Today's top business news: Stocks rise, India's services sector slump eased in Sept despite job losses, Ken Rogoff on the stock market disconnect, and more

On the Sensex chart, IT major TCS rose the most, gaining over 7%. File

On the Sensex chart, IT major TCS rose the most, gaining over 7%. File

The benchmark stock indices have opened the day on a strong note with gains of close to 1% after yesterday's gains.

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

4:30 PM

Ken Rogoff on the stock market disconnect

 

4:00 PM

Sensex shoots up over 600 points; Nifty tops 11,650-level

A great day for the stock indices which managed to gain further ground after opening with gains.

PTI reports: "Domestic equities rallied for the fourth successive session on Tuesday on account of broad-based buying by participants amid positive global cues.

The BSE gauge Sensex zoomed 600.87 points or 1.54 per cent to close at 39,574.57. Intra-day, the index surged over 650 points to touch the session’s high of 39,623.76, before paring some gains.

Similarly, the NSE barometer Nifty climbed 159.05 points or 1.38 per cent to end at 11,662.40.

On the Sensex chart, index heavyweight HDFC rallied over 8 per cent. Other prominent gainers were IndusInd Bank, Mahindra and Mahindra, Asian Paints, Bajaj Finance, HDFC Bank and Ultratech Cement.

Among the laggards were Tata Steel, Nestle, Larsen & Toubro, Sun Pharma, NTPC and Reliance Industries.

Of the Sensex constituents, 24 ended in the green while six closed with losses.

Asian shares too continued their upward trend after US President Donald Trump was discharged from the hospital following COVID-19 treatment. Investor sentiment was also boosted by hopes of a fresh US stimulus package.

Foreign investors bought equities worth a net Rs 236.71 crore in the Indian markets on Monday, exchange data showed.

On the forex market front, the Indian rupee dropped by 17 paise to close at 73.46 per US dollar."

3:30 PM

China’s Didi Chuxing partners with WhatsApp for ride-hailing in Brazil

Brazilian ride-hailing service 99, controlled by China's Didi Chuxing Technology Co Ltd, has partnered with WhatsApp to accept orders on the chat platform owned by Facebook in a move that would allow users to summon cars without using another app.

The partnership is the first of its kind in the world for Didi, China's biggest ride-hailing company, the companies said, and could give 99 an advantage in competing with U.S.-based Uber Technologies Inc, the market leader in Brazil.

WhatsApp has 120 million active users in Brazil, which has a population of 210 million, making it the app’s second-largest market behind India. 99 has about 20 million customers registered with its app and more than 750 thousand active drivers across Brazil.

 

3:00 PM

World shares mixed on uncertainty over stimulus, Trump

An update on global stock bourses.

PTI reports: "Stocks wavered on Tuesday on uncertainty over prospects for fresh economic stimulus and over President Donald Trump’s return to the White House to complete his recovery from the coronavirus.

Trump left the hospital after spending less than three days there, returning from Walter Reed National Military Medical Centre to finish his treatment at home. His doctor, Navy Cmdr. Sean Conley, said the president remained contagious and would not be fully out of the woods for another week.

Signs of Trump’s improved condition boosted markets in Asia following an overnight rally on Wall Street. In Europe, sentiment was less upbeat. Germany’s DAX lost 0.3% to 12,784.82 and the CAC 40 in Paris slipped 0.4% to 4,853.12. Britain’s FTSE 100 gave up 0.7% to 5,904.11.

The future contract for the S&P 500 declined 0.3% and that for the Dow industrials edged 0.1% lower.

In Asian trading, Japan’s Nikkei 225 climbed 0.5% to 23,433.73 and the Hang Seng in Hong Kong jumped 0.9% to 23,980.65. South Korea’s Kospi added 0.3% to 2,365.90.

Australia’s S&P/ASX 200 rose 0.4% to 5,962.10 after the central bank kept its policies basically unchanged. Also on Tuesday, the government announced a big spending financial blueprint for the next few years that will drive business investment and job creation while repairing pandemic damage to the economy.

