BQuick On July 22: Top 10 Stories In Under 10 Minutes

Here is a roundup of the day’s top stories in brief.

1. Gold Breaches Rs 50,000 Mark

Gold and silver prices in India surged in tandem with a global rise in precious metals, as investors weigh the possibility of more stimulus measures by central banks and governments to overcome the impact of the Covid-19 outbreak.

• Gold one-month futures, which opened at Rs 49,931 per 10 grams on the MCX today, rose to a record of Rs 50,085 before cooling below the psychological mark.

• September futures of silver, meanwhile, surged to Rs 61,280 per 1 kilogram and then fell to Rs 59,370.

• “The most recent trigger for the spike in gold and silver prices is not safe haven demand, but rather currency debasement because of the stimulus measures being announced in Europe and the U.S.,” said Praveen Singh, associate vice president at Sharekhan Commodities Pvt.

Here are the other factors at play.

2. Orders Dry Up For L&T

Larsen & Toubro Ltd. reported a sharp decline in quarterly profit as new orders dried up and ongoing projects were disrupted following the nationwide coronavirus lockdown.

• Net profit fell 79% year-on-year to Rs 303 crore.

• The company would’ve reported a loss had it not been for an exceptional gain of Rs 224.7 crore and deferred tax reversal of Rs 307 crore during the quarter.

• New orders fell 39% over last year to Rs 23,574 crore.

Find out how the pandemic impacted business at India’s largest infrastructure firm.

3. India’s Economic Recovery Curve Flattens

A rebound in economic activity after the lifting of stay-at-home restrictions has been followed by a flattening of the recovery curve. Since the start of July, concurrent indicators have been weakening as the nationwide lockdown has been replaced with localised curbs.

• After mobility and electricity generation, two other key indicators—rail freight and sales of petroleum products—are suggesting a peaking of the rebound in economic activity.

• As the virus spreads geographically, economic momentum is dipping again, Neelkanth Mishra, India equity strategist at Credit Suisse, said in a note dated July 22.

Read more to see what demand for fuel, workplace mobility and rail freight volumes tell about the economy.

4. Slight Improvement In Hiring Sentiment

Hiring sentiment improved in India after the lockdown curbs were relaxed, but remained way below the pre-pandemic levels, an industry-wide survey showed.

• The percentage of employers that are likely to continue hiring the same number of people as last year rose to 18% since rules started easing compared with 11% during the lockdown period, according to Teamlease’s Employment Outlook Report.

• That’s still significantly lower than the 97% hiring intent that was seen in India prior to March—when the outbreak took hold.

• Within Asia Pacific, India has so far recorded the highest level of hiring sentiment.

See which sectors are the most keen to hire right now.

5. Nifty’s Five-Day Streak Ends; U.S. Stocks Edge Higher

Indian equity markets took a breather after a five-day rally.

• S&P BSE Sensex ended 0.16% lower at 37,871.

• NSE Nifty 50 index ended 0.27% lower at 11,132.

• The media index and Nifty Bank index ended with gains of 0.5% each while the Auto, I.T. and realty indices ended with losses of over 1%.

Follow the day’s trading action here.

While challenges related to the Covid-19 pandemic and subsequent lockdowns persist, Envision Capital's Nilesh Shah expects business to get better in 2021 as individuals and corporates begin to adapt.

Watch the full interaction to see why Shah sees favourable risk-reward beyond 2020.

U.S. stocks looked for a fourth day of gains as investors weighed the likelihood for a new spending bill, corporate earnings and an escalation of tensions with China that could spill over into trade.

• The S&P 500 churned at a four-month high, with futures rebounding after retreating overnight on news that the U.S. ordered China’s Houston consulate to quickly close.

• Progress on combating the virus’s impact also contributed to sentiment. The U.S. reported more than 1,000 deaths Tuesday. Pfizer Inc. shares rallied after saying the government ordered up to 600 million doses of its vaccine candidate against Covid-19.

• Treasuries rose, while Silver continued its tear,climbing to the highest level in almost seven years.

Get your daily fix of global markets here.

