The Nifty and the Sensex have opened the day with strong gains adding to the gains already made this week.
Former RBI Governor Raghuram Rajan has urged emerging market nations to offer immediate stimulus to protect their long-term growth chances.
Join us as we follow the top business news through the day.
Analyst expectations trump reality
Banks sanction Rs 1.87 lakh cr to 50.7 lakh MSMEs under credit guarantee scheme
A status report on the Centre's credit stimulus scheme.
PTI reports: "The Finance Ministry on Thursday said banks have sanctioned loans of about Rs 1,87,579 crore to 50.7 lakh business units under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector impacted by slowdown caused by the coronavirus pandemic.
Of this, about 27 lakh MSME units received cumulative disbursement of Rs 1,36,140 crore till October 5.
The scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman in May to mitigate the distress caused by lockdown due to COVID-19 by providing credit to different sectors, especially micro, small and medium enterprises (MSMEs).
The latest numbers on ECLGS, as released by the finance ministry, comprise disbursements by all 12 public sector banks (PSBs), 24 private sector banks and 31 non-banking financial companies (NBFCs).
“As of 5 Oct 2020, the total amount sanctioned under the 100% Emergency Credit Line Guarantee Scheme by #PSBs, private banks & NBFCs to #MSMEs & individuals stands at Rs 1,87,579 cr, of which Rs 1,36,140 cr has already been disbursed,” the finance minister said in a tweet.
The loan amounts sanctioned by PSBs increased to Rs 81,648.82 crore, of which Rs 68,814.43 crore has been disbursed as of October 5, she said.
At the same time, private sector banks have sanctioned Rs 86,576 crore of loans and disbursed Rs 59,740 crore, while NBFCs sanctioned Rs 3,032 crore with disbursement of Rs 2,227 crore.
“The ambit of the Scheme was expanded to include MSMEs with turnover of up to Rs 250 crore & individuals for business purposes. As of 05 Oct 2020, Rs 17,460 crore of loans to individuals have been sanctioned, of which Rs 5,939 crore has been disbursed,” she said.
In another tweet, she said as many as 33 stranded housing projects with investment of Rs 4,197 crore were accorded final approval under the SWAMIH scheme.
“Special window for Affordable & Mid Income Housing Fund (SWAMIH) is working at a fast pace to provide relief to homeowners. As on 05.10.2020, 33 projects with investment of Rs 4,197 cr accorded final approval & will lead to completion of 25,048 home units,” the finance minister said in tweet.
Overall, 123 projects have now been sanctioned, including final approval to 33 projects, with an investment of Rs 12,079 crore that would target to provide relief to 81,308 homeowners, she said.
On May 20, the Cabinet approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through ECLGS for MSME sector.
Under the scheme, 100 per cent guarantee coverage will be provided by the National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers in the form of a guaranteed emergency credit line (GECL) facility.
For this purpose, a corpus of Rs 41,600 crore was set up by the government, spread over the current and next three financial years.
The scheme will be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the scheme to October 31 or till the amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier."
Paytm aims to support 1 million apps on Mini App Store
Paytm on Thursday said it aims to support one million apps on its recently launched Android Mini App Store as part of its efforts to support Indian developers and compete against tech giant Google.
The company will also invest ₹ 10 crore for the app developers on its platform.
Paytm founder Vijay Shekhar Sharma - who has been vociferously voicing his concerns around the “monopolistic” behaviour of the US-based company - said with its steep 30 % fee, Google has started to play the role of a “toll collector” instead of enabling the ecosystem.
“App developers are dependent on a giant monopoly, Google and Google has started to play like a toll collector instead of trying to enable the ecosystem only...we will bring one million app before Google opens its charging obligation on each Indian developers,” he said.
Rupee settles 9 paise higher at 73.24 against US dollar
The bullish sentiment in stocks has helped the rupee today.