The annual budget contains a wage subsidy designed to get unemployed young Australians back to work and brings forward planned income tax cuts. The result will be record debt in the current fiscal year through next June.

India’s Sensex surged 0.9% and shares also rose in Taiwan and Southeast Asia.

Markets fell after Trump’s positive COVID test was reported Friday, tumbling on concerns that a White House victory for Democrat Joe Biden would mean higher taxes and tighter regulations for companies, which could drag down their profits.

Worries over flaring outbreaks of the coronavirus have raised the urgency of fresh stimulus but it’s unclear if the Democrats and Republicans will manage to reach an agreement.

Analysts said a Democratic sweep of the election would allay fears of prolonged conflict over its outcome. It could also raise the probability of a big government support plan for the economy, something that investors have been clamoring for since jobless benefits and other stimulus Congress approved in March expired.

House Speaker Nancy Pelosi told airline executives on Friday to stop the furloughs of tens of thousands of workers because aid for the industry was imminent, either as a stand-alone effort or as part of a wider rescue package.

A stand-alone bill for airlines failed to advance in the House on Friday, but hopes remain for a larger effort.

Expectations are undeniably rising that compromise will be reached. With the FOMO (fear of missing out) gnomes of Wall Street piling into everything, I dread to the see the correction if they don’t though,” Jeffrey Halley of Oanda said in a commentary.

The yield on the 10-year Treasury was steady at 0.76%.

US benchmark crude oil picked up 1 cent to $39.23 per barrel in electronic trading on the New York Mercantile Exchange. It surged $2.17 on Monday to $39.22 per barrel. Brent crude, the international standard, gained 5 cents to $41.35 per barrel.

In currency dealings, the US dollar weakened to 105.58 Japanese yen from 105.73 yen. The euro fell to $1.1772 from $1.1786."

2:30 PM

McDonald’s to resume dine-in operations in Maharashtra after six months

Westlife Development, which operates McDonald’s restaurants in the southern and western region in India, on Tuesday said it is re-starting the dine-in operations in Maharashtra after remaining shut for over six months due to COVID-19.

Last week, the Maharashtra government issued coronavirus-related Standard Operating Procedures (SOPs) for restaurants that are set to re-open from October 5 with 50% occupancy.

“After a six-month-long COVID-19 led lockdown on restaurants, Westlife Development, the company that owns and operates McDonald’s restaurants in west and south India, is all set to reopen its doors for customers in Maharashtra. The company has left no stone unturned to ensure a completely safe and hygienic experience for its employees and customers,” it said in a regulatory filing.

Saurabh Kalra, Chief Operating Officer, McDonald’s India (West and South), said the dine-in operations in the State are opening after more than six months and the company is committed to making the experience completely safe, hygienic and special for its customers.

 

2:00 PM

Uber launches employee commute services

Uber announced on Tuesday it has expanded its ‘Uber for Business’ product offering by launching two new services for helping businesses support their employees’ daily commute.

With Uber’s new commute specific options, organisations can create dedicated transport programmes for employees and clients, it said in a statement.

These are: ‘Employee Group Rides’ which will enable employees from the same organisation to book rides together to travel to work, and ‘Business Charter’where companies can reserve a dedicated fleet of vehicles provided by third party fleet partners for their employees and customers.

 

1:30 PM

MF industry assets base rise 12% to Rs 27.6 lakh cr in Sep qtr

The rising market is helping mutual funds attract more investors.

PTI reports: "Mutual fund industry’s asset base rose by 12 per cent to Rs 27.6 lakh crore during the September 2020 quarter, primarily on account of rebound in markets.

The average asset under management (AAUM) of the industry, comprising 45 players, was at Rs 24.63 lakh crore in April-June quarter this year, according to data by Association of Mutual Funds in India (Amfi).

