After ending a 5-day winning streak yesterday, stocks are back in the green again today with modest gains at open.
Signs of a brewing economic war between India and China continue to hit the news even as the countries' troops deescalate at the borders.
Join us as we follow the top business news through the day.
Sensex rallies 409 points; Nifty tops 10,800-level
It was a great day at the bourses with the benchmark indices up over 1% by the end of trading.
PTI reports: "Resuming its upmove after a day’s breather, equity benchmark Sensex rallied 409 points on Thursday, tracking gains in index-heavyweights HDFC twins and Reliance Industries amid positive cues from overseas markets.
After touching a peak of 36,806.30 during the day, the 30-share index settled 408.68 points, or 1.12 per cent, higher at 36,737.69.
The NSE Nifty jumped 107.70 points, or 1.01 per cent, to finish at 10,813.45.
Bajaj Finance was the top gainer in the Sensex pack, spurting around 4 per cent, followed by SBI, Tata Steel, HDFC, Bajaj Finserv, HCL Tech and M&M.
On the other hand, ONGC, Tech Mahindra, TCS, HUL and Maruti were among the laggards.
According to Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi, Indian markets opened on a positive note following upbeat Asian cues as positive economic data from China added to the momentum.
During afternoon session, the benchmarks scaled crucial levels as sentiments remained firm, he added.
Bourses in Shanghai, Hong Kong, Tokyo and Seoul ended with significant gains.
Stock exchanges in Europe too opened on a positive note.
Meanwhile, international oil benchmark Brent crude futures inched up 0.05 per cent to USD 43.31 per barrel.
On the currency front, the rupee settled 3 paise higher at 74.99 against the US dollar."
India’s GDP to contract by 3% in FY21: BofA
Yet another estimate of the economic impact of the coronavirus-induced lockdown.
PTI reports: "India’s GDP will contract by 3 per cent in FY21 because of the coronavirus pandemic, assuming the economy is opened up fully from next month, a foreign brokerage said on Thursday.
BofA Securities also said the RBI will monetise the fiscal deficit through purchase of government bonds of up to USD 95 billion through open market operations, and its revaluation reserves of USD 127 billion may also be used to recapitalise state-run banks.
Economists have been sharply cutting their growth forecasts for FY21 because of the impact of the pandemic and all watchers, including the RBI, now believe the Indian GDP will contract this fiscal, with some estimates ranging up to 7 per cent negative growth.
BofA Securities’ base case estimate is for 3 per cent contraction with the assumption of the economy opening up fully from mid-August, which may go up to 5 per cent if the crisis prolongs.
Its India economist Indranil Sen Gupta told reporters that his estimate is among the more optimistic ones and differs from others on the likelihood of the COVID-19 impact, which he said is a health emergency which no one can predict with certainty at present.
He said the strict lockdown in April and May had a 3 percentage points impact on the annual GDP, and subsequently with the limited opening up, the monthly impact has gone down to 1 percentage point per month.
India’s GDP growth decelerated to 4.2 per cent in 2019-20, the weakest in over a decade. Gupta said the growth potential is over 7 per cent.
GDP growth will come in at 9 per cent in FY22 on the lower base, he said, adding that for two fiscal years (FY21 and 22), the growth will come at an average of 3 per cent, which would mean that the COVID-19 pandemic has set Indian economy back by a year.
The biggest strength for India at present is the over USD 500 billion in forex reserves which have been accumulated by the RBI over some months, and it is due to this kitty that the country is not being bracketed with other emerging economies by the markets at present, he said."
Rupee gains 3 paise to close at 74.99 against US dollar
The rupee has ended quite flat for the day after opening with significant gains in the morning.
PTI reports: "The rupee pared some of its initial gains and settled 3 paise higher at 74.99 (provisional) against the US dollar on Thursday tracking weakness in the greenback and gains in the domestic equity market.
Forex traders said positive domestic equities and weak US currency supported the local unit, while foreign fund outflows and concerns over rising COVID-19 cases weighed on investor sentiment.
The rupee opened at 74.94 against the US dollar, but lost ground and settled for the day at 74.99 against the US dollar, up 3 paise over its previous close.
It had settled at 75.02 against the greenback on Wednesday.
In a volatile trading session, the rupee touched an intra-day high of 74.91 and a low of 75.07 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.02 per cent to 96.40.
The 30-share BSE benchmark Sensex was trading 344.90 points higher at 36,673.91 and broader NSE Nifty rose 87.95 points to 10,793.70.
Foreign institutional investors were net sellers in the capital market as they sold shares worth Rs 994.87 crore on Wednesday, according to provisional exchange data."