PTI reports: "The rupee strengthened by 9 paise to close at 73.24 against the US dollar on Thursday, supported by positive domestic equities and weak American currency.
At the interbank forex market, the rupee traded in a narrow range. It opened at 73.29 against the American currency and gained further ground to finally settle at 73.24, up 9 paise from its previous close of 73.33.
This is the second consecutive session of gain for the rupee.
During the session, the domestic unit witnessed an intra-day high of 73.22 and a low of 73.35 against the US dollar.
Traders said investors are cautious ahead of the RBI Monetary Policy Committee (MPC) decision on Friday.
The newly-constituted MPC of the Reserve Bank began its three-day deliberations on Wednesday. The decision of the rate-setting panel will be announced on October 9.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.05 per cent to 93.57.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 435.66 points higher at 40,314.61, and the broader NSE Nifty rose 120.85 points to 11,859.70.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,093.81 crore on Wednesday, according to exchange data.
Brent crude futures, the global oil benchmark, rose 0.88 per cent to USD 42.36 per barrel."
World Bank expects India’s GDP to contract by 9.6% this fiscal
The World Bank on Thursday said that India’s GDP is expected to contract by 9.6% this fiscal which is reflective of the national lockdown and the income shock experienced by households and firms due to the COVID-19 pandemic, noting that the country’s economic situation is much worse than ever seen before.
The Washington-based global lender, in its latest South Asia Economic Focus report ahead of the annual meeting of the World Bank and International Monetary Fund, forecasts a sharper than expected economic slump across the region, with regional growth expected to contract by 7.7% in 2020, after topping 6% annually in the past five years.
India’s GDP is expected to contract by 9.6% in the fiscal year that started in March, the World Bank said in the report released in Washington. Regional growth is projected to rebound to 4.5% in 2021, it said.
Wipro gains over 6% as Board to consider share buyback plan
One more IT major gets a boost on its buyback plans.
PTI reports: "Shares of IT services major Wipro rose by over 6 per cent in early trade on Thursday after the company said its Board will consider a buyback plan on October 13.
The stock gained 6.27 per cent to Rs 356.30 -- its 52-week high -- on the BSE.
At the NSE, it jumped 6.27 per cent to a one-year high of Rs 356.35.
The announcement comes close on the heels of larger rival Tata Consultancy Services’ Board clearing an up to Rs 16,000 crore buyback plan.
”...the Board of Directors will be considering a proposal of buyback of equity shares of the company at the...meeting scheduled to be held on October 13, 2020,” Wipro said in a regulatory filing.
However, no other details were provided.
“The outcome of the Board meeting will be communicated to the stock exchanges soon after the conclusion of the Board meeting on October 13, 2020,” it added."
ZEEL independent director pays fine for violation of insider trading norms
Zee Entertainment Enterprise Ltd (ZEEL) on Wednesday said its Independent Director Manish Chokhani has paid a fine of ₹8.20 lakh for violation of insider trading norms.
The company has transferred the said amount to the Investor Protection and Education Fund (IPEF) administered by market regulator Sebi, ZEEL said in a regulatory filing.
“The said Designated Person (Mr. Chokhani) has remitted a fine of ₹8.20 lakh to the Company’s account and the Company in turn has transferred the said amount to IPEF administered by SEBI, it said.
Mr. Chokhani had acquired one lakh equity shares of ZEEL at an average price of ₹200 in August this year.
The shares were purchased in the name of a partnership firm on August 19, 2020 — one day after publication of Q1 2020 financial results but before the trading window could open as scheduled after 48 hours of publication of results.
Passenger vehicle retail sales rise 10% in Sept: FADA
More signs of recovery in the auto sector.
PTI reports: "Automobile dealers’ body FADA on Thursday said passenger vehicle (PV) retail sales in September witnessed year-on-year increase of 9.81 per cent to 1,95,665 units, amid shift in customer preference for personal mobility over public transport.