All top 10 fund houses -- SBI MF, HDFC MF, ICICI Prudential MF, Aditya Birla Sunlife MF, Nippon India MF, Kotak MF, Axis MF, UTI MF, IDFC MF and DSP MF -- witnessed an increase in their respective average AUMs during the September quarter.

Notably, Axis MF, UTI MF, SBI MF and Kotak MF have witnessed an increase in the range of 14-16 per cent in their assets base beating the average industry’s growth of 12 per cent.

According to Vidya Bala, co-founder of Primeinvestor.in, market rebound caused the growth in the industry’s AUM on a quarter-on quarter basis.

“Otherwise steady outflows from equity funds is a sign of lack of confidence in funds by retail investors. The uncertainty caused by COVID-19 has also prompted investors to redeem and keep assets in cash,” she added.

Omkeshwar Singh, Head RankMF at Samco Securities, said the AAUM of September quarter is higher compared to June quarter majorly due to appreciation in value of existing holding in equity oriented funds -- rise on the equity markets.

“In the debt side, there has been incremental inflows of nearly Rs 1 lakh crore and mostly in July 2020,” he added.

SBI Mutual Fund, which continues to be the largest fund house in the country, saw its asset base growing 15.6 per cent to Rs 4,21,364 crore. It had an average AUM of Rs 3,64,363 crore in the preceding quarter.

HDFC MF saw its asset base rising by 5.4 per cent to Rs 3,75,516 crore during the period under review, from Rs 3,56,183 crore in the June quarter.

ICICI Prudential MF posted an average AUM of Rs 3,60,049 crore in September quarter, against Rs 3,26,291 crore in June quarter, indicating an increase of 10.3 per cent.

Aditya Birla Sunlife MF and Nippon India MF have seen their average AUM growing by 11 per cent each to Rs 2,38,674 crore and a little over Rs 2 lakh crore respectively.

Kotak MF’ average AUM spiked by 14.5 per cent to Rs 1,91,598 crore in three months ended September 30 from Rs 1,67,326 crore in the preceding quarter.

The asset base of Axis MF climbed by 16.3 per cent to Rs 1,56,255 crore in September quarter while that of UTI MF accelerated by 16.1 per cent to Rs 1,55,190 crore.

UTI MF, which has recently concluded its initial public offering, had an AAUM of Rs 1,33,631 crore in the June quarter.

The average AAUM of IDFC MF and DSP MF went up by 12.3 per cent and 12 per cent to Rs 1,14,335 crore and Rs 82,286 crore respectively.

In the June quarter, the industry had registered an 8 per cent decline in AUM on account of outflow pressure both in debt and equity."

1:00 PM

Reserve Bank of India to hold policy meeting from Oct. 7 to Oct. 9

The next meeting of the MPC begins tomorrow as businesses and the govt vie for more rate cuts.

Reuters reports: "The Reserve Bank of India will hold a monetary policy committee meeting from Wednesday through Friday, it said in a release on Tuesday.

The RBI had to reschedule the meeting from Sept. 29 to Oct. 1 as the government had not appointed three new external members on the committee.

The Indian government named Shashanka Bhide, Ashima Goyal and Jayanth Varma as its nominees monetary policy committee late on Monday.

The RBI is expected to keep key rates unchanged at its policy review, but may for the first time since February provide guidance on how the economy is performing amid the coronavirus pandemic."

12:30 PM

‘Road transport revenue may shrink 18-20% in FY21’

The Indian road freight transportation sector is expected to see revenue contraction of 18-20% in FY21 due to the adverse impact of lockdowns, ICRA Ratings has said.

ICRA has maintained its negative outlook for this sector due to expectations of continued pressures on the credit profile of road transportation companies. The rating agency said over the medium term, the sector would witness some consolidation trends, given the rising pressure on viability of small fleet operators.

