Travel Rebound Stalls as China Cuts Flights, U.S. Tops Out
For the second week in a row, the recovery in global air traffic has taken a step back.
Airline seat capacity declined about a quarter of a percentage point to 68% of the amount offered in the same week of 2019, before the Covid-19 pandemic disrupted a multi-year travel expansion fueled by the rising number of middle-class tourists from China and Southeast Asia.
From the start of the year, carriers in China, India, the U.S. and Europe, to name some, registered steady gains as they slowly added more flights to their schedules. But the rise of the delta variant has challenged the return to normalcy — first in India, then in the U.K., and now in China and other Asian nations like Indonesia and Vietnam.
After swift, vaccine-driven gains, the U.S. rebound has been stuck for about five weeks as airlines struggle with operational issues, Bloomberg reported.
IBM to set up software lab in Kerala; CM hails decision
Technology giant IBM on Wednesday announced that it is working to establish a Software Lab in Kochi.
Chief Minister Pinarayi Viajayan hailed the IT major's decision, saying this will pave the way for a huge leap in the state's IT development.
IBM Software Labs are leading global innovation centers that develop and deliver next-generation software portfolio and cloud offerings.
Indian shares close at record highs as financial, bank stocks rally
Indian shares closed higher on Wednesday, led by financial and banking stocks, while State Bank of India surged to an all-time high after the country's largest lender by assets reported a record quarterly profit.
The NSE Nifty 50 index ended 0.79% higher at 16,258.80 and the benchmark S&P BSE Sensex rose 1% to 54,369.77.
HDFC Ltd and Kotak Mahindra Bank were the top gainers on the Nifty 50 index, rising 4.75% and 3.81%, respectively, Reuters reported.
Maruti Suzuki's Gujarat car plant output hit due to chip shortage
Suzuki Motor Gujarat Pvt Ltd has decided to scale down production of vehicles because of semiconductor shortage. The company is a subsidiary of Suzuki Motor Corp and supplies all its vehicles to Maruti Suzuki India Ltd.
Suzuki Motor Gujarat will not carry out production on three Saturdays, Aug 7, 14 and 21, and may also temporarily reduce shifts at some of its production lines from two to one, Maruti Suzuki informed the exchanges today.
Today, shares of Maruti Suzuki closed 1.3% lower at 7102.90 rupees on the National Stock Exchange.
This development comes after Tata Motors Ltd issued a profit warning in July, saying its subsidiary Jaguar Land Rover may report a loss at an operational level in the September quarter due to the shortage of semi-conductors impacting production.
Oil Drops for Third Day as China Battles to Quash Delta Outbreak
Oil dropped for a third straight day on concern that curbs to combat the spread of the delta coronavirus variant will hurt demand, with investors zeroing in on a fast-spreading outbreak in key importer China.
West Texas Intermediate traded 0.2% lower after retreating 4.6% in the opening two days of the week. The highly-infectious variant has been detected in nearly half of China’s 32 provinces within just two weeks, Bloomberg reported.
MSCI World index ride earnings to fresh high, dollar flat
MSCI World index rode earnings to a record high on Wednesday, while the dollar and Treasury yields languished in the wait for U.S. employment data to provide clues to the pace of monetary tightening in the world's biggest economy.
The MSCI World index, a broad gauge of equity markets, was up 0.2%, Reuters reported.
Strong corporate profits have eased concerns over the COVID-19 pandemic, as vaccine roll-outs continue apace in developed markets, despite a resurgence of cases in Asian countries including China.
Close to 90% of companies listed on the S&P500 have reported positive earnings for the second quarter, National Australia Bank (NAB) economist Tapas Strickland said.
Shares of Vodafone's India arm in free-fall
Shares of telecom giant Vodafone's debt-ridden Indian unit fell sharply for a second day on Wednesday following reports that its billionaire chairman thought the firm was on the brink of collapse and wanted to sell his stake.
The firm's shares tanked more than 10% on Tuesday, the day after details of the letter emerged, and fell a further 18.5% on Wednesday.
This has wiped about 54 billion rupees off its market capitalisation.
Its total debt stood at 1.86 trillion rupees at the end of March and it has been struggling to raise funds from investors, AFP reported.
India rupee hits 6-week top on IPO inflows, record-high stocks
The Indian rupee strengthened to a six-week high on Wednesday, buoyed by gains in local stocks and inflows towards initial public offerings, but bonds stayed largely steady ahead of an interest rate review due later this week.
After touching 74.0925 earlier, its strongest since June 22, rupee closed at 74.28 on Tuesday, Reuters reported.
