Today's top business news: Stocks nosedive as financials lead sell-off, oxygen crisis to ease by mid-May as output to jump 25%, India's credit growth may dip further after touching record low, and more

A man wears a mask and walks past the BSE building, as the Sensex crashed by nearly 3000 points, in Mumbai, Friday, March 13, 2020.

A man wears a mask and walks past the BSE building, as the Sensex crashed by nearly 3000 points, in Mumbai, Friday, March 13, 2020.

The Nifty and the Sensex opened the day on a negative note, slipping after consecutive days of gains this week.

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

4:30 PM

Govt sets record 104.3 million tonne rice production target for 2021-22 kharif season

The government on Friday set a record rice production target of 104.3 million tonne for the kharif season of 2021-22 crop year (July-June).

Rice is the main crop grown in the kharif season, sowing of which begins with the onset of southwest monsoon from June.

In the kharif season last crop year, rice production was estimated to be at 103.75 million tonne against the target of 102.60 million tonne, as per the agriculture ministry's second advance estimate.

Discussing with states about the preparedness for the forthcoming kharif season, Agriculture Commissioner S.K. Malhotra said southwest monsoon as a whole is likely to be normal this year as per the Met Department.

The rice production target for the 2021-22 kharif season is set at a record 104.3 million tonne.

4:00 PM

Sensex nosedives 984 pts; financial stocks lead sell-off

Volatility is back in stocks.

PTI reports: "Snapping its four-session winning run, market benchmark Sensex plummeted 984 points on Friday, tracking an intense selloff in financial stocks amid a negative trend in Asian equities.

The 30-share BSE index sank 983.58 points or 1.98 per cent to finish at 48,782.36.

Similarly, the broader NSE Nifty tanked 263.80 points or 1.77 per cent to 14,631.10.

HDFC twins were the top losers in the Sensex pack, shedding over 4 per cent, followed by ICICI Bank, Kotak Bank, Asian Paints, M&M, HUL, TCS and Maruti.

On the other hand, ONGC, Sun Pharma, Dr Reddy’s and Bajaj Auto were the gainers.

According to Binod Modi, Head-Strategy at Reliance Securities, domestic equities fell sharply on weak global cues and heavy sell-off in financial stocks. Asian markets traded weak on emerging concerns about growth after China's factory activity expanded slower than expected in April.

Barring pharma, metals and IT, most of key sectoral indices saw selling pressure.

"Persistent rise in daily caseload and higher number of deaths continue to remain matter of concerns for central and state governments and therefore any possibility of further economic restrictions cannot be ruled out by the state governments. Market is expected to be volatile until we see a clear reversal in COVID-19 cases," he said.

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

Bourses in Europe were trading with marginal gains in mid-session deals.

Meanwhile, international oil benchmark Brent crude was trading 1.31 per cent lower at USD 67.15 per barrel."

3:40 PM

India's credit growth may dip further after touching record low

Looks like the credit cycle may not turn anytime soon.

Reuters reports: "Indian bank credit growth hit a record low in fiscal 2020-21 and is expected to languish near those levels this year as a massive surge of COVID-19 infections risks denting India's economic recovery and forces lenders to turn cautious again.

Credit growth touched a record low of 5.6% in financial year 2021, recently released Reserve Bank of India (RBI) data showed, and it slipped even further in April.

"We were estimating credit growth of 8-9% for this financial year, but due to the rise in COVID-19 cases, a higher mortality rate and lockdowns in several parts of the country, downward risks have arisen," said Karthik Srinivasan, analyst at ICRA.

India's total number of COVID-19 cases passed 18 million on Friday and its official death toll topped 200,000, although many fear the real toll may be much higher.

Some fear credit growth may worsen as a dramatic improvement in macroeconomic outlook anytime soon looks unlikely.

"Demand for credit is restrained while supply side conditions are far from conducive, and may even turn more challenging as policy support fades...The deterioration in the risk profile of borrowers is a major handicap," ANZ economists Sanjay Mathur and Krystal Tan wrote in a recent research note.

