The benchmark stock indices have opened the week on a positive note once again fueled by vaccine hopes.
Join us as we follow the top business news through the day.
Economic inequality: Germany vs USA
Sensex ends 195 points higher; Nifty tops 12,900
Yet another week begins on a positive note for stocks.
PTI reports: “Equity benchmark Sensex jumped 195 points on Monday, tracking gains in index-heavyweights Reliance Industries, Infosys and TCS amid largely positive cues from global markets and sustained foreign fund inflows.
After touching a record intra-day high of 44,271.15, the 30-share BSE index ended 194.90 points or 0.44 per cent higher at 44,077.15.
Similarly, the broader NSE Nifty rose 67.40 points or 0.52 per cent to close at 12,926.45.
ONGC was the top gainer in the Sensex pack, surging around 7 per cent, followed by IndusInd Bank, Infosys, Tech Mahindra, Reliance Industries, HCL Tech and TCS.
On the other hand, HDFC, ICICI Bank, Axis Bank, SBI and M&M were among the laggards.
Indian markets traded on a positive note following positive global cues amid COVID-19 vaccine hopes as more pharma companies announced successful initial trials for their vaccine candidates, said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi.
“During the afternoon session the markets pared initial gains and traded marginally positive briefly and scaled back strongly led by buying in IT, pharma and auto shares while banks and financial stocks pared losses for the day,” he added.
Earlier in the day, the COVID-19 vaccine candidate being developed by Oxford University showed crucial Phase 3 interim results.
The ChAdOx1 nCoV-2019, being produced in collaboration with AstraZeneca, was found to be 70.4 per cent effective when combining data from two dosing regimens.
Elsewhere in Asia, bourses in Shanghai, Hong Kong and Seoul ended with significant gains.
Stock exchanges in Europe were also trading on a positive note.
Meanwhile, Brent crude futures, the global oil benchmark, rose 1.64 per cent to USD 45.81 per barrel.
According to traders, persistent foreign fund inflows too buoyed domestic investor sentiment.
Foreign institutional investors remained net buyers in the capital market as they purchased shares worth Rs 3,860.78 crore on Friday, according to provisional exchange data.”
Govt’s ‘unprecedented’ reforms to usher in new era of growth: Kant
Some positive hope coming from the CEO of Niti Aayog.
PTI reports: “Niti Aayog CEO Amitabh Kant on Monday said that “unprecedented” reforms undertaken on both governance and economic fronts by the government will usher in a new era of growth and prosperity.
Kant also stressed the need to increase expenditure on research and development and strengthen intellectual property rights (IPR) laws.
“The economic and governance reforms undertaken by the government have been quite unprecedented and they will usher in a new era of growth and prosperity,” he said.
“We are making states compete on ease of doing business parameters. We are ranking states and naming and shaming them,” he said while addressing a virtual event organised by industry body CII.
Listing out reforms undertaken by the government in recent times, Kant said as the world battles contraction in economic growth, India has initiated reforms in key sectors including agriculture, labour and mining.
“The labour reforms will help in making India a manufacturing hub,” Kant said adding that the country has also successfully improved its ranking in Global Innovation Index.
The Niti Aayog CEO said that foreign direct investment (FDI) in India increased to USD 74 billion in 2019-20 from USD 36 billion in 2013-14 despite challenges in the global economic environment. Noting that infrastructure will be a key driver of growth, Kant said through the National Infrastructure Pipeline (NIP) which envisages USD 1.5 lakh crore of investments, 21 per cent of those will come from the private sector.
The project pipeline also has a high degree of readiness, he said adding that 40 per cent projects are already under implementation.
Kant further said asset monetisation will give robust long-term investment opportunities.
“We have identified several assets for monetisation including gas pipelines, power lines, highways, ports, airports,” Kant said adding strategic disinvestment is another avenue to raise revenue to undertake capital investment. Noting that European and American companies will look for alternatives owing to the US-China trade war, he said India can and must turn this crisis into an opportunity. “India is well placed to take advantage of realignment of the global supply chain,” Kant opined.
