The benchmark stock indices opened the day on a positive note but soon pare gains despite the gains in the US indices overnight.
The forex and money markets are closed today on the occasion of Id-E-Milad.
Join us as we follow the top business news through the day.
Bitcoin goes mainstream
Sensex ends 136 points lower; Nifty slips below 11,650
Yet another poor day for stocks comes to an end.
PTI reports: "Equity benchmark Sensex declined 136 points on Friday following losses in Infosys, ICICI Bank and Bharti Airtel amid a selloff in global markets.
After gyrating 746 points during the day, the 30-share BSE index ended 135.78 points or 0.34 per cent lower at 39,614.07.
Similarly, the broader NSE Nifty slipped 28.40 points or 0.24 per cent to 11,642.40.
Bharti Airtel was the top loser in the Sensex pack, shedding around 4 per cent, followed by Maruti, Bajaj Finance, HUL, ICICI Bank and Kotak Bank.
On the other hand, Tata Steel, NTPC, Sun Pharma, Nestle India, Reliance Industries and TCS were among the gainers.
Market was highly volatile during the day, said S Ranganathan, Head of Research at LKP Securities, adding that auto stocks witnessed profit booking.
However, a late comeback by RIL ahead of its earnings helped indices gain some lost ground in afternoon trade, he said.
According to experts, market mood has been wary this week on a steady increase in COVID-19 caseload globally despite falling cases in India and uncertainty around the upcoming US elections.
Bourses in Shanghai, Hong Kong, Seoul and Tokyo ended the day in significant losses.
Stock exchanges in Europe were also largely trading on a negative note.
Meanwhile, international oil benchmark Brent crude was trading 0.58 per cent higher at USD 38.48 per barrel."
India to pursue self reliance; will remain open for investors : Rajiv Kumar
Some clues offered on what is likely to drive the Centre's economic policies.
PTI reports: "India will pursue self reliance and give domestic entrepreneurs the best possible environment to go forward while ensuring that the country remains open for investors, Niti Aayog Vice Chairman Rajiv Kumar said on Friday.
Kumar while addressing a virtual event organised by industry body FICCI further said India is committed to the global economy and opening trade order.
“We will pursue self reliance, we will give our domestic entrepreneurs the best possible environment to go forward. We will, while attracting FDI, also repose our faith and trust in those who have already invested in India,” he said.
Kumar also noted that the government will give more space to private entrepreneurs, because without them whether domestic or foreign, India will not be able to achieve the kind of sustainable growth that the country wants.
“Yes, we will do all of this, as all other nations have done. But it will be done in the global context. It will be done in India, remaining open.
“It will be done with India trying to regain its share in global and regional production chains, it will be done with the respect to multilateral trading orders, and rule bound orders” he emphasised. Kumar also pointed out that if any support to domestic industry will be given by the government through tariffs then it would have an in-built sunset clause.
“And it will not imply in any sense, any form of isolation or protectionism,” he said.
Kumar also pointed out that the government has introduced production linked incentive (PLI) schemes for 9-10 sectors and in case of 4 sectors, government decisions have already been taken. “The objective of PLI schemes is to incentivise investors in this country to put up globally comparable capacity in scale and in competitiveness,” he said.
Noting that the government has taken COVID-19 pandemic as an opportunity Kumar said,”we have rationalised the labour laws, we have liberated our farmers, we have liberalised the FDI scheme.”
He stressed on the need to increase the share of trade in India’s GDP.
“We need to increase spending on health, education,” Kumar said adding human resources, health and welfare will be the centre of India’s growth strategy.
He also said the government is pushing electric mobility in a strong way."
'Interest on interest' waiver: What you need to know
Ahead of the festival season, the Finance Ministry announced waiver of interest on interest for loans up to ₹2 crore. The move comes in the backdrop of Supreme Court’s direction to implement the interest waiver scheme, which is likely to cost the exchequer ₹6,500 crore.
The apex court on October 14 directed the Centre to implement “as soon as possible” interest waiver on loans of up to ₹2 crore under the RBI moratorium scheme in view of the COVID-19 pandemic saying the common man’s Deepavali is in the government’s hands.
What is “interest on interest” waiver?
Borrowers who take loans from any financial institutions are charged compounded interest. As a relief for people affected by COVID-19 induced lockdown, the Central government and RBI gave a loan moratorium for a period of six months — from March 1 to August 31, 2020. The borrowers, who availed of the moratorium, would have to pay interest during this period, which would be added to the total loan amount. Following the Supreme Court’s direction, the government came up with a scheme in a bid to provide relief to small borrowers.
As per the scheme, the difference between the compound interest and simple interest will be reimbursed to the eligible borrowers, irrespective of whether he/she availed of the moratorium or not.
