The Sensex and the Nifty opened the day on a positive note with strong gains of nearly 1%.
Join us as we follow the top business news through the day.
The US Capitol attack trade
Sensex rallies 689 points to end at fresh high; Nifty tops 14,350
Yet another fresh high for stocks.
PTI reports: "Equity benchmark Sensex soared 689 points to end at a fresh all-time high on Friday, led by Infosys, TCS and Reliance amid strong buying sentiment in global equities.
The 30-share BSE index closed 689.19 points or 1.43 per cent higher at 48,782.51. It touched an intra-day record of 48,854.34.
Similarly, the broader NSE Nifty rallied 209.90 points or 1.48 per cent to close at its record high of 14,347.25. During the day, the index scaled a life-time peak of 14,367.30.
Maruti was the top gainer in the Sensex pack, rising around 6 per cent, followed by Tech Mahindra, Infosys, UltraTech Cement, PowerGrid and NTPC.
On the other hand, IndusInd Bank, Bharti Airtel, SBI, ITC and HDFC were the laggards.
According to Binod Modi, Head-Strategy at Reliance Securities, growing expectations of stronger fiscal stimulus in the US after Congress confirmed President-elect Joe Biden's victory have fuelled equities rally globally.
"Markets completely downplayed earlier concerns of reversal of lower tax rates in the scenario of Democrats taking control of both the houses of Congress," he added.
A sustained rebound in key economic data for December 2020 and likely commencement of vaccination drive shortly in India augur well for domestic equities, he said, adding that the underlying strength of domestic equities is intact, which essentially can propel benchmark indices to witness fresh highs in coming weeks.
"FPIs are unlikely to turn net sellers barring select weeks of days considering the status of global economy, stance of global central bankers and weak dollar," he stated.
Elsewhere in Asia, bourses in Hong Kong, Tokyo and Seoul ended with significant gains, while Shanghai was in the red.
Stock exchanges in Europe were also trading on a positive note in early deals.
Meanwhile, the global oil benchmark Brent crude was trading 0.59 per cent higher at USD 54.70 per barrel."
Indian economy to rebound with 8.9% growth in FY22
A low base could help the Indian economy next year.
PTI reports: "Indian economy is likely to rebound with an 8.9 per cent growth in the fiscal year beginning April 2021 after economic activity showed significant improvement in the last quarter, IHS Markit said on Friday.
The National Statistical Organisation (NSO) on Thursday predicted that the economy will contract 7.7 per cent in the current financial year ending in March, the worst performance in four decades.
"The Indian economy suffered a severe recession in 2020," IHS Markit said in a note. "The worst contraction occurred during the period from March until August, with the economy having shown a strong rebound in economic activity since September." The GDP contracted by a record 23.9 per cent in the April-June quarter following a national lockdown to prevent the spread of the coronavirus. The contraction came down to 7.5 per cent in the September quarter.
"During the fourth quarter of 2020, India's industrial production and consumption expenditure have shown a rebound.
"October data showed that industrial production grew by 3.6 per cent year-on-year compared with a steep contraction of -55.5 per cent in April 2020," IHS said.
Stating that there has been a marked improvement in business conditions across the manufacturing sector, it said factory orders increased during December on the back of the loosening of COVID-19 restrictions, strengthening demand and improved market conditions.
Although India faces a vast challenge to vaccinate its population of 1.4 billion people, it is about to commence its COVID-19 vaccination programme.
The Health regulator has approved the Oxford/AstraZeneca vaccine for emergency use.
An important advantage for India is that the Oxford/AstraZeneca vaccine is already being manufactured in the country by the Serum Institute of India, which projects that it will be able to manufacture 100 million COVID-19 vaccine doses per month by April 2021.
"With the Indian economy already showing a significant improvement in domestic economic activity in the fourth quarter of 2020, the outlook is for Indian GDP growth to rebound by 8.9 per cent year-on-year in the 2021-22 fiscal year," IHS said.
India Ratings & Research said the NSO projections for GDP growth in FY21 mean that the size of the Indian economy is expected to shrink to Rs 134.40 lakh crore in FY21 as against Rs 145.66 lakh crore in FY20.
"From the demand side except government consumption all other components namely private consumption, investment, exports and imports are estimated to contract in FY21," it said.
