Domestic fuel prices continue to move up as the global crude oil rally and the Centre's urge to shore up revenues leave refiners with little choice.
The benchmark stock indices have managed to hold on to opening gains despite some initial selling pressure.
Join us as we follow the top business news through the day.
US proclamation to suspend work visas misguided: Nasscom
Business view on the latest US visa restrictions.
PTI reports: "Industry body Nasscom on Tuesday termed the work visa suspension proclamation as “misguided” and said this could be harmful to the US economy, possibly forcing more work to be performed offshore since the local talent is not available in the country.
The comments came after US President Donald Trump issued a proclamation to suspend issuing of H-1B visas - popular among Indian IT professionals - along with other foreign work visas for the rest of the year, aimed at helping millions of Americans who have lost their jobs due to the current economic crisis.
The proclamation that comes into effect on June 24 is expected to impact a large number of Indian IT professionals and several American and Indian companies who were issued H-1B visas by the US government for the fiscal year 2021 beginning October 1.
“The proclamation issued today barring the entry of certain non-immigrants into America and setting new conditions for others is misguided and harmful to the US economy...This new proclamation will impose new challenge and possibly force more work to be performed offshore since the local talent is not available,” Nasscom said in a statement.
It highlighted that the association’s members provide essential services to hospitals, pharmaceutical and biotech companies, state and local government agencies, financial institutions, technology and communications firms, grocers, manufacturers, and thousands of other businesses across the US.
“Highly skilled non-immigrants are playing critical roles in the delivery of these services and the development of these services and products.
Without their continued contributions to the US economy, the economic pain would worsen, industry would slow, and the timeline for a treatment and cure of COVID-19 would lengthen,” Nasscom said.
It added that those on H-1B and L-1 visas pay taxes and contribute to their communities and to local economies in many ways as well."
‘Border tensions may deflect India from reforms’
Fitch Ratings on Monday said the ongoing border tensions with China does not immediately impact India’s credit profile, but may distract the government from implementing reforms.
Fitch Ratings director (Sovereign Ratings) Thomas Rookmaaker said the government has announced reforms to improve growth going forward and a strong GDP growth is important to cut down public debt.
“The announcement of reforms could lift growth in the medium term and that’s where geo-politics comes in.
A tale of two lockdowns
RBI bars Yes Bank from paying interest on tier-2 bonds
The controversial Tier-2 bonds are back in the news once again for the wrong reasons.
PTI reports: "The Reserve Bank has asked private sector lender Yes Bank not to pay interest on tier-II bonds due on June 29 as its capital levels are below the mandatory threshold.
Interest payments on the bank’s 10.25 per cent unsecured non-convertible upper tier-II bonds issued in 2012 is due on June 29 and the city-based lender had sought the RBI nod to honour the same.
“The Reserve Bank of India has expressed its inability to accede to the bank’s request for payment of interest due as on June 29, 2020, since the bank does not meet the minimum capital requirements currently. Therefore, the bank would be unable to pay interest/coupon on the said upper tier II bonds which is due for payment on June 29, 2020,” the bank informed the exchanges on Friday.
As per the June 25, 2012 memorandum at the time of issue of the bonds, the interest due will be accumulated and paid later once the bank complies with stipulated regulatory requirements.
”....the specific features of the instrument require debt servicing to be linked to the bank meeting regulatory norms on capital adequacy, its managing director and chief executive Prashant Kumar said.
Asserting that the bank has adequate liquidity to meet all its obligations, Kumar said the coupon on these bonds is cumulative in nature and any unpaid sum will become payable once the bank meets minimum regulatory capital ratio.
The bank’s total capital adequacy ratio had stood at 8.5 per cent, including the tier-I ratio at 6.5 per cent as of March 31 this year. The regulatory requirement is to maintain the tier-I ratio above 8.875 per cent.
The bank, which had to be bailed out by a SBI-led consortium of lenders in March, is reportedly looking at a Rs 10,000-crore capital raise from new investors at present and already has enabling resolutions to raise up to Rs 15,000 crore."
Sensex jumps over 200 points in early trade; Nifty tops 10,300
The benchmark indices have opened with further gains this morning after a significant rally yesterday.
PTI reports: "Equity benchmark Sensex jumped over 200 points in early trade on Tuesday following positive cues from global markets and sustained foreign fund inflows.
After touching a high of 35,116.22 in early trade, the 30-share index was trading 145.74 points, or 0.42 per cent, up at 35,057.06.
Similarly, NSE Nifty rose 46.15 points, or 0.45 per cent, to 10,357.35.
IndusInd Bank was the top gainer in the pack, rallying around 5 per cent, followed by Bajaj Finance, PowerGrid, NTPC, Nestle India, Titan and Bajaj Auto.
On the other hand, TCS, Asian Paints, M&M and Infosys were among the laggards.
In the previous session, the BSE barometer settled 179.59 points, or 0.52 per cent, higher at 34,911.32, while the broader Nifty rose 66.80 points, or 0.65 per cent, to close at 10,311.20.
On a net basis, foreign institutional investors bought equities worth Rs 424.21 crore in the capital market on Monday, provisional exchange data showed.
According to analysts, positive sentiment in global stocks and unabated foreign fund inflows supported the domestic equity market.
On the global front, bourses in Shanghai, Hong Kong, Seoul and Tokyo were trading with gains in early deals.
Stock exchanges on Wall Street ended on a positive note in overnight session.
International oil benchmark Brent crude futures fell 0.30 per cent to USD 42.95 per barrel."
India can reduce trade deficit with China by $8.4 bn: study
India can potentially reduce its trade deficit with China by $8.4 billion over FY21-22, which is equivalent to 17.3% of the deficit with China and 0.3% of India’s GDP, Acuité Ratings & Research said in a study.
This can be achieved by the rationalisation of just a quarter of India’s imports from that country in select sectors where India has well-established manufacturing capabilities, Acuité said.
Without any significant additional investments, the domestic manufacturing sector can substitute 25% of the total imports from specified sectors in the first phase, it added.
Suman Chowdhury, chief analytical officer, Acuité Ratings & Research, said, “With an import of $65.1 billion and export of $16.6 billion, India recorded a trade deficit of $48.5 billion with China in FY20. While imports from China have moderately declined by 15% since FY18 due to imposition of anti-dumping duties on some products, the dependence of the domestic economy on Chinese imports remains high with direct contribution to over 30% of India’s aggregate trade deficit.”
Petrol rate hiked 20 paise, diesel 55 paise, in 17th consecutive price hike
The rise in the price of domestic fuels continues as global oil prices enter a bull run and the government tries to shore up revenues.
PTI reports: "Petrol price on Tuesday was hiked by 20 paise per litre and diesel by 55 paise as the oil companies increased prices for the 17th day in a row that took the cumulative increase to a steep Rs 8.5 and Rs 10.01 per litre, respectively.
Petrol price in Delhi was hiked to Rs 79.76 per litre from Rs 79.56, while diesel rates were increased to Rs 79.40 a litre from Rs 78.55, according to a price notification of state oil marketing companies.
Rates have been increased across the country and vary from state to state depending on the incidence of local sales tax or value added tax.
The 17th daily increase in rates, since oil companies on June 7 restarted revising prices in line with costs after ending an 82-day hiatus in rate revision, has taken diesel prices to fresh highs. Petrol price too is at a two-year high."