Gold ETFs log Rs 2,400-cr inflow in Sept quarter
Economic uncertainty is making gold ETFs attractive to investors.
PTI reports: "Gold exchange-traded funds (ETFs) saw staggering net inflows of over Rs 2,400 crore in the three months ended September 30, as investors continued to hedge their exposure to riskier assets due to higher economic uncertainty resulting from COVID-19.
In comparison, investors had infused Rs 172 crore in this asset class in July-September 2019, according to the data available with the Association of Mutual Funds in India (Amfi).
The category has been among the better-performing ones so far this year and received a net inflow of Rs 5,957 crore.
As per the data, a net sum of Rs 2,426 crore was pumped into gold-linked ETFs in three months ended September 30, 2020.
Divam Sharma, co-founder at Green Portfolio, said returns generated by gold ETF’s over the last one year have increased number of investors buying the asset.
“Gold investment picked up due to higher economic uncertainty resulting from COVID-19,” said Harsh Jain, co-founder of Groww.
Investors expected to see very volatile markets world over, and in such times, investment in very safe assets like gold always shoots up. Even though now, the markets have mostly recovered and reached the pre-pandemic levels, uncertainty remains high going forward, Jain said.
“We have seen a re-emergence of higher COVID-19 cases in many parts of Europe and USA. Many countries are imposing lockdowns in a staged manner again. This is leading to a higher economic uncertainty again. In such conditions, higher investment in gold assets is expected,” he added.
Gopal Kavalireddi, head of research at FYERS, said the US presidential elections outcome will have a bearing on the performance of equities over the next couple of months. This could prompt investors to reverse their choice and hedge their investments with gold ETFs.
Month-wise, investors put in a net Rs 202 crore in January, Rs 1,483 crore in February, but withdrew Rs 195 crore in March on profit-booking.
Inflows resumed in April at Rs 731 crore, followed by Rs 815 crore in May, Rs 494 crore in June, Rs 921 crore in July, Rs 908 crore in August and Rs 597 crore in September.
Despite the slight fall in inflows of gold ETF in September, Sharma said the outlook for the remaining part of the year looks positive.
“With the COVID-19 cases rebounding globally; continued liquidity and lower interest rates from central banks globally; and markets nearing the pre-COVID-19 levels, investors will continue to invest surplus liquidity in safer assets like gold,” he added.
He, further, said investors looking to invest in gold can choose between gold ETF, gold mutual funds, sovereign gold bonds, and physical gold.
The inflows led assets under management (AUM) of gold funds surging to Rs 13,590 crore at the end of September 2020, from Rs 5,613 crore at the end of September 2019.
Gold-backed ETFs are passive investment instruments that are based on price movements and investments in physical gold."
Biocon ranked among top five biotech employers globally in ‘Science Careers Top 20 Employers’ list
Biocon Ltd, the Bengaluru-headquartered bio-pharmaceuticals company, has been ranked among the Top 5 Global Biotech Employers for 2020 on the US-based Science magazine’s annual ‘Science Careers Top 20 Employers’ list, a statement from Biocon said.
With this ranking, Biocon has moved up from No. 7 in 2018 and No. 6 in 2019 and to 5th position this year, ahead of global pharma companies such as Novo Nordisk, Roche, Eli Lilly,Abbott, Novartis, Pfizer etc.
The company has consistently among the top global employers for eight consecutive years, since its debut on the list in 2012.
According to the Top Employers Survey of approximately 7,600 respondents from across the world this year, Biocon’s ranking was based on three key attributes: ‘innovative leader in the industry’, ‘is socially responsible’ and ‘has loyal employees’, the statement added.
Apple sees record Sept qtr in India
A surprisingly good quarter for Apple in India.
PTI reports: "Tech giant Apple has posted a record September quarter revenue of USD 64.7 billion, with strong performance across markets including India.
“Geographically, we set September quarter records in the Americas, Europe and Rest of Asia Pacific. We also set a September quarter record in India, thanks in part to a very strong reception to this quarter’s launch of our online store in the country,” Apple CEO Tim Cook said in an earnings call.
In September, Apple launched its first online store in India - a market that is dominated by Android smartphones.
Apple, which competes in the premium smartphone segment in India with players like Samsung and OnePlus, has been aggressively ramping up its presence in the Indian market.
The US-based company, in collaboration with partners like Wistron and Foxconn, had recently started assembling iPhone 11 in India.
According to research firm Canalys, the tech giant’s renewed focus on India paid off with a double-digit growth to nearly 8,00,000 units in the region during the July-September 2020 quarter.
A Counterpoint report had noted that Apple led the premium segment (over Rs 30,000) surpassing OnePlus even before its flagship launch, driven by strong demand for its iPhone SE 2020 and the iPhone 11. Its latest offering, iPhone 12 will further strengthen its position in the December quarter, it had noted.