Although the headwinds emanating from the COVID-19-related challenges are unlikely to go away till mass vaccination becomes a reality, the rating agency said it expects GDP growth to turn positive in 4QFY21 (January-March) and FY22 GDP to come in at 9.6 per cent.
Arun Singh, Global Chief Economist, Dun & Bradstreet said the first advance estimates of GDP growth for FY21 is a tad lower than the RBI projection of 7.5 per cent contraction but more optimistic than the projections provided by many institutions, global and domestic.
"We expect the final GDP data to be slightly lower than the first advance estimates when the data for the informal economy is included and adjusted," he said.
While the investment and consumption demand data were expected to register a strong decline, the 5.8 per cent growth in government final consumption expenditure, the lowest since FY15, was not quite anticipated.
"During uncertain times, only the government can propel the multiplier effect in the economy. Hope hinges on the government to increase its spending to revive the private sector sentiment, overall demand and largely private investment," Singh said. "Thus, in spite of, the stimulus measure announced by the government during the course of the year, expectation of additional measures from the Union Budget remains high." Dharmakirti Joshi, Chief Economist, Crisil said only two sectors are above last year's level -- agriculture and electricity, gas and water supply -- and as expected, services are the worst hit.
"With industry seeing some recovery in the second half, the upcoming Budget will need to extend some support to the services sector, which continues to lag," he said."
Majority people want suspension of flights from countries with new virus strain: Survey
Not many fans for international flights at the moment in India.
PTI reports: "As India resumes flights to the UK from Friday, though in a restricted manner, after keeping them suspended for about a fortnight in the wake of detection of new variant of coronavirus, a majority of people want flights banned from the countries having cases with new variants, according to a survey.
The findings are based on the responses received from over 8,000 citizens across 207 districts in the country, online platform LocalCircles said on Friday.
Significantly, Aam Aadmi Party chief and Delhi Chief Minister, Arvind Kejriwal too had on Thursday urged the Centre to suspend the flights between India and the UK till January 31 in view of the “extremely serious” COVID-19 situation in that country.
India temporarily suspended flights to the UK following similar moves by many nations like Ireland, Germany, France, Italy, the Netherlands and Belgium as a precautionary measure amid concerns over the highly infectious new mutated strain of coronavirus, the B.1.1.7.
The total number of UK returnees having tested positive for B.1.1.7 variant in the country has reached 82. Despite this, the Centre announced resumption of flights between the two countries from January 8, LocalCircles said.
Stating that in its survey two days prior to the government announcing temporary suspension of the flights to the UK on December 22, 50 per cent of respondents had suggested suspension of bubble flights, among others, from the UK and other countries.
With the decision of the government to resume bubble international flights from January 8, also with countries impacted with the new strain of coronavirus, basis feedback from citizens, LocalCircles conducted another poll to understand citizens' pulse and if their perception to operate international bubble flights with impacted countries has changed in this 15-day period, it said.
As per the survey, as many as 64 per cent people want bubble flights shut with all countries that have reported cases of the B.1.1.7 strain while 32 per cent citizens are in favour of continuing to run these flights with similar or reduced schedule, LocalCircles said.
Over 40 countries around the world have reported B.1.1.7 cases during this 15-day period, the online platform said.
The Union Health Ministry has already issued a guideline that mandates all passengers travelling from the UK to India from January 8 to 31 to undergo a mandatory self-paid RT-PCR test at the airport, which costs Rs 3,400 per passenger.
“Given the highly transmissible nature of B.1.1.7 strain and now reports of even other strains like the E484K, many people are concerned that if these strains start spreading in India, given the population density, we could have a new wave of COVID at a time when India has seen over 250 per cent decline in cases in the last three months”, said Sachin Taparia, Founder and Chairman, LocalCircles.
According to the survey, "some 45 per cent citizens said they prefer shutting all such flights to and from countries which have cases of the new B.1.1.7 coronavirus strain till January 31 and reassess then, and another 19 per cent also said to keep all such flights shut till January 31." Also, another 19 per cent suggested instituting mandatory COVID-19 negative test certificate at boarding and mandatory test or quarantine at arrival and keep flights running per schedule.
Nearly 13 per cent maintained that flights should be kept running per a reduced frequency but suggested instituting mandatory COVID-19 negative test certificate at boarding and mandatory test or quarantine at arrival, it said."