The Niti Aayog CEO said the government has approved 10 production linked incentive (PLI) schemes across a range of areas, and the total budgetary outlay for 10 PLI schemes now stands at Rs 1.96 lakh crore.”
India likely to have current account surplus this fiscal: CEA
India’s external sector may benefit from the under-performance of the domestic economy.
PTI reports: “Chief Economic Adviser K V Subramanian on Monday said India is likely to post current account surplus in the current financial year as there is moderation in import due to under heating of the economy triggered by the COVID-19 crisis.
This crisis is different from what the world witnessed during the taper tantrum, he said while addressing a virtual conference organised by industry body CII.
Taper tantrum phenomenon refers to the 2013 collective reactionary response that triggered a spike in US treasury yields, after investors learned that the US Fed was slowly putting brakes on its quantitative easing (QE) program. This led to a surge in inflation to high double digits emerging economies.
In contrast, he said, the COVID crisis is different and India identified the nature of this crisis and treated it differently from other economic crises of the past.
Noting that COVID crisis is a crisis to demand and primarily a negative shock to demand, Subramanian said, India’s response was suitably crafted to deal with that.
“And that is in fact if you can see is reflected in the fact that, this year we may be having a current account surplus. We had almost USD 20 billion current account surplus in Q1… USD 19.8 billion to be precise. Even if let’s say subsequent quarters do not see that kind of performance, we still will likely have a current account surplus…,” he said.
He further noted that there was impact on growth in the short run because of lockdowns etc and added that because of the efforts of the government, growth is not likely to get affected in the medium to long term due to COVID.
“So, in some sense, compared to a normal emerging economy crisis which is one of overheating of the economy, the COVID crisis is one of under heating of the economy and that is why the reforms, actually, felt very necessary so that the medium to long term growth of the (Indian) economy is not impacted and the potential growth of the economy is kept up high,” he said.
Talking about various reforms, Subramanian said Insolvency and Bankruptcy Code was towards greater formalisation of economy. It was followed by long pending agriculture and labour reforms, he added.
“If you take the agriculture reforms, the MSME definitional changes, the performance-linked incentive (PLI) scheme, the labour reforms, all these together are an attempt to actually change the macro configuration of the economy towards those sectors that are more employment intensive, especially the primary and secondary sectors,” he said.
This is important for sustained growth to happen and that can only happen through robust job creation in the economy, not through jobless growth, he added.
Observing that the idea of Aatmanirbhar Bharat is not anathema to competition, he said self-reliance can never happen without adequate capabilities.
Capabilities are never built in a vacuum but they are built only by competing with the best, he added.”
Intel reveals M15 laptop powered by its 11th generation core i5, i7 processors
Intel has revealed its while-label laptop – M15, a premium, precision engineered device, designed for its channel partners to configure and sell under their own brands.
The Intel NUC M15 Laptop Kit or ‘Bishop County’ as it is known internally, includes an 11th generation Intel core mobile processor coupled with Intel Iris Xe graphics, “for performance that was previously unattainable on thin and light laptops.”
“These laptops have been designed with Project Athena in mind. That’s Intel’s vision and criteria for delivering a responsive ultra-portable computing experience for real world all-day use,” Marcus Yam, Client Technology Evangelist at Intel, says in video.
The M15 laptop has a 15.6-inch screen, weighs under 1.7 kg, and features a 73 watt-hour battery that is capable of delivering up to 16 hours of video playback. It supports fast charging and can provide four hours of use with just 30 minutes of charge.
Gold gains as dollar dips, investors bet on stimulus
Gold is rallying despite the general risk-on sentiment in markets.
Reuters reports: “Gold rose on Monday, supported by a softer dollar and bets for further U.S. monetary stimulus to revive the pandemic-hit economy outweighing pressure from optimism over a possible COVID-19 vaccine rollout next month.
Spot gold rose 0.2% to $1,874.30 per ounce by 0729 GMT and U.S. gold futures fell 0.1% to $1,870.90.
U.S. Treasury Secretary Steven Mnuchin on Friday reassured markets that the Fed and Treasury had many tools left to support the economy, after deciding to de-fund several Federal Reserve lending programs by the end of the year.