6. Debating Bajaj Finance's ‘Flexi Loan’ Switch

Bajaj Finance Ltd., which reported quarterly earnings on Tuesday, threw in a twist. The non-bank lender took a substantial amount of term loans and converted them into a product called ‘flexi loans’. Among other features, these flexi-loans allow customers to defer repayments on the the principal amount for one to two years. Bajaj Finance charged a fee for the conversion.

• The product has existed for some time. It’s offered at a higher interest rate and the lender makes a good margin on it. The timing of the switch, however, raised some eyebrows.

• Should this be seen as a restructuring of loans? At its very core, restructuring is an exercise that allows for any change in repayment terms of an existing loan that may be stressed.

• Restructured loans are to be classified as non-performing, with some exceptions provided by the Reserve Bank of India, such as for loans to medium-sized businesses.

Should the switch be seen as an attempt to manage stressed loans? Brokerages are divided.

7. Has Covid-19 Accelerated The Shift Toward City Gas Distributors?

The city gas distribution sector has outperformed the Nifty in the first half of 2020, aided by margin expansion, strong balance sheets, and free cash flow profile, writes Niraj Shah.

• Going forward, volume growth would be a key determinant. How has Covid-19 altered that?

• Is Petroleum and Natural Gas Regulatory Board allowing further competition a big deal for city gas distributors?

• In post-Covid India, two forces are likely to define energy consumption. Together, do they make a compelling investment thesis?

8. UPI AutoPay Goes Live

The National Payments Corporation of India has added an auto-pay feature to Unified Payments Interface, allowing recurring payments via platforms built on UPI.

• UPI AutoPay will allow customers to set up electronic payment mandates for multiple use cases such as subscription services, utilities, insurance premium payments, loan installments and even mutual fund investments.

• Mandates can be set up with daily weekly, monthly or annually, which means it opens up an entire host of use-cases and applications,” Praveena Rai, chief operating officer at NPCI said at the launch of the service during the Global Fintech Fest.

• According to Dilip Asbe, managing director and chief executive officer of the NPCI, UPI AutoPay will not only benefit customers, but also merchants with an all new recurring payments experience.

Here's how the feature will work.

9. Covid-19: India's Tally Nears 12 Lakh; Antibody Anticlimax

India continued to witness a rise in coronavirus cases as the highly contagious pathogen spreads rapidly in the world’s second-most populous nation.

• The country added nearly 38,000 fresh cases in the last 24 hours, taking the total tally close to 12 lakh, according to the Health Ministry’s update as of 8 a.m.

• Of these, more than 7.5 lakh have recovered.

• The country reported 28,472 recoveries on Wednesday, the most number of patients discharged in a single day.

Track news and developments around the outbreak in India here.

Recovering from Covid-19 may not offer much lasting protection from future infections for those with only mild cases, according to a report that suggests caution regarding so-called herd immunity as well as the durability of vaccines.

• The correspondence in the New England Journal of Medicine outlined research on antibodies taken from the blood of 34 patients who had recovered after suffering mainly mild symptoms that didn’t require intensive care.

• Just two needed supplemental oxygen and received an HIV medication, and none were on a ventilator or getting Gilead Sciences Inc.’s remdesivir.

• The researchers found that antibody levels fell quickly, with a half-life of about 73 days between the two time frames. The loss of antibodies occurred more quickly than with SARS, an earlier type of coronavirus infection.

The antibody response is being closely studied by scientists worldwide for indications of how long-lasting immunity may be.

10. The Rant In The Resignation Letter

Both Jyotiraditya Scindia and I wrote resignation letters recently in which we used that seemingly anodyne phrase—“time to move on”—that is anything but neutral, writes Priya Ramani.

• I wonder if Scindia composed more revelatory letters in his head before opting for the “moving on” theme? I know I did.

• A resignation letter is not a declaration of independence.

• Neither is a statement of purpose, or a bare-all confessional.

• 25 years of receiving and sending resignation letters has taught me that it’s pointless to air your grievances in a tell-all rant.

Instead, this is what it should be.