Indian-origin business leaders in U.S. back ‘Black Lives Matter,’ call for racial, gender justice
Indian-origin leaders of some of the biggest global companies came together on Wednesday to discuss diversity and their responses to the issues the Black Lives Matter (BLM) has highlighted.
The speakers at the virtual discussion were drawn from a list of Indians leading some of the biggest global corporations in 2020, put together by non-profit diaspora organisation Indiaspora. The panel, which coincided with the launch of the list, discussed responses of some leaders on the list to movements for racial and gender justice, climate change and responding to the pandemic.
“Being an immigrant, sometimes you think you’re brown and you understand black people. Well, you really don’t. Their lives are quite different,” Ravi Saligram, who heads consumer products company Newell Brands, said.
Planning significant investment, more hiring in India: Zoom
The popular video-calling app is planning to tap demand in the Indian market as Covid-19 changes workplace behavior.
PTI reports: "Popular video conferencing app Zoom is planning to make a significant investment in India over the next five years and ramp up hiring, a top company executive said as he sought to shed any links of Zoom with China ahead of competition from billionaire Mukesh Ambani’s just launched JioMeet.
“Some of the misconceptions are disheartening, especially those about Zoom and China,” Zoom’s president of product and engineering Velchamy Sankarlingam said in a blog post.
“We do recognise that as we continue to introduce ourselves to the Indian market, there has been some confusion about the facts as it relates to Zoom. We want to work through these“.
Zoom, he said, is a US company that is publicly traded on the NASDAQ.
Zoom had seen spurt in users since COVID-19 lockdown but now faces competition from JioMeet, which has already seen about one million downloads within a week of launch on its promise of providing unlimited free video calling.
Zoom’s platform offers 40 minutes of video calling for free.
In a blog on Medium, Sankarlingam said India is and will continue to be an important market for Zoom, and that the company is excited to build on the exciting opportunities it sees in the region.
“We also have plans for significant investment in the country over the next five years and beyond, including expanding our footprint and hiring more top talent in the region,” he said.
He added that Zoom is helping Indian businesses, government agencies, communities, school teachers, and other users stay connected."
Scarcity of shade hurts Indian street vendors' income, health
An interesting study on how the felling of trees affects the economics of street vending.
Reuters reports: "Street vendors in India are suffering from lower earnings and ill health as they lose access to shade in cities where trees are felled to make way for construction, researchers said on Thursday.
As deadly heatwaves become more frequent in tropical countries such as India, loss of shade can severely affect those who live and work on the streets, according to a study by researchers at India's Azim Premji University.
The study of the southern Indian city of Hyderabad showed that women and new migrants, as well as vendors in poorer neighbourhoods are at greater risk of being denied shade.
“As the primary day-time occupiers of urban streets, in hot cities the importance of wooded streets becomes fundamental in ensuring a comfortable, liveable work environment,” co-authors Sukanya Basu and Harini Nagendra wrote.
But “street vendors are largely left out of considerations of urban ecological planning, despite being among the most affected by the availability of shaded streets,” they said in the study published in the Landscape and Urban Planning journal.
Green spaces help reduce the so-called urban heat-island effect - under which cities are often several degrees warmer than nearby rural areas, help clean the air and replenish groundwater, according to environmentalists.
City dwellers in leafy neighbourhoods also tend to live longer, according to a study last year by the Barcelona Institute for Global Health.
But booming Indian cities are losing green spaces rapidly as more land is needed to build metro lines and apartment blocks.
The scarcity of urban green spaces worldwide became clear as the coronavirus pandemic forced lockdowns, triggering a rush to parks for exercise and to improve well-being.
In Hyderabad, where summer-time temperatures routinely soar above 40 degrees Celsius (104 degrees Fahrenheit), construction often results in the felling of trees and clearance of vendors, as does the beautification of public spaces.
For street vendors, trees help extend the life of the products they sell and draw more customers, besides offering respite from the heat, Basu said.
“Access of street vendors to public green spaces and their right to shade is critical in the context of the right to the city,” she told the Thomson Reuters Foundation.
But gentrification results in unequal access to shade, she added.
Wealthier, residential neighbourhoods in Hyderabad, a technology hub, had fewer vendors and more trees on the streets, while low-income and congested neighbourhoods with more vendors had fewer trees."
Yes Bank shares gain over 5% on fund raising announcement
News of further fund infusion into the troubled bank is getting some investors excited.
PTI reports: "Shares of Yes Bank on Thursday gained over 5 per cent after the company said it has filed an offer document to raise up to Rs 15,000 crore through issuance of fresh equity shares in its further public offering (FPO). The stock rose 5.36 per cent to Rs 27.50 on BSE. At NSE, it gained 5.56 per cent to Rs 27.50.