“Ironically, the failure to deliver a fiscal package is supportive for gold,” said Michael McCarthy, chief strategist at CMC Markets, noting there might be more reliance on Fed support likely in the form of liquidity and lower interest rates as a result.
Non-yielding gold is often seen as a hedge against inflation that is likely to result from stimulus measures. Also lending support was a softer U.S. dollar, that lowered the cost of purchasing it to other currency holders. Gold’s advance also came despite news that U.S. healthcare workers could start getting COVID-19 inoculation shots within a day or two of regulatory consent next month, helping to push Asian equities to record highs.
“The vaccine is not going to change the fundamentals of gold in near term … It is going to take a lot of time for vaccine to penetrate into the global market,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India.
On the technical front, gold may retest support at $1,855 per ounce, a break below which could cause a fall to $1,841, according to Reuters technical analyst Wang Tao.
Silver rose 0.2% to $24.19 an ounce. Platinum fell 0.2% to $943.66, while palladium was 0.5% higher at $2,338.02.”
Audible bets on local languages for growth in India
Audible, a part of e-commerce giant Amazon, is working on adding more Indian languages to its ‘Suno’ service, that offers audio stories and podcasts, as the company looks to further strengthen its position in India.
Audible had entered India in November 2018, with a range of audio books and now has over 2 lakh titles available in the country. In December last year, it launched Audible Suno – an India-first app – that offers more than 100 audio stories and podcasts for free in English and Hindi.
“Suno is available in just Hindi and English so far, and we have purposefully focused on those two languages because we do not see too much value in doing anything that’s half baked and do not want to spread our efforts too thin.
Investors continue to dump Lakshmi Vilas Bank shares; stock tanks over 48% in 5 days
The freefall in Lakshmi Vilas Bnak shares continues.
PTI reports: “Shares of Lakshmi Vilas Bank declined for the fifth consecutive day on Monday and have tanked over 48 per cent during this time as investors continued to desert the counter amid host of negative news surrounding the company.
On Monday, the stock plunged 10 per cent to Rs 8.10 — its lower circuit limit as well as one year low — on the BSE.
On the NSE, it plummeted 10 per cent to Rs 8.10 — its lowest trading permissible limit for the day.
In five trading days, the stock has tanked 48.24 per cent on the BSE.
On Tuesday, the government placed Lakshmi Vilas Bank (LVB) under a one-month moratorium, superseded its board and capped withdrawals at Rs 25,000 per depositor.
The step was taken by the government, on the advice of the Reserve Bank of India, in view of the declining financial health of the private sector lender.
LVB is the third bank to be placed under moratorium since September last year after the cooperative bank PMC in 2019 and private sector lender Yes Bank this March. While Yes bank has successfully been revived under the guidance of State Bank, the PMC resolution is still a far cry.”
Reliance Industries, Future Group stocks rally on strong demand
The Competition Commission’s nod to the RIL-Future Retail deal has investors excited.
PTI reports: “Shares of Reliance Industries (RIL) jumped nearly 4 per cent in early trade on Monday after the Competition Commission approved the company’s proposed acquisition of retail, wholesale, logistics and warehousing businesses of Future Group.
Future Group stocks were also in heavy demand, rising up to 10 per cent.
RIL stock gained 3.72 per cent to Rs 1,970 on the BSE.
On the NSE, it jumped 3.67 per cent to Rs 1,969.35.
Besides, Future Retail zoomed 9.95 per cent to Rs 79 — its upper circuit limit, Future Lifestyle Fashions gained 9.99 per cent to Rs 90.30 and Future Enterprises Ltd shares rose by 4.92 per cent to its highest trading permissible limit for the day at Rs 10.45 on the BSE.
The Rs 24,713-crore deal that would boost Reliance Industries’ fast-growing retail business was announced in August.
In a tweet on Friday, the regulator said it has approved “acquisition of retail, wholesale, logistics and warehousing businesses of Future Group by Reliance Retail Ventures Limited and Reliance Retail and Fashion Lifestyle Limited“.
Deals beyond a certain threshold require approval of the Competition Commission of India (CCI), which keeps a tab on unfair business practices across sectors.”