Risk-averse savers however have continued to park funds in term deposits with banks amid high volatility in stock markets and high gold prices. This has led to banks' deposit growth remaining fairly strong compared to 2019 levels.

Lending on the other hand, particularly to corporates, was muted in 2020/21, and analysts and bankers rule out any major improvement for at least two quarters.

With several industries seeing capacity utilisation of less than 75%, they have put expansion and borrowing plans on hold with commercial paper (CPs) borrowings also falling.

Banking system liquidity, however, remains flushed.

"Lending picked up slightly at the end of last year but due to this challenging second (coronavirus) wave we're all focusing on collections more than growing the book," said a banker at a state-owned bank.

"Banks are on wait-and-watch mode for lending right now," he added.

The central bank has said it will ensure ample liquidity so that there is sufficient credit available for productive sectors of the economy and markets for absorbing the government's massive borrowing programme.

Net durable liquidity has remained above 8 trillion rupees on average since November last year.

Despite the RBI's assurances on liquidity, lending has remained weak. Though the cost of borrowing has fallen steeply since last year and more credit has been made available to banks to lend, there have been very few takers of these loans.

The credit-deposit ratio shows how much of each rupee of deposit is extended by the bank as actual credit disbursal and is thus one of the basic credit growth indicators in the economy.

The continued fall in the CD ratio indicates credit demand has been a bigger problem than credit supply, and the banks' recent risk averseness due to a potential rise in bad debt could further aggravate this situation."

3:20 PM

Facebook to roll out vaccine finder tool on mobile app in India

Social media comes to the rescue.

PTI reports: "Facebook on Friday said it is partnering with the Indian government to roll out a vaccine finder tool on its mobile app in India, which will help people identify places nearby to get inoculated.

The social media giant had, earlier this week, announced a USD 10 million grant for emergency response efforts for COVID-19 situation in the country.

"Partnering with the Government of India, Facebook will begin rolling out its Vaccine Finder tool on the Facebook mobile app in India available in 17 languages to help people identify places nearby to get the vaccine," Facebook said in a post on the platform.

In this tool, vaccine centre locations and their hours of operation have been provided by the Ministry of Health and Family Welfare (MoHFW).

The cumulative number of COVID-19 vaccine doses administered in the country has crossed 15.22 crore. Also, more than 2.45 crore people have registered themselves on the Co-WIN digital platform ahead of the Phase-3 of the COVID-19 vaccination for those above 18 years that is set to start from May 1.

Facebook said its tool will also show walk-in options (for 46 years and above) and a link to register on the Co-Win website and schedule vaccination appointment.

The massive rise in infections in the second wave of the pandemic has led to hospitals in several states reeling under a shortage of medical oxygen and beds.

Social media platforms like Facebook and Twitter have emerged as a lifeline, connecting those looking for oxygen cylinders, hospital beds, plasma donors, and ventilators with possible donors.

Facebook said it is partnering with organisations such as United Way, Swasth, Hemkunt Foundation, I Am Gurgaon, Project Mumbai and US-India Strategic Partnership Forum (USISPF) to deploy the funds announced to help augment critical medical supplies with over 5,000 oxygen concentrators and other life-saving equipment like ventilators, BiPAP machines and to increase hospital bed capacity.

The company is also supporting NGOs and UN agencies in the country with ad credits and insights to reach the majority of people on Facebook with COVID-19 vaccine and preventive health information.   The platform is also providing health resources to people from UNICEF India about when to seek emergency care and how to manage mild COVID-19 symptoms at home.

"The information is accessible and prominent on Facebook's COVID-19 Information Center and in Feed. On Instagram, we are promoting this information via Guides in Explore," it noted.

Twitter too has set up a COVID-19 SOS page that helps surface information from those offering or seeking immediate help during this crisis.

"We have also built a series of Twitter Moments to help you get the facts from the most reliable sources, because we know not all the information you see on the service is credible. These dedicated Moments about vaccine safety, how to stay safe and more, include detailed and accredited information from organisations like the MoHFW and World Health Organization, among others," it added.