Tencent Boss Loses $14 Billion in Rout, More Than Jack Ma
Tencent Holdings Ltd.’s mild-mannered boss, Pony Ma, has lost more paper wealth over the past nine months than Jack Ma, the combative co-founder of Alibaba Group Holding Ltd. and Ant Group Co.
Pony’s fortune has dropped by almost $14 billion since the Ant IPO was suspended in November, falling to $45.8 billion on Tuesday, according to the Bloomberg Billionaires Index. He now ranks third on the China rich list behind Jack, who has a net worth of $47.8 billion.
The reversal underscores how rapidly Beijing’s crackdown has expanded since authorities scuttled Ant’s initial public offering on Nov. 3. What initially looked like a targeted campaign against China’s most outspoken tech tycoon has since spread to nearly every corner of the industry and beyond.
The rout left the company, whose market capitalization briefly neared $1 trillion earlier this year, with a value of $550.5 billion, Bloomberg reported.
SBI reports record quarterly profit as bad loan provisions drop
State Bank of India, the country's largest lender by assets, reported a record quarterly profit that also beat analysts' expectations on Wednesday, helped by a sharp drop in provisions for soured assets.
Net profit rose 55% to 65.04 billion rupees for the June-ended quarter, from 41.89 billion rupees a year earlier, as bad loan provisions fell 46.6%, the lender said in a regulatory filing.
The results come as many Indian banks struggle to contain bad loan additions, especially in the retail portfolio, as the second COVID-19 wave and resultant lockdowns hit economic activity, limited borrowers' ability to repay loans and affected collections.
SBI shares, which have outperformed the Nifty Bank index with a more than 60% jump to record highs this year, were up 3% after the results.
As China's recovery wobbles, economists expect more policy easing
China may need more monetary and fiscal easing to halt an economic slowdown in the wake of torrential rains and flooding, and authorities' tough response to outbreaks of the highly-transmissible coronavirus Delta variant, economists say.
Nomura cut its China GDP growth forecast to 5.1% in the third quarter from 6.4%, and 4.4% in the fourth quarter from 5.3%.
It also cut its full-year growth projection to 8.2% from 8.9%, citing the impact of Beijing's tough stance on COVID control due to the emergence of the coronavirus Delta variant in many major cities, Reuters reported.
Honda reverts to profit on recovery from pandemic damage
Honda returned to profitability in April-June, recording a 222.5 billion yen ($2 billion) profit, as better sales and costs cuts added to the Japanese automaker’s bottom line, AP reported.
Honda Motor Co. had racked up a 80.8 billion yen loss during the same period in the previous year, when the entire auto industry was hurt by the pandemic.
Honda's quarterly sales in the June-ended quarter, 2021 stood at 3.6 trillion yen ($33 billion) rising 69% from the same period in the previous year as global vehicles sales recovered in North America. Its motorcycle sales jumped in India and Indonesia.
Bharti Airtel net profit at Rs 284 cr in June quarter; revenue rises 15.3%
Bharti Airtel on Tuesday reported a consolidated net profit of Rs 284 crore for the June quarter against a loss of Rs 15,933 crore during the same period in the previous year. Airtel’s total revenue surged 15.3% to Rs 26,854 crore during the June-ended quarter, according to a company statement.
Airtel’s average realisation per customer measured in terms of ARPU — a key metric for telecom firms — was at Rs 146 in the June-ended quarter, compared to Rs 138 in Q1 FY21, PTI reported.
The company attributed the rise in ARPU to its focus on acquiring quality customers as well as secular upgrading of customers to data.
Toyota posts record $9.2 billion quarterly operating profit
Toyota made a record quarterly operating profit of 997.49 billion yen ($9.15 billion) in the three months ended June 30 after the pandemic-hit sales rebounded, Reuters reported.
The company beat average estimate of of 752 billion yen based on 10 analysts polled by Refintiv. Toyota maintained its yearly operating profit forecast of 2.5 trillion yen primarily on account of increasing spread of coronavirus, chip shortage and higher cost for parts.
It also stuck to sales forecast of 8.7 million in the current fiscal year, an increase from 7.65 million last year.
Toyota shares fell 2% in afternoon trading on Wednesday.
KFC, Pizza Hut operator raises ₹825 crore from anchor investors
Devyani International, largest franchisee of KFC, and Pizza Hut has raised ₹ 825 crore from anchor investors, PTI reported. The company will issue 9.16 crore equity shares to 41 anchor investors at Rs 90 apiece.
