The benchmark stock indices have opened the day on a positive note, hitting fresh record highs in the process.
Petrol and diesel prices continue to be hiked for the sixth straight day today.
Join us as we follow the top business news through the day.
Are low interest rates behind the stock market rally?
Indian shares end at record high on consumer goods boost
Another good day for stocks.
PTI reports: "Indian shares closed at a record high on Monday, with the Nifty rising for a fifth straight session as consumer goods giants Hindustan Unilever and ITC advanced, although losses in private sector lender HDFC Bank capped gains.
The NSE Nifty 50 index ended up 0.73% at 13,355.75, while the benchmark S&P BSE Sensex advanced 0.77% to 45,426.97. Both indexes have registered five consecutive weeks of gains amid news of progress in coronavirus vaccines.
In the latest development on the domestic front, Serum Institute of India, the world's largest producer of vaccines by volume and India's main hope for large-scale supplies, said it had made the first formal application for emergency use approval for AstraZeneca COVID-19 vaccine.
Daily virus cases in the world's second most populous country have stayed below 50,000 for a month, despite a busy festival season.
Among consumer goods stocks, Hindustan Unilever jumped 3.3%, while ITC rose 2.5%. Mortgage lender HDFC Ltd was up 2.6%.
ICICI Bank Ltd and smaller rival Bandhan Bank ltd climbed 1.7% and 4.5%, respectively, after Goldman Sachs added them to its “conviction list” of top stock picks and raised their target prices.
Goldman also upgraded the rating and target price on IndusInd Bank Ltd, sending its shares up 2.4%.
ONGC shares climbed 1.9% after the company said on Friday its overseas arm had made a “significant strike of oil” in its block in Colombia. (https://bityl.co/4ji9)
Capping the gains, HDFC Bank Ltd dropped 1% to its lowest close since mid-November. Credit ratings agency Moody's said the bank's multiple digital outages, which prompted the Reserve Bank of India on Thursday to curb its digital and credit card operations, were credit negative.
Smaller rival Kotak Mahindra Bank Ltd slid 1.4% after Goldman downgraded the stock to “neutral” from “buy”."
New e-bidding norms: Reliance, others don’t need govt nod for gas pricing
The Centre further liberalizes gas pricing norms.
PTI reports: "Reliance Industries and other producers of natural gas will no longer need the government approval for the gas price if it is arrived at using the new guidelines for the discovery of market price, an official order said.
The Ministry of Petroleum and Natural Gas last week notified guidelines for the discovery of market prices for domestically produced natural gas through e-bidding.
The government has since 2017 given pricing freedom for natural gas produced from all fields other than the old fields of state-owned ONGC and Oil India Ltd in nomination blocks.
Firms such as Reliance Industries-BP combine as well as ONGC (for non-nomination blocks) have been auctioning gas to users. They would typically devise a formula and seek bids from users.
They will continue to devise a pricing formula, but will now have to seek bids on the electronic-platform of five pre-selected agencies, the notification said.
The agencies are SBI Capital Markets Ltd, mjunction Services Ltd, RITES, MSTC and CRISIL Risk and Infrastructure Solution Ltd.
This follows the Union Cabinet in October allowing marketing freedom for blocks where pricing freedom already existed. Alongside, it approved standardised bidding for price discovery.
The companies “shall design the tender/ bid offer, including the eligibility criteria, bid parameters, evaluation criteria, tender fee, salient terms and conditions of Gas Sales Agreement and any other relevant information etc, with a view to encourage wider participation from prospective buyers, promote competition and maximise the value of natural gas offered,” it said.
ONGC and OIL are also to follow these guidelines for the discovery of the market price of natural gas produced from their fields wherever pricing and marketing freedom has been granted, the order said.
“The existing gas sales agreements, made in connection with contract provisions, would continue till the duration of the agreements/contracts and thereafter subsequent sale of gas shall be subject to these guidelines,” it added.
Reliance and its partner BP have sold initial 5 million standard cubic meters per day of gas from their second wave of discoveries in the KG-D6 block for five years.
ONGC too has sold initial gas from the neighbouring KG-D5 block.