Twitter is also expanding its efforts to surface credible COVID-19 information with home Timeline prompts featuring the latest information about COVID-19 vaccines in English and Hindi. This, it said, will help those looking for up-to-date, localised information about vaccine safety, vaccine eligibility and other details.

Twitter said it is currently matching 'Tweep' donations at 300 per cent organisations including Oxfam India, Akshay Patra Foundation, Child Rights and You and Rise Against Hunger India.

It has made a separate USD 100,000 donation to Hemkunt Foundation to support their work in donating oxygen cylinders."

3:00 PM

Amfi slashes ARN registration, renewal fees for mutual fund distributors by 50%

An entry barrier torn down.

PTI reports: "Mutual fund industry body Amfi on Friday said it has reduced the ARN (AMFI Registration Number) registration and renewal fees for most distributor types, including individual ones, by 50 per cent of the existing rates, effective from May 1.

In addition, the EUIN (Employee Unique Identification Number) registration and renewal fees for employees cut down to Rs 500 from Rs 1,500 and Rs 750, respectively.

By reducing the ARN and EUIN registration and renewal fees, Amfi wants to encourage new and young individuals across the country to reach out to large base of small savers, especially in the Tier II and III cities and towns, to channelise financial savings into mutual fund asset class, the industry body said in statement.

The ARN registration and renewal fees for the individuals and proprietorship firm has been reduced by 50 per cent to Rs 1,500 and Rs 750, respectively, while for the post office and microfinance institutions (MFIs) the ARN registration and renewal fees has been slashed by 50 per cent to Rs 7,500 and Rs 3,750, respectively.

The urban co-operative banks, societies, trusts, HUFs and partnership firms will pay registration and renewal charges at 50 per cent reduction to Rs 10,000 and Rs 5,000, respectively, while the one person company (OPC), LLPs, and Pvt. Ltd. Co. would pay 50 per cent downward revised registration and renewal fees at Rs 20,000 and Rs 10,000, respectively.

All fees will be subject to applicable taxes, Association of Mutual Funds in India (Amfi) said.

"We aim to have greater number of small savers to benefit from long term investment solutions offered by the mutual fund industry," Nilesh Shah, Chairman, Amfi said.

He, further, said this initiative of reducing the registration and renewal fees would help larger number of individuals from across the country to come into mutual fund distribution fold and contribute to the last mile connectivity.

N S Venkatesh, Chief Executive, Amfi said the reduced fees for ARN and EUIN registration and renewals for the mutual fund distributors would go a long way in helping the cause of mutual fund expansion.

"We also want the younger generation to look at mutual fund distribution as an exciting career opportunity and with this reduction in fees we hope to attract far higher number of new mutual fund distributors which would help the industry to enhance penetration and channelize small savings into long term market-linked savings solutions," he said.

According to him, rising affinity for mutual fund asset class would get a strong fillip with this reduction in the ARN registration and renewal fees for the distributor or fraternity."

2:30 PM

Tata Coffee shares zoom over 9% after strong Q4 earnings

Today's big mover among stocks.

PTI reports: "Shares of Tata Coffee on Friday jumped over 9 per cent after the company posted a more than two-fold jump in consolidated net profit for the fourth quarter of the 2020-21 fiscal.

The stock gained 9.26 per cent to Rs 139.70 -- its 52-week high -- on the BSE.

On NSE, it zoomed 9.42 per cent to its 52-week high of Rs 139.85.

Tata Coffee on Thursday posted a more than two-fold jump in consolidated net profit at Rs 57.37 crore for the fourth quarter of the 2020-21 fiscal on strong income.

The company had posted a net profit of Rs 24.05 crore in the same quarter of the previous fiscal, according to a regulatory filing.

Net income rose by 17 per cent to Rs 612.06 crore in the fourth quarter of 2020-21 from Rs 523.46 crore in the year-ago period.

Expenses remained higher at Rs 529.48 crore as against Rs 475.71 crore in the said period.

Tata Coffee Managing Director Chacko P Thomas said: "Despite challenging conditions, our overall performance has been strong.""

2:00 PM

Government to import 4.5 lakh vials of antiviral drug Remdesivir amid spike in COVID-19 cases

Govt imports for emergency imports.

