President Donald Trump and Democratic candidate Joe Biden, set for Tuesday.
“The market would look forward to how Biden stands up to Trump. President Trump would want to consolidate his Republican base, touching upon issues which resonate most with them,” said Abhishek Goenka, Founder and CEO, IFA Global.
Goenka further said that “today (Monday) is the September Currency derivatives expiry. We could see some selling at RBI fix. Month-end exporter selling could limit up side in USD-INR. It is likely to trade 73.50-73.85 range intraday.”
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.16 per cent to 94.48.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 343.64 points higher at 37,732.30 and the broader NSE Nifty rose 103.90 points to 11,154.15.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 2,080.21 crore on a net basis on Friday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.72 per cent to USD 41.62 per barrel."
Read, compare and decide
We are usually at an information disadvantage while buying financial products.
This asymmetry of information, as it is called, comes on top of our own disregard to seeking information. There is also hesitation that we may not understand it. There is also partial information and misinformation we often receive and then, there is poor application of mind when we do receive it.
The Internet is a great leveller with regard to information and just made for insurance, so to speak.
We are right in the middle of a public health crisis that has made us buy and pay for everything from vegetables to white goods online. Work, studies and entertainment have all embraced the digital way. Online banking is now quite mainstream and insurance need not be very far behind.
Indian shares rise as state-run banks gain on capital infusion hopes
The benchmark stock indices are carrying on their momentum from Friday's session.
Reuters reports: "Indian shares rose on Monday, boosted by state-owned banking stocks on hopes that the government may infuse some capital into the sector as early as the coming quarter, with gains in Asian markets aiding sentiment.
The broader NSE Nifty 50 index rose 0.5% to 11,105 and the S&P BSE Sensex climbed 0.6% to 37,610.34 by 0346 GMT. Both the indexes fell nearly 4% last week, marking their worst week since early-May.
The public sector bank index gained 1% after a report https://bit.ly/30fQcb0 said that the finance ministry may provide capital support to some public sector banks in the third quarter.
Shares of Lakshmi Vilas Bank Ltd fell 4.7% after the lender's shareholders on Friday rejected https://bit.ly/336xGDN the reappointment of seven directors, including the managing director and chief executive, and India's central bank appointed https://bit.ly/3cBw3B8 a committee to run the bank. (https://bit.ly/336xGDN) (https://bit.ly/3cBw3B8)
Meanwhile, MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.5%."
Neutrality must for platforms, app stores and devices, says outgoing TRAI chief
Just as principles of net neutrality have been applied to telecom networks, neutrality of platforms, app stores, operating systems, and devices are crucial aspects that will need to be examined and ensured in the digital era, outgoing TRAI chief RS Sharma has said.
Mr Sharma termed this as a “new frontier” that merits attention, and emphasised that ‘neutrality’ is important to ensure that devices, operating systems and digital platforms don’t emerge as “new gatekeepers” or exercise arbitrary controls.
“Who will get into that area...I am not saying whether Trai should do it, or who someone else...I am saying neutrality of devices, operating systems and platforms is something that should be examined and ensured,” he told PTI .