The two will use the new guidelines whenever the existing contracts expire or they have additional quantities of gas to offer.
The order said the companies must ensure at least 21 days’ time for bidding.
They have to submit to the Directorate General of Hydrocarbons (DGH) details of the auction such as a list of participants, qualified bidders and selected bidders with their price and quantity allocated.
“The entire proceeding will be conducted by the contractor/producer without any need for the approval of the government,” the order said. “The government, however, will have the right to ask for information and intervene if there are reasons to believe that there is foul play.”
The companies have to invite bids from prospective buyers of natural gas through an e-bidding portal, it said.
“National oil companies, viz ONZC and OIL shall also follow the guidelines for the discovery of market price of natural gas produced from their nomination fields wherever pricing and marketing freedom has been granted,” it said.
While the price of gas produced from nomination fields is dictated by the government, ONGC and OIL have the freedom to sell gas from difficult fields such as deepsea."
Cybercrime could cost the world almost $1 trillion in 2020, McAfee says
Cybercrime incidents could cost the world nearly a trillion dollars in 2020, a 50% jump from around $600 billion in 2018.
The annual global cost of cybercrime this year is estimated to be around $945 billion, which is more than 1% of the global gross domestic product (GDP), according to a recent global report by McAfee titled ‘The Hidden Costs of Cybercrime’.
It also noted that global spending on cybersecurity is expected to exceed $145 billion this year.
Nearly two-thirds of the companies surveyed reported some form of cyber incident in 2019. The most common cyber frauds include economic espionage, intellectual property (IP) theft and ransomware attacks. IP theft and financial crime account for at least 75% of the total cyber losses and pose the greatest threat to companies, the cybersecurity firm noted.
Markets, transport sector to remain open on Tuesday: CAIT, AITWA
An update on the strike called for to support farmers protesting against the farm bill.
PTI reports: "Traders’ body CAIT and All India Transporters Welfare Association on Monday said markets across the country including in Delhi will remain open on Tuesday and the transport sector will function as usual, notwithstanding the “Bharat Bandh” call by protesting farmers.
Thousands of farmers protesting against the Centre’s new agri laws for the past 11 days here have called on people to join their “Bharat Bandh” or nation-wide shutdown call on Tuesday in large numbers.
Issuing a joint statement, the Confederation of All India Traders (CAIT) and All India Transporters Welfare Association (AITWA) said none of the farmer leaders or associations have approached them seeking support on the issue and therefore, traders and transporters are not participating in the “Bharat Bandh”."
Gold rises as soft U.S. jobs data bolsters stimulus bets
Some support for the yellow metal today.
Reuters reports: "Gold ticked higher on Monday, as the metal drew support from grim U.S. jobs data that fuelled optimism over a U.S. stimulus deal, although gains were capped by coronavirus vaccine rollouts. Spot gold prices rose 0.2% to $1,840.65 per ounce by 0725 GMT, while U.S. gold futures were up 0.2% at $1,843.90.
“Softer jobs growth and tighter social mobility restrictions ostensibly lower the hurdle for a policy response from (U.S.) Congress,” said Stephen Innes, chief global market strategist at financial services firm Axi. Data on Friday showed the U.S. economy added the fewest jobs in six months in November.
Talks over a fresh pandemic relief package gathered momentum on Friday, as bipartisan U.S. lawmakers worked to put the finishing touches on a new $908 billion bill. While the gold market might be disappointed with the size of the package, markets will likely take support from the bipartisan nature of the deal that suggests further compromise in the U.S Congress ahead, Innes said.
Gold is seen as a hedge against inflation that could result from large stimulus. Given increased inflation expectations, rising coronavirus cases, continued dollar weakness and a stalling U.S. labour market, gold could test $1,900 in December, said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India. However, gold's gains were capped as Britain prepared to become the first country to roll out the Pfizer/BioNTech COVID-19 vaccine this week.