PTI reports: "The government has placed orders for import of 4.5 lakh vials of antiviral drug Remdesivir with the first consignment of 75,000 vials expected to reach Indian shores on Friday, Chemicals and Fertilisers Ministry said in a statement.

The government has started importing the vital drug from other countries to ease its shortage in the country, it said.

The first consignment of 75,000 vials will reach India on Friday, it added.

Demand for Remdesivir has gone up manifold in the country with a surge in COVID-19 cases.

The antiviral drug is being used in the treatment of infectious disease.

HLL Lifecare Ltd, a Government of India owned company has ordered 4,50,000 vials of Remdesivir from M/s Gilead Sciences Inc USA and Egyptian Pharma Company, M/s Eva Pharma, the release said.

It is expected that Gilead Sciences will dispatch 75,000 to 1,00,000 vials in the next one or two days, it noted.

Further one lakh vials will also be supplied before or by May 15, the release said.

EVA Pharma will supply around 10,000 vials initially followed by 50,000 vials every 15 days or till July, it added.

The Chemicals and Fertilisers Ministry said it has also ramped up the production capacity of Remdesivir in the country.

As on April 27, the production capacity of the seven licensed domestic manufacturers has increased from 38 lakh vials per month to 1.03 crore vials per month, it said.

Besides, a total 13.73 lakh vials have been supplied across the country by the drug companies in the last seven days (April 21-28). The daily supply has gone up from 67,900 vials on April 11 to 2.09 lakh vials on April 28, it added.

An advisory was also issued by Ministry of Home Affairs to states and union territories to facilitate smooth movement of Remdesivir supplies, the ministry noted.

The government has also taken various steps, like ban on exports and customs duty waiver, to enhance the availability of Remdesivir in the country, it said.

India saw 3,86,452 new coronavirus infections in a span of 24 hours, the highest single-day rise so far, pushing the total tally of COVID-19 cases to 1,87,62,976, while active cases crossed the 31-lakh mark.

The death toll increased to 2,08,330 with 3,498 new fatalities, as per the Union health ministry data."

1:00 PM

Ford to decide on India investment plan in second half of 2021

Ford Motor Co expects to firm up capital allocation plans for India in the second half of 2021, a senior executive said in an email to staff, as the automaker overhauls its strategy in a loss-making market.

Dearborn, Michigan-based Ford has tasked senior executive Steven Armstrong with evaluating investment plans for India in his new role as transformation officer, South America and India, the automaker said in a separate statement this week.

“We have a lot of work to do as we continue to assess our capital allocations in the market,” Dianne Craig, president of Ford’s International Markets Group (IMG), said in an email to staff on Wednesday, referring to India.

“While we expect to have an answer in the second half of this year, the appointment of Steven... will help focus our efforts and speed up the process,” she said.


12:30 PM

Twitter shares fall as it warns of fizzling user growth, rising costs

Twitter Inc shares sank on Thursday as it reported a surge in ad sales but warned of rising costs and expenses and said user growth could slow in the coming quarters as the flow seen during the coronavirus pandemic fizzles.

The social media company also said stock based compensation for new hires would be more than expected this year.

Shares of Twitter fell 8.7% to $59.30 in trading after thebell.

Twitter says it wants to reset after years of product stagnation, announcing in February bold goals to expand its user base, speed up new features for users, and double its revenue by 2023.

Ad revenue for the first quarter were $899 million, up 32% from the same period a year ago and beating analyst estimates of $890 million, according to IBES data from Refinitiv. Total revenue for the quarter was $1.04 billion, up 28% year-over-year and slightly higher than estimates of $1.03 billion.


12:00 PM

India's oxygen crisis to ease by mid-May, output to jump 25% - executive

The likely trajectory of the oxygen shortage crisis.

Reuters reports: "India's severe medical oxygen supply crisis is expected to ease by mid-May, a top industry executive told Reuters, with output rising by 25% and transport infrastructure ready to cope with a surge in demand caused by a dramatic rise in coronavirus cases.