SBI announces up to 30 bps concession on home loans rates
The RBI's rate cuts seem to have ad some effect.
PTI reports: "State Bank of India on Friday announced an interest concession of up to 30 basis points on home loans and a 100 per cent waiver on processing fees.
The new home loan interest rates are linked to CIBIL score and start from 6.80 per cent for loans up to Rs 30 lakh and 6.95 per cent for loans above Rs 30 lakh, a bank release said.
Women borrowers will get a concession of 5 bps, it said.
"With an aim to offer attractive concessions to the home buyers, country's largest lender SBI announces further interest concession of up to 30 bps on home loans and 100 per cent waiver on processing fees," the release said.
The bank said interest concession of up to 30 bps is also available in eight metro cities for loans up to Rs 5 crore.
Customers can also apply from the ease of their home via YONO App and get additional interest concession of 5 bps, the release said. "We are pleased to improve our concessions to prospective home loan customers up to March 2021," the bank's managing director (retail and digital banking), C S Setty, said.
The lender's eligible existing home loan borrowers can also avail a paperless pre-approved top-up home loan through the YONO App, he added."
World food price index rises for seventh straight month in Dec.
World food prices rose for a seventh consecutive month in December, with all the major categories, barring sugar, posting gains last month, the United Nations food agency said.
The Food and Agriculture Organization’s (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 107.5 points last month versus 105.2 in November. For the whole of 2020, the benchmark index averaged 97.9 points, a three-year high and a 3.1% increase from 2019.
It was still down more than 25% from its historical peak in 2011.
Vegetable oil prices continued recent strong gains, jumping 4.7% month-on-month in December after surging more than 14% in November. For the whole of 2020, the index was up 19.1% on 2019.
United States suspends French tariffs over digital services tax
The United States has indefinitely suspended 25% tariffs on French cosmetics, handbags and other imports it had planned in retaliation for a digital services tax Washington says will harm U.S. tech firms, as it investigates similar taxes elsewhere.
The U.S. Trade Representative's office (USTR) said on Thursday that the 25% tariffs on imports of the French goods,which are valued at around $1.3 billion annually, would be suspended indefinitely.
Washington announced the tariffs in July after concluding a French digital services tax would harm firms such as Google, Facebook, Apple and Amazon.
The USTR said suspending the action against France, which had been due to come into force on Jan. 6, will allow it to pursue a coordinated response in 10 investigations involving other countries, including India, Italy, Britain and Turkey.
M-cap of BSE-listed companies zoom to fresh record high of over Rs 195.21 lakh crore
New records in the stock market.
PTI reports: "The market capitalisation of BSE-listed companies zoomed to a fresh lifetime high of over Rs 195.21 lakh crore in morning trade on Friday as markets returned to winning ways after two days of decline.
Helped by the rally in the equity market, the market capitalisation of BSE-listed firms jumped to Rs 1,95,21,653.40 crore (USD 2.6 trillion) in early trade.
The BSE Sensex surged 471.31 points to a high of 48,564.63 on Friday.
Equity indices had declined for the second straight session till Thursday.
Last year, the Sensex gained 15.7 per cent where the benchmark index witnessed both ruthless selling and massive buying.
Equity investors grew richer by Rs 32.49 lakh crore in 2020 helped by massive returns in the equity market which had a roller coaster ride during the year hit by the coronavirus pandemic."
China’s Baidu plans to start smart EV company
China's Baidu Inc plans to form a company to make smart electric vehicles (EV), two sources familiar with the matter said, with manufacturing to be carried out at plants owned by automaker Geely.
Baidu, the leading search engine company in China, will take a majority stake and absolute voting power in the new company.
The venture will revamp some of Geely's existing car manufacturing facilities to make the vehicles, with in-car software input from Baidu and engineering know-how from Geely, sources told Reuters.
The companies are in talks to use Geely's EV-focused platform, Sustainable Experience Architecture (SEA), for future product development, one of the sources, who declined to be identified as the plan was private, said.
Indian IT stocks drive Nifty index to record high ahead of TCS results
An update on the stock market.
Reuters reports: "Indian IT services and financial stocks helped the blue-chip Nifty scale a record high on Friday, as investors turned their focus to the third-quarter earnings season with IT major Tata Consultancy Services reporting its results later in the day.