According to the Federation of Automobile Dealers Associations (FADA), which collected vehicle registration data from 1,254 out of the 1,461 regional transport offices (RTOs), PV sales stood at 1,78,189 units in September 2019.
Two-wheeler sales, however, declined 12.62 per cent to 10,16,977 units last month, as compared to 11,63,918 units in September 2019.
Commercial vehicle sales also declined 33.65 per cent to 39,600 units, as compared to 59,683 units a year ago.
Similarly, three-wheeler sales fell 58.86 per cent to 24,060 units last month, as against 58,485 units in the year-ago period.
Tractor sales grew by 80.39 per cent to 68,564 units last month, as compared to 38,008 units in the same month last year.
Total sales across categories declined 10.24 per cent to 13,44,866 units, last month as against 14,98,283 units in the year-ago period.
“With social distancing in customer’s mind coupled with the government’s push to further normalise business conditions and banks becoming more considerate to finance vehicles, entry level passenger vehicles saw good demand thus indicating a preference for personal mobility over public transport,” FADA President Vinkesh Gulati said.
New launches and availability of vehicles played their part as a catalyst while a lower base during the last fiscal also helped the cause, he added.
Tractor sales continued its dream run as Kharif sowing witnessed record progress of area covered till date when compared to last year, Gulati said.
With good Rabi season resulting in good disposable income, the rural market also saw its rub off effect on two-wheeler, small passenger vehicle and small commercial vehicle sales, he added.
Till recently, the economic revival was mostly limited to rural India and the impact of COVID-19 was still felt on larger states and urban centres, Gulati said.
“The top states which make up half of India’s economic output -- Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka, Gujarat and West Bengal, are now showing signs of revival as economic activities in these states are at its peak since lockdown began in March. This has also helped in creating a demand for automobile sales,” he noted.
With no more lockdowns in sight, FADA anticipates a high growth period during October and November for automobile sales in the country, Gulati said."
TCS jumps over 5% after share buyback announcement
A major cause behind the rally in the indices.
PTI reports: "Shares of Tata Consultancy Services (TCS) on Thursday jumped over 5 per cent after the company announced a mega-Rs 16,000 crore buyback plan at Rs 3,000 per equity share.
TCS was the top gainer in the Sensex pack in early trade. The stock rose by 5 per cent to Rs 2,875 -- its one-year high -- on the BSE.
On the NSE, it jumped 5.18 per cent to its 52-week high of Rs 2,877.90.
“TCS impressed with revenue growth of 4.8 per cent quarter-on-quarter. Broad-based growth across geographies and verticals indicates healthy recovery across segments,” said a report by Motilal Oswal Research.
In 2017 and 2018 too, TCS had undertaken buyback offers of similar sizes.
The board of directors of the company has approved a proposal to buyback up to 5,33,33,333 equity shares of the company for an aggregate amount not exceeding Rs 16,000 crore, being 1.42 per cent of the total paid-up equity share capital at Rs 3,000 per equity share, TCS said in a regulatory filing on Wednesday.
The buyback will be conducted via a tender offer route using the stock exchange mechanism, it added.
TCS had on Wednesday reported a 6.87 per cent dip in the September quarter net at Rs 7,504 crore but said the demand has recovered faster than projected and will be sustainable going forward as well.
It had to set aside Rs 1,218 crore as provisions because of the trade secrets lawsuit filed by Epic Systems, if not the net profit would have grown 4.9 per cent to Rs 8,433 crore.
Revenues for the July-September period came at Rs 40,135 crore, up 3 per cent when compared to the year-ago period, and its chief executive and managing director Rajesh Gopinathan said the Rs 40,000 crore-mark was reached one quarter ahead of what was expected at the start of the pandemic and stressed that the company is in the midst of a “sustainable demand recovery“.
It is confident about the demand recovery, which “stands on stronger legs”, but the prevailing economic climate and realities on the health front make it “cautious”, Gopinathan said.