“The aggregate revenues of ICRA’s sample of logistics companies contracted sharply by 35% during the quarter,” Shamsher Dewan, vice-president, ICRA Ratings, said. “The impact was more visible on players operating on an asset-heavy model, due to high fixed costs for owned assets, while asset-light players fared relatively better,” he added.

 

12:00 PM

India's services sector slump eased in Sept, but job losses balloon

More evidence of a K-shaped recovery?

Reuters reports: "The plunge in India's services sector activity eased considerably in September after the government lifted some coronavirus restrictions, but demand continued to contract, prompting firms to cut more jobs, a private business survey showed on Tuesday.

Signs of stabilisation in services are likely to provide more comfort to policymakers after a sister survey on Thursday showed India's manufacturing expanded at its fastest pace in over eight years, suggesting business conditions were gradually returning to normal in Asia's third-largest economy.

The Nikkei/IHS Markit Services Purchasing Managers' Index bounced to 49.8 in September from August's 41.8, a touch below the 50 mark that separates expansion from contraction on a monthly basis.

But September was the seventh straight month that activity had contracted, the longest such stretch since a 10-month run to early 2014.

“The relaxation of lockdown rules in India helped the service sector move towards a recovery in September. Participants of the PMI survey signalled broadly stable business activity and a much softer decline in new work intakes,” Pollyanna De Lima, economics associate director at IHS Markit, said in a release.

But the root cause of chronic business disruption shows no sign of abating as the coronavirus death toll in the world's second-most populous country rose past 100,000, only the third country in the world to reach that bleak milestone, after the United States and Brazil.

The services sector accounts for around 55% of India's economy and nearly a third of its jobs.

Even if restrictions are eased further, the economy is unlikely to return to pre-COVID-19 levels in the coming year as people remain cautious about discretionary spending and millions more are pushed into poverty.

Although improved from August, sub-indexes tracking domestic and foreign demand remained firmly in contraction territory, leading firms to reduce their workforce for the seventh straight month, the longest streak on record.

Weak demand also forced firms to absorb much of a jump in input costs, which increased at the quickest pace since February.

After giving a neutral outlook in August, services firms were optimistic for the first time since April about the year ahead, largely on hopes that a vaccine for COVID-19 would be rolled out.

However, the World Health Organization does not expect widespread COVID-19 vaccinations until mid-2021 and it would likely take years to vaccinate India's 1.3 billion people.

A composite index, which measures both services and factory activity, returned to growth for the first time in six months, rising to 54.6 last month from August's 46.0."

11:30 AM

PNB to add 4,000 jobs, open 500 branches in FY21, says Rao

Public sector lender Punjab National Bank (PNB), which has set its sights on the South and West for expansion, will open about 500 branches and add about 4,000 jobs during the current fiscal, said its MD and CEO Ch. S.S. Mallikarjuna Rao.

“We have completed the business and human integration of United Bank of India and Oriental Bank of Commerce with the PNB,” said Mr. Rao. “IT migration will happen by December and February 2021 respectively,” he added.

The bank, which currently operates 11,000 branches predominantly in the North and East, plans to expand in the South and West. Initially, the bank plans to open about 500 branches during FY21.

“The merger will lead to high incidence of rationalisation of branches,” Mr. Rao said. “If there are two branches within 500 metres, we will club them together and then use the licence to open a new branch in the South or in the West. That way, we hope to open 500 branches and will be writing to the RBI.”

 

11:00 AM

ETFs outnumber stocks

 

10:40 AM

Rupee rises 14 paise to 73.15 against US dollar in early trade

The opening gain in stocks has brushed off on the rupee.

PTI reports: "The rupee strengthened by 14 paise to 73.15 against the US dollar in opening trade on Tuesday, helped by positive domestic equities and weak American currency.

At the interbank forex market, the domestic unit opened at 73.17 and gained further ground to touch 73.15, registering a rise of 14 paise over its previous close.

On Monday, the rupee had depreciated by 16 paise to close at 73.29 against the US dollar.