Dozens of hospitals in cities such as New Delhi and Mumbai have run short of the gas this month, sending relatives of patients scrambling for oxygen cylinders, sometimes in vain.

Medical oxygen consumption in India has shot up more than eight-fold from usual levels to about 7,200 tonnes per day this month, said Moloy Banerjee of Linde Plc, the country's biggest producer.

"This is what is causing the crisis because no one was prepared for it, particularly the steep curve up," Banerjee, who heads the company's South Asia gas business, told Reuters on Thursday.

Linde - whose two affiliates in the country are Linde India and Praxair India - and other suppliers are ramping up production to a total of more than 9,000 tonnes per day by the middle of next month, he said.

A logistics crisis impeding the speedy movement of oxygen from surplus regions in eastern India to hard-hit northern and western areas would also be resolved in the coming weeks as more distribution assets are deployed, Banerjee said.

"My expectation is that by the middle of May we will definitely have the transport infrastructure in place that allows us to service this demand across the country," he said.

Banerjee said India was importing around 100 cryogenic containers to transport large quantities of liquid medical oxygen, with Linde providing 60 of those. Some are being flown in by Indian Air Force aircraft.

Many of these containers will be placed on dedicated trains that would cut across the country, each carrying between 80-160 tonnes of liquid oxygen and delivering to multiple cities.

The company is also looking to double the number of oxygen cylinders in its distribution network to at least 10,000, which would improve supply to rural areas with weak infrastructure.

"We are trying to create a hub-and-spoke type of system so that we make a lot of liquid oxygen available at the local area, from where the local dealers can pick it up," Banerjee said.

India's total COVID-19 cases passed 18 million on Thursday after another world record number of daily infections."

11:30 AM

Indian pharma frets as China airline uncertainty hits supply

India’s pharmaceuticals industry is concerned that the disruption to Chinese carrier Sichuan Airlines’ cargo services to the country may seriously hit the imports of key raw materials and has appealed to the Indian envoy to help find a solution.

“The decision of Chinese state-owned Sichuan Airlines suspending its cargo services to India for 15 days is worrisome,” Pharmaceuticals Export Promotion Council of India (Pharmexcil) director general Ravi Udaya Bhaskar said, urging the Indian embassy in Beijing to intervene. Notwithstanding reports that the airline was mulling a new plan to resume its cargo flights to the region, an industry official said the carrier’s services to India remained suspended for a few days now. Sichuan operated to 6 Indian cities and other industries too depend on its services.

In a letter to the Ambassador Vikram Misri, Mr. Bhaskar said there was a real risk of disruption to “frantic efforts” by the industry to import medical supplies, including oxygen concentrators, key starting materials (KSMs) and active pharmaceutical ingredients (APIs) at a time when the country was battling COVID.


11:00 AM

Rupee opens on flat note against US dollar

The rupee reflects the sentiment in stocks.

PTI reports: "The Indian rupee opened on a flat note and edged lower by 5 paise to 74.12 against the US dollar in opening trade on Friday, amid a lacklustre trend in the domestic equity market.

At the interbank forex market, the domestic unit opened at 74.03 against the US dollar and inched lower to 74.12 against the greenback, registering a fall of 5 paise over its previous close.

On Thursday, the rupee had settled at 74.07 against the American currency.

The domestic unit also touched an early high of 74 per dollar in initial deals.

The rupee started on a flat to weaker note against the greenback, Reliance Securities said in a research note, adding that "improved risk appetite in the markets could cap depreciation bias; however month-end dollar demand from importers could cap the appreciation bias." Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.02 per cent to 90.63.

"The US dollar Index struggled near the nine-week low this morning in Asian trade, continued to be weighed down by a dovish US Fed," the note added.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 369.13 points or 0.74 per cent lower at 49,396.81, and the broader NSE Nifty declined 68.30 points or 0.46 per cent to 14,826.60.

Brent crude futures, the global oil benchmark, fell 0.45 per cent to USD 68.25 per barrel.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 809.37 crore on Thursday, according to exchange data."

10:30 AM

Oil prices slip from six-week high as India demand worries weigh

A good month for oil despite demand concerns.