Gold has resistance at $1,850 an ounce, with a close above that pivot level setting the scene for a test of the resistance line at $1,920 an ounce, Jeffrey Halley, a senior market analyst at OANDA, said in note. Silver fell 0.4% to $24.06 per ounce and platinum dropped 1.5% to $1,039.00, while palladium gained 0.8% to $2,363.00."
Petrol, diesel prices rise for sixth straight day
Petrol and diesel prices rose for the sixth day in a row on December 7 as rates went up by 26-30 paise per litre.
Petrol price was hiked by 30 paise per litre and diesel by 26 paise, according to a price notification of oil marketing companies.
Rates for petrol in Delhi rose to ₹83.71 per litre, from ₹83.41 while diesel price went up from ₹73.61 to ₹73.87 per litre.
This is the sixth straight day of price hike and the 15th increase in rates since November 20, when oil companies resumed daily price revision after nearly two-month hiatus.
Serum Institute applies for emergency use authorisation for COVID-19 vaccine
The vaccine manufacturer tries to tap into some huge latent demand in the country.
PTI reports: "Vaccine manufacturing major Serum Institute of India (SII) on Monday said it has applied to Drugs Controller General of India (DCGI) for emergency use authorisation for its COVID-19 vaccine Covishield.
The Pune-based company has collaborated with Oxford University and pharmaceutical company Astra Zeneca for making the vaccine and is conducting trials in India.
“As promised, before the end of 2020, @SerumInstIndia has applied for emergency use authorisation for the first made-in-India vaccine, Covishield,” SII CEO Adar Poonawala said in a tweet.
He further said: “This will save countless lives, and I thank the Government of India and Sri @narendramodi ji for their invaluable support.”
Last week, Pfizer India said it has applied to India’s drug regulator DCGI for emergency-use authorisation for its COVID-19 vaccine, after the company’s parent received clearance for the treatment from Britain and Bahrain."
Moody’s terms HDFC Bank’s multiple digital outages ‘credit negative’
The digital lapse is costing HDFC Bank.
PTI reports: "Global rating agency Moody’s on Monday said HDFC Bank’s multiple digital outages are credit negative as such recurring incidents could lead to moderation in revenue and flight of customers to other banks.
The recurring outages also risk hurting the bank’s brand perception among a growing and increasingly digitally savvy customer base, and increases the potential that clients switch to other banks, which would lead to a reduction in revenue and low-cost retail funding, Moody’s said in a statement.
Last week, banking sector regulator Reserve Bank of India (RBI) had asked the bank to temporarily stop all launches under its digital 2.0 initiative and stop sourcing new credit card customers.
The announcement came after the bank experienced multiple outages in its internet banking, mobile banking and payment utility services over the past two years.
“The regulators’ action is in response to weaknesses in HDFC Bank’s digital infrastructure and operational resilience and is credit negative because the bank is increasingly relying on digital channels to source and service its customers,” it said.
The rating firm does not expect the regulators’ action to materially affect the bank’s existing business and financial profile.
Nevertheless, it said, the RBI action will delay the launch of HDFC Bank’s Digital 2.0 initiative, under which the bank aims to consolidate all customers’ digital transactions, including payments, savings, investments, shopping, trade, insurance and advisory services, into one platform.
This has the potential to increase spending to improve the bank’s digital infrastructure, which would strain its profitability, it said.
HDFC Bank, the second-largest bank in India by deposits, leads in terms of digital transactions processed, it said, adding, about 95 per cent of the bank’s retail transactions were conducted digitally in the fiscal year that ended in March 2020, as against 85 per cent in fiscal 2018."
Economy to reach pre-COVID-levels by end of FY2022, says NITI Aayog
India’s economic growth is likely to reach pre-COVID-19 levels by the end of the 2021-22 fiscal as the GDP contraction in this financial year is expected to be less than 8%, NITI Aayog vice chairman Rajiv Kumar said on Sunday.
The Reserve Bank of India (RBI) has also revised its forecast of economic growth for the current fiscal year (2020-21) to (-)7.5% as against its earlier forecast of (-)9.5%.
“We should reach pre-COVID-19 levels at the end of fiscal year 2021-22 for sure,” Mr. Kumar told PTI when asked about growth projection for the next financial year. He added that the GDP contraction this fiscal is expected at less than 8%.
