BQuick On Aug. 13: Top 10 Stories In Under 10 Minutes

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

1. India’s Retail Inflation Remains Elevated

Retail inflation in India rose in July as price increases of some food articles and transportation costs remained high.

• Consumer Price Index inflation stood at 6.93% in July, compared to a revised estimate of 6.23% in June 2020, according to data released by the government.
• Inflation in food and beverages rose to 8.71% in July.
• At over 6%, inflation continued to remain just above the Monetary Policy Committee’s tolerance band of 4 (+/-2)%, for the fourth straight month since April, creating a stagflation like scenario where inflation is high despite a collapse in growth.

Break-up of the inflation data suggests that inflation in the vegetables and pulses categories was higher.

Eicher Motors Ltd. reported a quarterly loss as the coronavirus pandemic disrupted everything from production to sales of automobiles, dealing a fresh blow to the already struggling sector.

• The maker of Royal Enfield motorcycles reported a net loss of Rs 55 crore.
• Revenue fell 66% to Rs 818 crore.
• Ebitda margin contracted to 0.5% from 25.8%.

Eicher said initial consumer sentiment since the restart of operations has been “encouraging”.

GAIL (India) Ltd.'s quarterly profit dropped as other income fell and the gas distributor had reported a one-time benefit in the corresponding period a year earlier.

• Net profit slumped 92% quarter-on-quarter to Rs 255 crore.
• Revenue dropped 32% to Rs 12,087 crore.
• Ebitda fell 74% sequentially to Rs 622.5 crore.

More details on the results here.

6. Another Flat Session For Nifty

Indian equity markets consolidated for the second straight day with benchmark indices barely moving from the levels at which they ended on Wednesday.

• The S&P BSE Sensex ended 0.15% lower at 38,310 while the NSE Nifty 50 index ended unchanged at 11,300.
• As of closing today, both Sensex and Nifty are up over 0.7% on a weekly basis.
• Among the sectoral indices, Auto, Media and Metal stocks outperformed.
• Pharma and PSU banks were the laggards in today's session.
• Broader markets outperformed in today's trade. The midcap index ended with gains of 1.7% while the smallcap index ended 0.8% higher.

Follow the day’s trading action here.

Indian benchmarks have rallied despite muted economic forecasts, with most investments toward larger companies. Valuations are higher than reasonable, once again. But this, according to Sushant Bhansali, isn’t the time to have a low equity allocation.

Instead, it’s a good time to remain invested in the market. Watch the full conversation to know why.

Technology shares rose while the broader U.S. equity market was mostly lower as investors mulled the stalemate in stimulus negotiations and signs of an economic recovery.

• The Nasdaq Composite gained and the S&P 500 opened in the red a day after briefly surpassing the record closing high reached before the coronavirus pandemic.
• Adding to optimism was a report showing that weekly jobless claims dropped below 1 million for the first time since March.
• The Bloomberg Dollar Spot Index decreased 0.3% to 1,175.14, the lowest in a week on the largest dip in more than a week.
• The yield on 10-year Treasuries climbed one basis point to 0.69%, reaching the highest in more than seven weeks on its fifth straight advance.

Get your fix of global markets update here.

7. What’s Driving Growth For Indian Pharma

While Indian pharmaceutical firms saw their business grow in the quarter ended June aided by increased demand amid the Covid-19 outbreak, the bulk drug segment was the outperformer.

• The active pharmaceutical ingredient business, or raw materials that go into making medicines, benefited from the curbs on imports from China after a border scuffle left around 20 Indian soldiers and an unknown number of Chinese military personnel dead in June.
• With China at present supplying more than two-thirds of the bulk drugs that Indian pharma firms use, the companies are now looking to make the most of the disruption in the global supply chain and the shift away from the world’s second-largest economy by ramping up domestic production.
• Cadila Healthcare Ltd.’s API business grew the most in the first quarter, followed by Dr. Reddy’s Laboratories Ltd. and IPCA Laboratories Ltd.

Even larger companies have seen their API business grow in the last two years and expect the trend to continue.

8. Modi Emphasises On Tax Reforms

Prime Minister Narendra Modi urged capable citizens to pay taxes as he introduced a mechanism for faceless assessment and appeals, and a taxpayers’ charter to reduce litigation, simplify tax filing and prevent harassment of honest taxpayers.

• Emphasising the need for a simpler tax regime, the prime minister said India has seen a substantial reduction in the number of tax scrutiny cases.
• The proportion of tax returns scrutinised every year has fallen by a fourth—from 0.94% in 2012-13 to 0.26% in 2018-19, he said.
• But the tax base, he said, continues to be low. Of a population of 130 crore, only 1.5 crore individuals file taxes, Modi said.
• While rolling out the reforms, he urged taxable citizens who are currently not in the tax net but can pay to come forward and contribute to nation-building by being honest, compliant and keeping accurate records.

The focus of PM Modi’s address was on three structural tax reforms. Find out what.

9. Lies, Damned Lies, Covid-19 Statistics, And A Wrecked Economy

India’s policymaking babus are doing immense damage with stop-start, go/no-go, whimsical, circuit-breaking rules, writes Raghav Bahl.

• Unfortunately, our politicians and bureaucrats are not the most intelligent data-readers.
• They are certainly not the most calibrated or sober action-takers.
• When confronted with contrarian findings, they panic and take knee-jerk actions.
• The decisions are made and unmade in response to contrarian stats which can be read both ways, good or bad, depending on your mood and time of day.

This dislocates a fragile recovery even before it has taken roots.

10. Covid-19: India Now Has Fourth Highest Death Toll

Coronavirus infections in India continued to race ahead with the country reporting its biggest single-day spike in new Covid-19 cases.

• India added nearly 67,000 cases in a matter of 24 hours, taking the total tally to 23.9 lakh.
• This includes over 47,000 deaths and more than 16.9 lakh patients who have recovered.
• India’s Covid-19 death toll grew to 47,033. It is now only behind U.S., Brazil and Mexico in the overall number of Covid-related deaths.
• Today marked the sixth time that India reported over 60,000 cases in a day.

Track news and developments around the outbreak in India here.

At least 104 doctors in India died due to coronavirus infections, a study has found, as the pathogen’s spread accelerates across the world’s second-most populous country.

• More than half these doctors were younger than 60, according to a study by Rajeev Jayadevan, a gastroenterologist and president of the professional organisation representing private doctors in the southern Indian city of Cochin.
• The paper was posted in an online forum for prepublication research and has not been peer reviewed.

That number is much larger than the physicians that have died in larger economies like U.S. or China.