India’s smartphone shipments in the premium segment (priced above Rs 30,000) was one of the least affected segments and reached its highest-ever share in the overall India smartphone market, contributing more than 4 per cent in total smartphone shipments, as per Counterpoint.
Apple, in its statement, said international sales accounted for 59 per cent of the revenue (USD 64.7 billion) for the fourth quarter ended September 26, 2020.
“Despite the ongoing impacts of COVID-19, Apple is in the midst of our most prolific product introduction period ever, and the early response to all our new products, led by our first 5G-enabled iPhone lineup, has been tremendously positive,” Cook said in the statement.
He added that Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and Services.
“We also achieved new September quarter records in the vast majority of countries that we track, including among others the US, Canada Brazil, Germany, France, Italy, Spain, Turkey, Russia, India, Korea, Thailand, Malaysia and Vietnam, Apple CFO Luca Maestri said on the investor call.
Apple’s products revenue was at USD 50.1 billion, while services set an all-time record of USD 14.5 billion."
Online education startup Udemy in talks to raise $100 million in funding: sources
Online learning platform Udemy is in advanced talks to raise around $100 million in a new private funding round that will value the online learning platform at over $3 billion, according to people familiar with the matter.
San Francisco-based Udemy has seen a boost in subscriptions this year as more people have stayed at home and opted for online learning due to the COVID-19 pandemic.
The fresh capital would follow the $50 million Udemy raised in a Series E round from Japanese publisher Benesse Holdings at a valuation of $2 billion in February.
Edtech companies have seen faster and wider adoptions as more people switch to remote learning due to restrictions during the pandemic. Private funding in the sector has surpassed 2019 levels, with over $4.8 billion raised by August 2020, according to CB Insights.
Vodafone Idea shares jump over 7% after Q2 earnings
Signs of recovery at the troubled telecom firm has enthused investors.
PTI reports: "Shares of Vodafone Idea on Friday gained over 7 per cent after the company reported significant narrowing of losses to about Rs 7,218 crore for the September quarter, and said signs of recovery were visible with gradual improvement in economic activities.
The stock rose by 6.44 per cent to Rs 8.92 on the BSE.
On the NSE, it jumped 7.18 per cent to Rs 8.95.
The company’s losses in Q2 FY20 had been at a staggering Rs 50,921.9 crore after it provisioned for Supreme Court mandated statutory dues.
The gross revenue for the quarter ended September 30, 2020, came in at about Rs 10,791 crore, marginally lower than the same period of the previous year.
The revenue was, however, 1.2 per cent higher when compared sequentially, and the company noted that the impact of the nationwide COVID-19 lockdown has gradually started to ease.
Realisation measured in average revenue per user (ARPU) -- a key metric for telecom firms -- improved to Rs 119 in Q2 FY21 from Rs 114 in the June quarter.
Its Q2 loss at Rs 7,218.2 crore was lower even on a quarter-on-quarter basis.
The results came after market hours on Thursday."
Interest-on-interest waiver: Crop, tractor loans not part of ex-gratia relief scheme
An important clarification coming from the Finance Ministry.
PTI reports: "Agriculture and allied activity loans are not eligible for the interest on interest waiver announced by the government last week, the finance ministry has clarified.
Issuing additional frequently asked questions (FAQs) on the ‘scheme for grant of ex-gratia payment of difference between compound interest and simple interest’, it said credit card dues outstanding as on February 29 would be considered for giving relief to the borrowers.
The benchmark rate applicable for such relief would be the contract rate, which is used by the credit card issuers for the purpose of EMI loans, it added.
Crop and tractor loans come under agriculture and allied activities loans and are not part of the eight segments or classes eligible under the scheme, it added.
The relief shall cover the following segments -- MSME loans, education loans, housing loans, consumer durable loans, credit card dues, automobile loans, personal loans to professionals and consumption loans, according to the FAQs released by the ministry earlier on Wednesday.
The Reserve Bank had on Tuesday asked all lending institutions, including non-banking financial companies, to ensure that the scheme of waiver of interest on interest for loans up to Rs 2 crore for the six-month moratorium period is implemented by November 5, as decided by the government.
Last Friday, the government had announced the scheme for grant of ex-gratia payment of difference between compound interest and simple interest for six months to borrowers in specified loan accounts.
Loan accounts with sanctioned limits and outstanding not exceeding Rs 2 crore (aggregate of all facilities with all the lending institutions) will be eligible and such accounts should be standard in the books of the lending institutions as on cut off date of February 29, 2020.
The period reckoned for refund shall be from March 1 to August 21, 2020, that is six months period or 184 days, it said.
The ex-gratia relief will be credited to the account of all eligible borrowers without any requirement to apply, it said.