28 foreign portfolio investors (FPIs) such as Abu Dhabi Investment Authority, Fidelity, Goldman Sachs, Monetary Authority of Singapore, Abu Dhabi Investment Council, Government of Singapore, Nomura and Macquarie participated in the anchor book.
Besides,13 domestic firms including 6 mutual funds, 6 life insurance companies and one general insurance company were part of the anchor book.
The company is planning to raise 1838 crore which consists of fresh issue of equity shares worth Rs 440 crore and an offer-for-sale of up to 155,333,330 equity shares by promoter and existing shareholder.
The price band has been fixed at Rs 86-90 a share for its IPO as the three-day initial share-sale opened for subscription on Wednesday.
India's services activity shrinks for third consecutive month in July
India's activity in service sector shrank for the third consecutive month in July after restrictions due to the coronavirus spread reduced demand, prompting firms to turn most pessimistic in a year, Reuters reported.
Services Purchasing Managers' Index compiled by IHS Markit increased to 45.4 in July from 41.2 in June but the below 50-mark highlighted contraction for the third month.
"The current COVID-19 environment continued to weigh on the performance of the service sector that is so crucial to the Indian economy," Pollyanna De Lima, economics associate director at IHS Markit told Reuters .
BharatPe becomes a unicorn, valuation rises to $2.85 billion
Merchant payment and financial services provider raised $370 million in a funding round led by Tiger Global , taking the company's post-money valuation to $2.85 million.
The series E round included a secondary component of $20 million, PTI reported.
Ashneer Grover will be the Co-founder and Managing Director, while Suhail Sameer has been appointed as the CEO.
“We now have $0.5 billion cash on books and are extremely well capitalised to deliver on our mandate to build India's first truly digital bank. Rarely does one witness the original thesis play out without any pivot," Grover said. BharatPe will remain maniacally focused on lending as the core business and small merchants as our primary target segment, he added.
Avantha Group promoter Gautam Thapar arrested in money laundering case
The Enforcement Directorate arrested Avantha Group promoter Gautam Thapa r on Tuesday under the Prevention of Money Laundering Act in connection with a money laundering case, PTI reported.
ED carried out raids against Thapar and his business, and will produce him before the court on Wednesday to seek custody. The agency is investigating a transaction between Thapar's company, Avantha Reality, Yes Bank co-founder Rana Kapoor and his wife.
"The (CBI) FIR alleges that Rana Kapoor, then MD and CEO of Yes Bank Limited, obtained illegal gratification in the form of a property in a prime location in Delhi at much less than the realisable market value belonging to Avantha Reality Ltd for sanction of a loan to ARL and for extending concessions, relaxations and waivers in the already existing credit facilities provided to Avantha Group companies and for advancing new and additional loans to them by Yes Bank Ltd," the ED had said earlier.
Sensex zooms past 54,000, Nifty above 16,200
The Indian indices opened at record high levels as Sensex hit 54,000 while Nifty opened just short of 16,200. Sensex was up 0.46% while Nifty rose 0.40%. On Sensex, almost all shares opened in green barring Sun Pharma and Bharti Airtel. BSE Sensex reached a fresh all-time high of 54,258 points and NSE crosses 16,250 for the first time ever.
U.K. considers blocking NVIDIA's Arm acquisition on security risks
The U.K. government is considering blocking NVIDIA's $40 billion acquisition of Arm on potential national security risks, Bloomberg reported. NVIDIA said it is working with the government on the regulatory process.
Arm is a giant in semiconductor industry, powering almost every smartphones along with millions of other devices. The Competition and Markets Authority (CMA) of the U.K. sent its investigation report to the government on July 20. The phase 1 assessment of the deal points to worrying national security concerns for the U.K., according to the Bloomberg report.
Oil fell for third day as Delta variant spread to pull down demand
Oil prices plunged for a third day on Wednesday as the Delta variant of the coronavirus raised concerns that top consumers of oil will cut demand, Reuters reported.
Brent crude oil futures fell 0.3% to $72.19 a barrel while West Texas Intermediate (WTI) crude dropped 0.5% to $70.23 a barrel. Both fell on Tuesday to their lowest since July 21 before gaining some lost value.
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Asian shares advance to one-week high but concern over Delta variant rises
Asian shares neared one-week high on Wednesday after strong corporate earnings from the U.S. companies, Reuters reported. However, the rising cases of coronavirus owing to Delta variant has raised concern among investors.
MSCI's index of Asia-Pacific shares outside Japan rose to 0.1% to the highest since July 26. Japan's Nikkei along with Chinese shares were in red.