RBI becomes world’s first monetary authority with a million Twitter followers
In a first among central banks, the Reserve Bank of India has become the first monetary authority in the world to have more than 1 million followers on its official Twitter handle.
Despite much less monetary firepower, the Reserve Bank of India (RBI) has beaten the world’s most powerful central banks — the U.S. Federal Reserve and the European Central Bank — on Twitter by a wide margin, emerging as the most popular central bank on the microblogging site with over 1 million followers.
As of Sunday, the RBI handle is followed by as many as 10,00,513 people around the world.
The achievement is impressive as the 85-year-old Reserve Bank was also a latecomer to the world of Twitter as it created the account only in January 2012.
According to the latest information available on the RBI’s Twitter handle ‘@RBI’, the number of followers has increased from 9.66 lakh on September 27, 2020 to over 10 lakh as of Sunday.
US Fed balance sheet hits fresh record high
Rupee opens on flat note against US dollar
Unlike stocks, it’s a flat opening for the rupee this morning.
PTI reports: “The rupee opened on a flat note and was trading in a narrow range against the US dollar in opening session on Monday as rising COVID-19 cases offset positive sentiments surrounding the progress on the vaccine front.
At the interbank forex market, the domestic unit opened at 74.12 against the US dollar. In early trade, the local unit also touched 74.17 against the American currency.
On Friday, the local unit had settled at 74.16 against the greenback.
“The overall sentiment prevailing globally can be best described as one of cautious optimism. With a couple of vaccines having been proven effective in trials, the question now is how much the situation gets worse before it becomes better and how much more damage is inflicted upon the economy until then,” said Abhishek Goenka, Founder and CEO, IFA Global.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.13 per cent to 92.26.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 9.30 points higher at 43,891.55, and the broader NSE Nifty rose 8.60 points to 12,867.65.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 3,860.78 crore on a net basis on Friday, according to exchange data.
Brent crude futures, the global oil benchmark, rose 0.47 per cent to USD 45.17 per barrel.”
‘Travel sector may take years to return to pre-COVID-19 level’
Even though some demand has started coming back, the travel industry may take years to get back to pre-pandemic business level, said Ritu Mehrotra, country manager — India, Sri Lanka, Maldives at Booking.com.
“Travel industry was one of the first industries to be hit and I think one of the last industries to maybe make a comeback,” she said in an interview.
“There are pockets where we are seeing demand coming up. We also feel that recovery will happen. It may take time,” she added.
She added that it may not just take quarters but years for the industry to reach pre-COVID-19 levels.
Pointing out that globally over a dozen airlines have had to shut shop, she said that impact across sectors had been severe and she expected to see consolidation in the travel industry.
Shares gain amid vaccine hopes; Reliance leads pack
The vaccine boost to stocks persists.
Reuters reports: “Indian shares rose on Monday as hopes for imminent coronavirus vaccines helped boost global investor sentiment, while Reliance Industries led gains domestically after winning regulatory approval for a $3.4 billion deal.
The NSE Nifty 50 index was up 0.49% at 12,929.15 by 0400 GMT. The S&P BSE Sensex climbed 0.51% to 44,105.39.
The first COVID-19 vaccines could be given to U.S. healthcare workers and others recommended by mid-December, a top health official said on Sunday, helping Asian stock markets trade higher on Monday.
In India, Reliance Industries advanced 3% after the country’s competition watchdog approved its deal to buy Future Group’s retail assets.”
Modi says India set to double oil refining capacity in 5 years, earlier than expected
India plans to nearly double its oil refining capacity in the next five years, Prime Minister Narendra Modi said on Saturday, offering a much more aggressive timeline than previously despite the coronavirus pandemic blighting the economy.
The country’s energy minister was quoted http://www.ficci.in/ficci-in-news-page.asp?nid=23094 in June as saying India’s oil refining capacity could jump to 450-500 million tonnes in 10 years from the current level of about 250 million tonnes.
But addressing a petroleum university’s convocation, Modi said “work is being done to nearly double the country’s oil refining capacity in the next five years”.
The convocation was also addressed virtually by billionaire Mukesh Ambani, whose Reliance Industries Ltd operates the world’s biggest oil refinery in Modi’s home state of Gujarat.