By 0454 GMT, the NSE Nifty 50 advanced 0.91% to 14,266.00 and the benchmark S&P BSE Sensex added 0.82% to 48,492.18, with both indexes on track to close out the first full week of the new year higher.
"Markets are focusing on earnings, more so on key sectors like IT and banking wherein they are keenly eyeing how the results pan out," said Narendra Solanki, head of equity research (fundamental) at Anand Rathi Investment Services.
"IT is being seen as performing good, based on last quarter's optimistic management commentary on outlook in India and globally."
TCS rose 1.6% and was among the top boosts to the Nifty, while smaller rivals Infosys and Wipro gained 1.5% and 1.6%, respectively, ahead of their results next week.
Separately, India's Central Statistics Office estimated on Thursday that the economy would contract 7.7% in the current financial year, broadly in line with forecasts of private economists and the central bank.
Among other sectors, the Nifty Bank Index climbed 0.67%, with HDFC Bank among the top boosts to the Nifty 50.
Biocon added 1.8% after the biopharmaceutical firm said Abu Dhabi-based holding company ADQ would invest 5.55 billion rupees in its biologics unit.
Sugar companies Balrampur Chini Mills, Avadh Sugar& Energy, Rana Sugars and Bajaj Hindusthan Sugar gained between 1.3% and 2.2%.
Indian sugar mills are aggressively signing export contracts as global prices hit multi-year highs, four industry officials told Reuters on Thursday.
Broader Asian markets scaled fresh highs after Wall Street hit record levels overnight, as investors bet on an economic recovery later in the year."
Rupee widens loss by 7 paise against U.S. dollar in opening trade
The rupee furthered its loss by 7 paise to trade at 73.38 against the U.S. dollar in opening deals on January 8, reeling under pressure from a rebound in American currency against key rivals and rising crude oil prices.
At the interbank foreign exchange market, the Indian unit traded in a small range of 73.35-73.39 in early deals.
The rupee had closed 20 paise lower at 73.31 a dollar on January 7.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.03% to 89.85.
Global crude oil benchmark Brent was trading higher by 0.17% at $54.61 per barrel.
LIC provides another opportunity to revive lapsed policies
To encourage individuals to continue their risk cover amid the coronavirus pandemic, LIC on Thursday launched a campaign where lapsed policies can be revived.
The insurance behemoth has launched a Special Revival Campaign starting from January 7 till March 6 for its customers to revive their lapsed individual policies subject to certain conditions.
It has also authorised its 1,526 satellite offices to revive policies where special medical tests are not required.
"Under this Special Revival Campaign, policies of specific eligible plans can be revived within five years from the date of the first unpaid premium subject to terms and conditions," LIC said in a statement.
Certain concession in health requirements is also being offered subject to eligibility, it said, adding that most policies can be revived only on the basis of a declaration of good health and a COVID-19 questionnaire to be submitted by the proposer/ life assured.
Tesla CEO Elon Musk now world's wealthiest person, reports U.S. media
Elon Musk, the outspoken and envelope-pushing chief executive of Tesla, overtook Amazon boss Jeff Bezos to become the world's wealthiest person, U.S. media reported Thursday.
Mr. Musk is a major shareholder of the electric car company and has benefited from Tesla's surging share price over the last year. CNBC estimated Musk's wealth at $185 billion.
The distinction is the latest superlative for the South African-born Musk, who leads the aerospace venture SpaceX in addition to Tesla, which has become a pacesetter for the car industry as conventional automakers try to catch up to Tesla's lead in electric autos.
Tesla had a strong 2020 as it ramped up auto production, broke ground on new factories and reported a series of profitable quarters that enabled shares to rise more than 700% during the year as it was added to the prestigious S&P 500 index.
India's Dec retail inflation likely fell to within RBI target
One fewer thing to worry about for the RBI during its next policy meet.
Reuters reports: "India's retail inflation likely fell sharply in December, landing within the Reserve Bank of India's target range, due to a significant drop in vegetable and food prices, a Reuters poll predicted.
The Jan. 5-7 poll of around 45 economists suggested retail inflation fell to 5.28% in December from 6.93% in November.
"Food inflation - particularly vegetable prices - are beginning to correct since supply lines are being restored in food aided by good monsoons," said Prithviraj Srinivas, chief economist at Axis Capital in Mumbai.
Inflation had been above the central bank's target range of 2%-6% for the eight months since April, a streak not seen since August 2014.