As per the scheme, the lending institutions shall credit the difference between compound interest and simple interest with regard to the eligible borrowers in respective accounts for the said period irrespective of whether the borrower fully or partially availed the moratorium on repayment of loan announced by the RBI on March 27, 2020.
The scheme is also applicable on those who have not availed the moratorium scheme and continued with the repayment of loans.
The scheme, which was announced as per the direction of the Supreme Court, is likely to cost the exchequer Rs 6,500 crore."
Volatility of volatility spikes
Apple’s late iPhone launch temporarily wiped $100 billion off its stock value
The late launch of new 5G phones caused Apple Inc's customers to put off buying new devices, leading the company on Thursday to report the steepest quarterly drop in iPhone sales in two years.
Apple fell over 5% at one point in after-hours trade, wiping $100 billion from its stock market value.
Since 2013, Apple has delivered new iPhones each September like clockwork. But pandemic-induced delays pushed the announcement back a month, with some devices still yet to ship.
Even as booming sales of Macs and AirPods boosted overall revenue and profit above what analysts had expected, iPhone sales dropped 20.7% to $26.4 billion.
Vodafone Idea Q2 loss narrows to ₹7,218 crore
Debt-ridden telecom firm Vodafone Idea on October 30 reported the narrowing of its consolidated loss to ₹7,218.2 crore for the quarter that ended September 2020.
The company had posted a loss of ₹50,897.9 crore in the same quarter of the previous fiscal on account of making provisions for statutory due payments .
Total income declined by about 3% to ₹10,830.5 crore during the reported quarter, from ₹11,146.4 crore in the corresponding period of 2019-20.
Vodafone Idea MD and CEO Ravinder Takkar said while challenges related to COVID-19 continue, the second quarter has shown signs of recovery with a gradual improvement in economic activities.
“We are executing on our strategy and our cost optimisation exercise has already started to yield incremental savings. We have also initiated a fund raising exercise to support our strategic intent. Further, we continue to interact with the government seeking long term solutions to the critical challenges, which the industry faces,” Mr. Takkar said.
Shares rise as IOC, Reliance gain ahead of earnings
Shares opened the day with gains this morning after yesterday's losses.
Reuters reports: "Indian shares rose on Friday as heavyweight stocks Indian Oil Corp and Reliance Industries gained on expectations of strong earnings, with the real estate sector also supporting the market.
The NSE Nifty 50 index advanced 0.52% to 11,732.25 by 0500 GMT, while the S&P BSE Sensex was up 0.43% at 39,919.34.
The indexes were on track for their best monthly performance since July, but were set to finish the week lower on worries over the pace of global economic recovery as major European nations impose fresh lockdowns to combat surging coronavirus cases.
Refiner Indian Oil Corp advanced nearly 4% on Friday and oil-to-telecoms conglomerate Reliance Industries rose 1.14% ahead of quarterly results due later in the day, with smaller rival Bharat Petroleum Corp's (BPCL) strong earnings on Thursday lifting sentiment.
“The expectation is that the oil companies will maintain their overall refining margins, because the demand was sound during the quarter,” said Ajit Mishra, vice president of research at Religare Broking Ltd in Mumbai.
“Oil marketing companies were also under pressure for a while and there is a rebound being seen in those stocks.”
BPCL shares firmed 3% after it reported a higher quarterly profit and the company's executives said it would exceed their capital expenditure target for the full year.
Real estate developer Godrej Properties gained as much as 4.9%, helping the Nifty realty index rise 2.5%.
Brokerage Jefferies said in a note on Thursday property registrations in the country's financial hub Mumbai and the capital New Delhi were at 12- and 22-month highs, respectively, and maintained its optimistic outlook for the sector.
The Nifty metals index and the Nifty IT index advanced 1.8% and 1.3%, respectively.
India's top carmaker, Maruti Suzuki, fell 1.6% after its quarterly profit missed estimates on Thursday."
Centre relaxes Air India sale terms yet again
The Centre on Thursday revised bidding parameters for 100% stake sale in Air India, allowing private players to quote an enterprise value (EV) for the airline.
Before taking the decision, the government also contemplated on shutting down the airline due to failure in attracting buyers for the disinvestment process, which was first undertaken in 2018.
This is the government’s third effort to woo buyers. After tasting defeat in 2018, in January this year, the government floated a second proposal to sell the airline, offering to exit the airline completely and waive nearly half the debt — ₹29,000 crore of the total ₹60,000 crore debt. It had offered its entire stake in Air India, its low-cost international arm Air India Express, and ground handling arm AISATS.
“There has been a total change in the aviation environment and a large number of airlines are struggling,” Secretary of Ministry of Civil Aviation P.S. Kharola said at a press conference.