India’s economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5% and held out hopes for further improvement on better consumer demand.
Bank of Japan is now the biggest owner of Japanese stocks
Rupee rises 7 paise to 73.73 against US dollar in early trade
The rupee mirrored the opening gains in stocks.
PTI reports: "The rupee appreciated by 7 paise to 73.73 against the US dollar in the opening session on Monday on sustained foreign fund inflows and positive domestic equities.
At the interbank forex market, the domestic unit opened at 73.79 against the US dollar, then gained ground and touched 73.73 against the American currency, registering a rise of 7 paise over its previous close.
On Friday, the rupee had settled at 73.80 against US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.04 per cent to 90.73.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 58.77 points higher at 45,138.32, and the broader NSE Nifty rose 20.65 points to 13,279.20.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,969.59 crore on a net basis on Friday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.45 per cent to USD 49.03 per barrel."
FDI equity inflows into India cross $500 billion milestone
Foreign direct investment (FDI) equity inflows into India crossed the $ 500 billion milestone during April 2000 to September 2020 period, firmly establishing the country’s credentials as a safe and key investment destination in the world.
According to the data of the Department for Promotion of Industry and Internal Trade (DPIIT), the inflows during the period stood at $500.12 billion.
About 29 % of the FDI came through the Mauritius route. It was followed by Singapore (21 %), the U.S., the Netherlands, Japan (each 7 %), and the UK (6 %).
India received $144.71 billion from Mauritius and about $106 billion from Singapore during the period under review.
The other big investors have been from Germany, Cyprus, France and Cayman Islands.
Shares hit record highs as ICICI Bank climbs; HDFC Bank weighs
The bull run continues.
Reuters reports: "Indian shares touched record highs on Monday as private sector lender ICICI Bank hit a nine-month high, although losses in larger rival HDFC Bank weighed.
The NSE Nifty 50 index rose 0.18% to 13,282.85 by 0500 GMT, while the benchmark S&P BSE Sensex was up 0.15% at 45,145.82. Both indexes had registered five straight weeks of gains amid news of progress in coronavirus vaccines.
“There is really no negative news at the moment, and investors are maintaining the status quo. The expectation is that things will get better from a liquidity perspective,” said Umesh Mehta, head of research at Samco Securities in Mumbai.
“Unless something really negative happens, on the vaccine front, there should not be any major correction.”
ICICI Bank Ltd was the top boost to the main indexes, climbing 2.7% to its highest since March 4.
ONGC climbed 4.6% to its highest since early March after it said on Friday its overseas arm made a “significant strike of oil” in its block in Colombia. (https://bityl.co/4ji9)
Pfizer's Indian arm rose as much as 2.5% after a top government health adviser said the U.S. drugmaker had applied for emergency use authorisation of its COVID-19 vaccine in India.
HDFC Bank Ltd dropped 1.8% to its lowest since mid-November and was the biggest drag on the indexes.
Credit ratings agency Moody's said HDFC Bank's multiple digital outages, which prompted the Reserve Bank of India on Thursday to curb the lender's digital and credit card operations, were credit negative.
Meanwhile, Asian shares retreated from a record peak on Monday after a Reuters report the United States was preparing to impose sanctions on some Chinese officials highlighted geopolitical tensions."
November blues for gold
Precious metals took a knock in November with Comex gold witnessing its worst month in four years. The improvement in economic fundamentals across the globe, along with progress in COVID-19 vaccine development played a key role in pulling down the price of precious metals in November.
Comex gold closed 5.3% lower to settle at $1,780.9 an ounce. Comex silver lost 4.7% to settle at $22.53 an ounce.
In the domestic market, MCX gold futures lost 5.7% to close at ₹47,918 per 10 gm. MCX silver futures closed 3.6% lower to end at ₹60,222 a kg.
As anticipated, Comex gold ruled weak and dropped way below the target zone of $1,825-$1,840. As the target has been achieved, there is a possibility of a short-term bounce in price. A rise to $1,865-1,870 appears likely in the short-term.