If it matches the poll forecast, December would be the lowest inflation print since November 2019, giving some relief to the RBI, which has been caught between boosting economic growth and curbing high inflation.
The RBI slashed interest rates by 115 basis points in March and May to stimulate growth in an economy battered by the coronavirus pandemic, but it has held the key repo rate at 4% since then, cautious of rising inflation.
"The recent rally in commodities lends to a fresh cost-push impact. Room for outright rate cuts is, thereby, limited, but the central bank will settle into a long pause, with a bias to anchor rates through strong dovish guidance," said Radhika Rao, economist at DBS Bank in Singapore.
Asia's third-largest economy contracted 7.5% in the quarter ending in September after declining 23.9% in the April-June quarter. It was forecast to contract 7.7% this fiscal year, the government said on Thursday.
Amid the global pandemic and an economic downturn, India has seen huge protests by farmers around the national capital region against new agricultural laws introduced by Prime Minister Narendra Modi's government.
The poll also predicted industrial output contracted 0.4% during November from a year earlier. In October, industrial production rose 3.6% after expanding marginally in September for the first time since February 2020.
Infrastructure output, which accounts for about 40% of total industrial production, contracted 2.6% in November."
Sensex rallies over 300 points in early trade; Nifty tops 14,200
A great start to the day for stocks after yesterday's losses.
PTI reports: "Equity benchmark Sensex surged over 300 points in early trade on Friday, helped by gains mainly in index majors Infosys, TCS and HDFC Bank amid positive trend in global equities.
The 30-share BSE index was trading 328.75 points or 0.68 per cent higher at 48,422.07.
Likewise, the broader NSE Nifty jumped 101.15 points or 0.72 per cent to 14,238.50 in opening deals.
On the Sensex chart, Sun Pharma was the top gainer, rising around 2 per cent, followed by Infosys, PowerGrid, TCS, Tech Mahindra, L&T, Dr Reddys and Bajaj Auto.
On the other hand, HDFC, Titan, Kotak Bank and Bajaj Finserv were among the laggards.
In the previous session, the Sensex had ended 80.74 points or 0.17 per cent lower at 48,093.32, and the Nifty had slipped 8.90 points or 0.06 per cent to 14,137.35.
Foreign portfolio investors (FPIs) were net buyers in the capital market as they purchased shares worth Rs 382.30 crore on Thursday, according to exchange data.
According to Binod Modi, Head-Strategy at Reliance Securities, domestic equities continue to look steady and firm at the moment.
A sign of fatigue is visible in the benchmark indices for last couple of trading days despite key economic data indicated continued rebound in December 2020, he added.
Similarly, a sharp dip in FPIs net flows in recent days indicate a kind of profit booking and sector rotation given a sharp return generated by select sectors, Modi said.
Domestic markets are, however, following the global investor euphoria around American politics. US markets recorded fresh highs as investors continue to focus of stronger fiscal stimulus after Congress confirmed president elect Joe Biden’s victory.
Elsewhere in Asia, bourses in Hong Kong, Tokyo and Seoul were trading with significant gains in mid-session deals, while Shanghai was in the red.
Meanwhile, the global oil benchmark Brent crude was trading 0.26 per cent higher at USD 54.52 per barrel."
GDP likely to contract by 7.7% in 2020-21, says Govt.
India’s real GDP (Gross Domestic Product)is estimated to contract by 7.7% in 2020-21, compared to a growth rate of 4.2% in 2019-20, with Real GVA (Gross Valued added) shrinking by 7.2%, as per advance estimates released by the National Statistical Office (NSO) on Thursday.
India’s economy had grown at 4.2% in 2019-20, but entered a recessionary phase with two successive quarters of sharp contraction triggered by the COVID-19 national lockdowns beginning March 2020.
Following a 23.9% collapse in the economy between April to June 2020 period, the GDP fell by 7.5% in the second quarter – leading to a real GDP contraction of 15.7% in the first half of 2020-21. The second half of the year will surface to record near-zero growth or a mere 0.1% contraction, the advanced estimates suggest.
Based on an uptick in several indicators in the last few months, several agencies have upgraded their estimates of India’s economy, with the Reserve Bank of India recently projecting a 7.5% contraction in the year compared to its earlier estimate of a 9.5% decline.