Reuters reports: "Oil prices slipped on Friday, taking a breather after touching their highest in six weeks as economic recovery and bullish summer fuel demand outlook outweighed concerns of wider lockdowns in India and Brazil to curb COVID-19 pandemic.

Brent crude fell 26 cents, or 0.4%, to $68.30 a barrel by 0041 GMT, the last day's trading for the front-month June contract. U.S. West Texas Intermediate crude for June was at $64.73 a barrel, down 28 cents, or 0.4%.

Brent is on track to rise roughly 8% in April while WTI could see gains of nearly 10%. The increases in April will be the fifth monthly gains in six months as global demand has almost returned to pre-pandemic levels on the back of fiscal stimulus while production cuts from OPEC and their allies including Russia eased crude oil oversupply.

Wider adoption of COVID-19 vaccinations is also restoring confidence in travel, lifting oil demand.

Several U.S. cities are emerging from lockdown stoking confidence of stronger demand in gasoline ahead of the key U.S. summer driving season, ANZ analysts said, while UK road fuel sales are nearing last summer's levels.

The upcoming Labour Day holiday in China would also boost fuel demand at the world's second largest oil consumer.

"This renewed optimism is overshadowing headwinds in India, where a second wave of infections of COVID-19 are resulting in new travel restrictions being put in place," ANZ said in a note.

The world's second most populous nation is in deep crisis, with hospitals and morgues overwhelmed, as the number of COVID-19 cases topped 18 million on Thursday.

On Friday, a private sector survey showed that Japan's factory activity expanded in April at the fastest pace since early 2018 on a global demand recovery though new coronavirus curbs cast a shadow over the overall economic outlook."

10:00 AM

Sensex tanks 400 points in early trade; Nifty slips below 14,800

Stocks have slipped this morning after consecutive days of gains.

PTI reports: "Market benchmark Sensex plunged over 400 points in early trade on Friday, tracking losses in index-heavyweights HDFC twins, ICICI Bank and Kotak Bank amid a negative trend in Asian equities.

The 30-share BSE index tumbled 424.70 points or 0.85 per cent to 49,341.24 in initial deals.

Similarly, the broader NSE Nifty declined 117.65 points or 0.79 per cent to 14,777.25.

HDFC Bank was the top loser in the Sensex pack, shedding around 3 per cent, followed by HDFC, ICICI Bank, Bajaj Finserv, Titan, Kotak Bank and SBI.

On the other hand, ONGC, Dr Reddy’s, Bajaj Auto, Sun Pharma and Infosys were the gainers.

In the previous session, Sensex finished 32.10 points or 0.06 per cent higher at 49,765.94, and Nifty advanced 30.35 points or 0.20 per cent to 14,894.90.

Foreign institutional investors (FIIs) were net buyers in the capital market as they purchased shares worth Rs 809.37 crore on Thursday, while domestic institutional investors (DIIs) sold shares worth Rs 942.35 crore, according to provisional exchange data.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, spiking COVID tells us that the light at the end of the tunnel, which the market is focussed on, is a long way away. But the market is taking cues from the second wave experience of other countries where the curve flattened and fell in around two months.

"This explains the resilience of the market in the midst of very negative COVID-related news. An important point to be understood is that global markets are highly correlated, and therefore, a major correction is likely to be global," he stated.

Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo were trading on a negative note in mid-session deals.

Bourses on Wall Street ended with gains in overnight sessions.

Meanwhile, international oil benchmark Brent crude was trading 0.44 per cent higher at USD 67.75 per barrel."

9:30 AM

‘Lockdowns have hit activity badly in April’

The spate of local lockdowns and restrictions have dented economic activity severely in April, SBI said in a report on Thursday. The bank’s research team now pegs the loss to the economy at ₹1.86 lakh crore, higher than the ₹1.5 lakh crore it had estimated last week.

“The SBI business activity index, which has been declining in April ’21 has now dipped to a new low of 75.7, the level it had attained in August 2020 and is now a clear 24.3% down from the pre-pandemic level,” the researchers said in the report.


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