“Anticipation of US President Trump recovering from COVID and of Democrats and Republicans reaching a consensus on a fiscal stimulus package seems to be buoying risk sentiment,” said Abhishek Goenka, Founder and CEO, IFA Global.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.13 per cent down at 93.39.

On the domestic equity market front, the BSE benchmark Sensex was trading 358.66 points higher at 39,332.36, and the broader NSE Nifty rose 97.30 points to 11,600.65.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 236.71 crore on Monday, according to exchange data.

Brent crude futures, the global oil benchmark, rose 0.65 per cent to USD 41.56 per barrel."

10:20 AM

Housing Ministry inks MoU with Swiggy to bring street vendors online

The Ministry of Housing and Urban Affairs on Monday said it had entered into an MoU with Swiggy to on board street food vendors on its online food-delivery platform, aimed at giving these vendors access to more consumers.

Initially, MoHUA and Swiggy will run a pilot programme by on boarding 250 vendors across five cities – Ahmedabad, Chennai, Delhi, Indore and Varanasi. The street vendors will be assisted in getting PAN and FSSAI registration, trained in app usage, menu digitisation, pricing, hygiene and packaging best practices, the ministry said.

Once the pilot is successfully completed, the initiative, a part of Prime Minister Street Vendor’s Atmanirbhar Nidhi (PM SVANidhi) scheme, will be expanded across the country in phases.

“During the ongoing COVID-19 pandemic, where physical distancing is the key to check its spread, this novel initiative aims to radically transform the business of street vendors across cities, by facilitating them to receive orders and serve customers using online mode of business,” the statement added.

 

10:00 AM

Sensex vaults over 360 points in opening trade on wide-spread buying

A good start to the day for stocks after yesterday's impressive gains.

PTI reports: "Equity benchmarks Sensex and Nifty piled on gains in opening session on Tuesday as investors indulged in wide-spread buying taking cues from positive global sentiment.

The BSE gauge Sensex surged 366.76 points or 0.94 per cent to 39,340.46 in early trade, and the NSE barometer Nifty jumped 92.35 points or 0.80 per cent to 11,595.70.

On the Sensex chart, index heavyweight HDFC led the rally with nearly 5 per cent gains, followed by Asian Paints, IndusInd Bank, HDFC Bank, Mahindra and Mahindra and State Bank of India.

All 30 Sensex constituents were trading in the green.

On Monday, the Sensex had settled at 38,973.70, up 276.65 points or 0.71 per cent; while the Nifty had closed at 11,503.35, higher by 86.40 points or 0.76 per cent.

Exchange data showed that foreign investors bought equities worth Rs 236.71 crore in Indian market on Monday.

On Tuesday, Asian markets too continued their upward movement as investor sentiment further improved after US President Donald Trump was discharged from hospital following COVID-19 treatment. Further, hopes of a fresh US stimulus package also buoyed investor sentiment."

 

9:30 AM

SpiceJet to start non-stop London flights

Low-cost carrier SpiceJet announced non-stop flights to London from Mumbai and Delhi with effect from December 4, making it the first long-haul destination for the airline.

SpiceJet is the second Indian carrier after Vistara to start operations on the India-U.K. route during COVID-19. The airlines decided to start London operations after the pact between India and the U.K. allowing their airlines to operate limited, non-stop flights. eliminating competition from many other international carriers that operate flights via their hubs such as in West Asia.

The airline will operate thrice-a-week to London, which will include twice-a-week flights from Delhi and once-a-week from Mumbai. SpiceJet will use an Airbus A330-900 Neo aircraft for these flights. The 371-seater twin-aisle A330 has a configuration of 353 economy and 18 business class seats. The aircraft is wet leased by the airline. The low-cost airline will offer business and economy class seats on these flights.

 


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Printable version | Aug 12, 2022 6:52:00 am | https://www.thehindu.com/business/businesslive-6-october-2020/article32779336.ece