Other IT stocks like HCL Tech, Infosys, Tech Mahindra and Wipro were also trading with up to 4.5 per cent gains."
PFRDA allows video-based customer identification process for NPS subscribers
Pension Fund Regulatory and Development Authority (PFRDA) on Wednesday said it has allowed video-based customer identification process to further facilitate on-boarding, withdrawals and exit for NPS subscribers.
The regulator has been constantly introducing new methods of subscriber authentication such as OTP/ eSign based onboarding, offline Aadhaar-based on-boarding, third party reliance for KYC, e-nomination, e-exit for eNPS subscribers to make subscriber registration, exit process and processing other service requests seamless and subscriber friendly, according to a release.
While a lot of NPS (National Pension System) services have been moved online, including onboarding of new subscribers and their servicing, the physical presence of NPS subscribers is required at POPs (Points of Presence) for In-Person Verification (IPV) to complete the process of exit and some other allied services.
Online videos, dealer websites playing significant role in auto purchase journey: Google
Interesting observations on consumer behavior in the automobile market.
PTI reports: "A large number of people are turning to digital channels like search engines, online videos and dealer websites for research before making their decisions about buying new and used cars and two-wheelers, a report by Google and Kantar said on Wednesday.
The report titled ‘Auto Gear Shift India 2020’ explored the digital influence on Indian automobile buyers and the opportunities for the industries.
“With the consumer placing a much higher importance on online and digital channels - search engines, online videos and dealers’ websites have become the three most important touch points for the buyers - leaving behind traditional media platforms,” it said.
The report found that online video plays a significant role in the purchase journey of an automobile shopper, allowing buyers to experience cars and two-wheelers from different and unique angles such as vehicle features, design (walk-around interior, features and technology), in-action (vehicle safety tests, VR content, performance videos), reviews and ads (testimonials, third party reviews or comparison tests.
As digital becomes the primary touch point for prospective buyers, automobile brands and dealerships have heightened their online presence to be a part of the consumer’s car-purchasing journey, it added.
“The auto industry is undergoing a digital transformation and many leading brands have already digitised their consumer touch points. With the consumer preferences shifting to digital across categories, we will see more brands find new ways to engage consumers on digital platforms,” Nikhil Bansal, Head of Industry - Auto at Google India, said.
He added that the duration between research and final decision making has become short with easy access to information online.
“This makes it even more important for auto brands to create richer experiences and content that allows buyers to not just get information but also get an immersive brand experience to engage and influence their decision,” he said.
The report is based on a survey of 2,000 respondents covering 17 cities from tier I, II and III cities."
S&P 500 performance without big tech stocks
Uday Shankar to step down as President of Walt Disney APAC, chairman Star & Disney India
Change of guard at Disney India.
PTI reports: "Global media and entertainment conglomerate The Walt Disney Company on Thursday said Uday Shankar will step down as President of its Asia Pacific (APAC) business and Chairman of Star and Disney India with effect from December 31, 2020.
Shankar has quit to pursue entrepreneurial interests outside the company.
“Shankar will step down as President, The Walt Disney Company APAC, and Chairman, Star and Disney India, effective as of December 31, 2020,” Rebecca Campbell, Chairman of Disney’s Direct-to-Consumer and International segment said in a statement.
The company said that over the next three months, Shankar will work closely with Campbell to identify his successor to ensure a smooth transition.
Since February 2019, Shankar has served as President, The Walt Disney Company APAC, and chairman, Star and Disney India.
Disney’s Direct-to-Consumer and International segment includes the company’s direct-to-consumer streaming businesses including Disney+, Hulu, ESPN+ and Disney+ Hotstar, as well as Disney’s international media operations stretching from Europe to Asia to Latin America."