The offer will open on July 15 and close on July 17.
Earlier this week, Yes Bank had received an approval from the capital-raising committee (CRC) of its board to raise funds through the offering.
“The bank has filed a red herring prospectus dated July 7, 2020 in connection with the offer, with the Registrar of Companies, Maharashtra at Mumbai,” Yes Bank said in a regulatory filing.
The lender said the offer size of the FPO is Rs 15,000 crore, by way of a fresh issue of equity shares, including an employee reservation portion of up to Rs 200 crore."
Cipla’s pricing for Remdesivir among lowest
Drugmaker Cipla Ltd. has priced its generic version of Remdesivir, Cipremi, at ₹4,000 rupees per 100 mg vial, according to several sources, making it among the lowest priced versions of the COVID-19 treatment available so far globally.
Cipla had earlier said pricing would not exceed ₹5,000. Sovereign Pharma, which is manufacturing and packaging the drug, which will be available only through government and hospitals, said it had dispatched the first batch.
Gold holds above $1,800 level as virus casts long shadow
The continuing rise in coronavirus cases is helping hold up the price of gold.
Reuters reports: "Gold held steady above the key $1,800/oz level on Thursday, as worries over mounting COVID-19 cases offset hopes of a swift global economic recovery.
Spot gold was little changed at $1,808.44 per ounce by 0243 GMT, after rising to its highest level since September 2011 at $1,817.71 on Wednesday. U.S. gold futures were flat at $1,819.80.
Traders are seen a little exhausted after the metal cleared the $1,800 level, “but no one seems eager to abandon this trade yet”, said Edward Moya, senior market analyst at broker OANDA.
“Gold is looking very bullish both in the short- and long-term... It has enough catalysts to take it to record territory before the end of the year,” said Moya.
Global coronavirus cases reached more than 12 million on Wednesday, with more than half a million dead.
Keeping alive worries over the economic fallout from the pandemic, U.S. Federal Reserve officials on Wednesday suggested the recovery in the world's largest economy may be stalling.
Meanwhile, Britain's finance minister promised an additional $38 billion to head off an unemployment crisis.
Stimulus tends to boost gold, which is viewed as a hedge against inflation and currency debasement.
Providing further support to gold, the dollar traded near multi-week lows.
Reflecting strong investor demand for the metal, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.3% to 1,182.11 tonnes on Wednesday."
The mania in Chinese stocks
Rupee rises 11 paise to 74.91 against US dollar in early trade
The positive sentiment in equities has brushed off on the rupee.
PTI reports: "The rupee appreciated 11 paise to 74.91 against the US dollar in early trade on Thursday tracking weakness in the greenback and gains in the domestic equity market.
Forex traders said positive domestic equities and weak US currency supported the local unit, while foreign fund outflows and concerns over rising COVID-19 cases weighed on investor sentiment.
The rupee opened at 74.94 against the US dollar, then gained further ground and touched 74.91 against the US dollar, up 11 paise over its previous close.
It had settled at 75.02 against the greenback on Wednesday.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.17 per cent to 96.26.
The 30-share BSE benchmark Sensex was trading 297.05 points higher at 36,626.06 and broader NSE Nifty rose 76.80 points to 10,782.55.
Foreign institutional investors were net sellers in the capital market as they sold shares worth Rs 994.87 crore on Wednesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 0.02 per cent to USD 43.30 per barrel.
Meanwhile, the number of cases around the world linked to the disease has crossed 1.20 crore and the death toll has topped 5.48 lakh.
In India, the death toll due to COVID-19 rose to 21,129 and the number of infections spiked to 7,67,296, according to the health ministry."
Equity Mutual Funds inflows tumble 95% in June on profit booking: AMFI
Inflows into equity mutual funds (MFs) slumped 95 % to a little more than ₹240 crore in June as investors pulled out from large and multi-cap funds due to profit booking.
This is the third consecutive monthly decline in inflows into equity MFs, Association of Mutual Funds in India (AMFI) data showed on Wednesday.
Overall, the MF industry witnessed a net inflow of ₹7,265 crore across all segments last month, much lower than the ₹70,813 crore in May, primarily due to outflow from liquid funds.
Inflow into equity and equity-linked open ended schemes was at ₹240.55 crore in June as against ₹5,256 crore in May, translating into a decline of 95%.
Sensex jumps over 200 points in early trade; Nifty tests 10,750
A sound start to the day for stocks.
PTI reports: "Equity benchmark Sensex jumped over 200 points in early trade on Thursday tracking gains in financial stocks amid positive cues from global markets.
After touching a high of 36,541.53 in opening session, the 30-share index was trading 190.57 points, or 0.52 per cent, higher at 36,519.58. The NSE Nifty was up 54.70 points, or 0.51 per cent, at 10,760.45.
Tata Steel was the top gainer in the Sensex pack, rising around 2 per cent, followed by IndusInd Bank, Bajaj Finance, ICICI Bank, M&M, SBI and Axis Bank.
On the other hand, Maruti, Reliance Industries, TCS and Titan were among the laggards.
In the previous session, the BSE barometer ended 345.51 points, or 0.95 per cent, lower at 36,329.01, and the broader Nifty shed 93.90 points, or 0.87 per cent, to close at 10,705.75.
Foreign institutional investors were net sellers in the capital market on Wednesday, offloading equities worth Rs 994.87 crore, provisional exchange data showed.
According to traders, market participants followed optimism in global equities, shrugging off concerns over rising number of COVID-19 cases and its impact on economic recovery.
The number of cases around the world linked to the disease has crossed 1.20 crore and the death toll has topped 5.48 lakh.
In India, the number of infections spiked to 7.67 lakh and the death toll rose to 21,129.
Bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading with gains.
Stock exchanges on Wall Street too ended on a positive note in overnight session.
Meanwhile, international oil benchmark Brent crude futures slipped 0.05 per cent to USD 43.27 per barrel."
India again imposes anti-dumping duty on certain types of measuring tapes imported from China
The economic war between India and China continues to heat up despite deescalation at the borders.
PTI reports: "India on Wednesday again imposed definitive anti-dumping duty on certain types of measuring tapes from China for five years to guard domestic manufacturers from cheap imports.
The duty was imposed on ‘steel and fibre glass measuring tapes and their parts and components’ after the commerce ministry’s investigation arm Directorate General of Trade Remedies (DGTR) recommended for continuation of the duty.
The DGTR in its sunset review probe has concluded that there is a continued dumping of the goods from China, and the imports are likely to enter the Indian market at dumped prices in the event of expiry of the duty.
The department of revenue in a notification said it seeks “to levy definitive anti-dumping duty on imports of steel and fibre glass measuring tapes and their parts and components originating in, or exported from, China for a period of five years“.
An anti-dumping duty of USD 1.83 per kg will be imposed on some companies, while others will attract USD 2.56 per kg.
“The anti-dumping duty imposed under this notification shall be effective for a period of five years (unless revoked, superseded or amended earlier)...and shall be paid in Indian currency,” it added.
The department had imposed the duty first time on July 9, 2015, for five years."
Downward revision of growth by agencies shows lockdown impact; Jun data points to uptick: EY
Analysts continue to be uncertain about the economic picture going forward.
PTI reports: "The sharp downward revision in growth projections by various national and international agencies indicates the impact of the coronavirus-induced lockdown and inadequate stimulus package, EY said on Wednesday adding that June economic indicators show an uptick in activity.
EY’s current assessment of India’s 2020-21 real gross value added (GVA) growth is 1.9 per cent provided that India sticks to its infrastructure funding plans.
Stating that high-frequency indicators signal slow but steady turnaround, EY said PMI manufacturing and services index, power consumption and forex reserves showed improvement in June. Also, GST collection increased to Rs 90,917 crore in June, from Rs 62,009 crore and Rs 32,294 crore in May and April, respectively.
Speaking at the EY webinar on ‘Rejuvenating Growth - Economic and Trade Policy Pathways’, EY Indian Chief Policy Advisor D K Srivastava said India’s fiscal stimulus at 1.2 per cent of GDP is the third lowest among the major economies of the world, but hoped that as more fiscal space gets created there could be another round of stimulus towards the later part of the financial year.
The growth projections for current year by various global and domestic agencies indicate a sharp contraction ranging from (-)3.2 per cent to (-)6.8 per cent. The more recent the projection, the steeper is the predicted contraction, EY said.
While the World Bank had projected Indian economy to contract 3.2 per cent, the International Monetary Fund (IMF) and Asian Development Bank (ADB) pegged the growth at (-)4.5 per cent and (-)4 per cent, respectively. S&P and Fitch has projected a 5 per cent contraction, while Nomura said growth would be (-)5.2 per cent in 2020-21.
Among the domestic agencies, SBI and CARE Ratings have projected economy to contract by 6.8 per cent and 6.4 per cent, respectively, while India Ratings pegged it at 5.3 per cent.
Indian economic growth stood at an estimated 4.2 per cent in 2019-20."