‘Need short-term relief to retain long-term growth hopes’
Emerging markets must take urgent relief measures to address distress among households and small firms due to the pandemic and lockdowns, instead of holding off for a stimulus package after the virus is reined in, former Reserve Bank of India governor Raghuram Rajan said on Tuesday.
Speaking at ICRIER’s annual G20 conference, Dr. Rajan said countries such as Mexico, Peru and India have been very badly affected by the pandemic, both in terms of infection rates and the adverse effects on households and firms.
“Many governments have been cautious, and some would argue overly cautious, because they have lower resources for relief, and they fear rating downgrades. For a number of countries, the right thing to do, which is perhaps what the IMF is now saying, is to spend to diminish the damage than to wait to spend hoping that it will increase demand,” Dr. Rajan said, stressing that relief was distinct from stimulus measures that only aim to increase demand.
Sensex soars over 400 points in early trade; IT stocks shine
Yet another great start to the day for stocks.
PTI reports: "Equity benchmark Sensex rallied over 400 points in opening trade on Thursday led by strong buying sentiment in IT and banking stocks amid positive cues from global markets and sustained foreign fund inflow.
The 30-share index was trading 452.15 points or 1.13 per cent higher at 40,331.10, and the NSE Nifty soared 117.50 points or 1 per cent to 11,856.35.
Tata Consultancy Services (TCS) was the top gainer in the Sensex pack, surging over 4 per cent, after the IT major announced a mega-Rs 16,000 crore buyback plan at Rs 3,000 per equity share.
The firm, meanwhile, reported a 6.87 per cent dip in the September quarter net at Rs 7,504 crore but said the demand has recovered faster than projected and will be sustainable going forward as well.
In the Sensex pack, the other stocks that were trading on a positive note include HCL Tech, Infosys, Tech Mahindra, Tata Steel, Bajaj Finserv, IndusInd Bank, Axis Bank and SBI.
On the other hand, ONGC, Asian Paints, Titan, ITC and PowerGrid were among the laggards.
In the previous session, Sensex ended 304.38 points or 0.77 per cent higher at 39,878.95, while Nifty jumped 76.45 points or 0.66 per cent to close at 11,738.85.
Exchange data showed that foreign institutional investors bought equities worth Rs 1,093.81 crore on a net basis on Wednesday.
According to Arjun Mahajan, Head - Institutional Business - at Reliance Securities, while there is still some amount of ambiguity about fiscal stimulus, US President Donald Trump’s remark to sign separate fiscal stimulus created positive sentiments which led US markets to move higher.
Indian market is expected to move in tandem with global markets, he said, adding that better prospects of 2Q earnings and continued hope about domestic fiscal stimulus will provide support to domestic benchmarks.
IT stocks are likely to be in focus after solid 2Q numbers reported by TCS along with announcement of the buyback offer, he added.
Meanwhile, on the global front, bourses in Tokyo and Seoul were trading on a positive note in mid-session deals, while Hong Kong was in the red. Stock exchanges in Shanghai were closed for holidays.
Wall Street indices ended with significant gains in the overnight session.
International oil benchmark Brent crude was trading 0.17 per cent higher at USD 42.06 per barrel."
HDFC Bank offers loan for care at Apollo
HDFC Bank has tied up with Apollo Hospitals Ltd. to offer its customers unsecured, pre-approved loan of up to ₹40 lakh for medical expenses incurred at the healthcare chain.
‘The Healthy Life Programme’ will be offered exclusively to HDFC Bank customers at Apollo 24/7.
As per the plan, the bank’s customers will have round-the-clock access to an emergency doctor at the hospital at no cost along with benefits such as a choice of payment options and ease of finance for treatment at all Apollo Hospitals.
The initiative was launched digitally by HDFC Bank MD Aditya Puri, and Apollo Hospitals Group chairman, Prathap C. Reddy in the presence of Apollo Hospitals group executive vice-chairperson Shobana Kamineni, and HDFC Bank MD-designate Sashidhar Jagdishan.
