The benchmark stock indices are down marginally at the moment after opening the day on a flat note.
Join us as we follow the top business news through the day.
Oil skids after Saudi price cuts, demand optimism fades
The oil markets continue to be dominated by the bears.
Reuters reports: "Oil prices dropped more than 1% on Monday after earlier hitting their lowest since July as Saudi Arabia made the deepest monthly price cuts for supply to Asia in five months while optimism about demand recovery cooled amid the coronavirus pandemic.
Brent crude was at $42.21 a barrel, down 45 cents or 1.1% by 0439 GMT, after earlier sliding to $41.51, the lowest since July 30.
U.S. West Texas Intermediate crude skidded 51 cents, or 1.3%, to $39.26 a barrel after earlier dropping to $38.55, the lowest since July 10.
The world remains awash with crude and fuel despite supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and their allies, known as OPEC+, and government efforts to stimulate the global economy and oil demand. Refiners have reduced their fuel output as a result, causing oil producers such as Saudi Arabia to cut prices to offset the falling crude demand.
“Sentiment has turned sour and there might be some selling pressure ahead,” Howie Lee, an economist at Singapore's OCBC bank said.
The Labor Day holiday on Monday marks the traditional end of the peak summer demand season in the United States and that renewed investors' focus on the current lacklustre fuel demand in the world's biggest oil user.
China, the world's biggest oil importer which has been supporting prices with record purchases, slowed their intake in August, according to customs data on Monday.
“Abundant supplies, fears of loosening OPEC+ compliance, the end of the U.S. driving season and stale long positioning have all combined to erode confidence in oil,” OANDA's senior market analyst Jeffrey Halley said in a note.
The world's top oil exporter Saudi Arabia cut the October official selling price for Arab Light crude it sells to Asia by the most since May, indicating demand remains weak. Asia is Saudi Arabia's largest market by region.
In August, the OPEC+ group eased production cuts to 7.7 million barrels per day after global oil prices improved from historic lows caused by the coronavirus pandemic cutting fuel demand.
Oil is also under pressure as U.S. companies increased their drilling for new supply after the recent recovery in oil prices.
U.S. energy firms last week added oil and natural gas rigs for the second time in the past three weeks, according to a weekly report by Baker Hughes Co on Friday."
Airtel launches ‘unlimited’ broadband plans starting at ₹499, bundles OTT apps, STB
Telecom operator Bharti Airtel on Sunday launched ‘unlimited’ category broadband plans starting at ₹ 499 per month which will come bundled with subscription to video entertainment apps and high definition set-top box (STB) against refundable deposit.
Airtel has enhanced high speed data usage limit (fair usage policy) by up to 23 times in the revised plans to 3,500 gigabytes.
The move from Airtel comes within a week of its competitor Reliance Jio revising broadband plans with unlimited data usage and bundling subscription fee of video entertainment apps in them.
The new and revised plans will be rolled out September 7 onwards across 125 cities where the company has operations, and in new cities where it will gradually expand its footprint, Airtel said in a statement.
The bubble in Big Tech
Rupee slips 4 paise to 73.18 against US dollar in early trade
The rupee which experienced increased volatility last week has started this week on a flat note.
PTI reports: "The rupee slipped 4 paise to 73.18 against the US dollar in early trade on Monday as strengthening US dollar and muted opening in domestic equities weighed on the local currency.
At the interbank forex market, the rupee was trading in a narrow range. It opened at 73.17 against the American currency, lost further ground and was trading at 73.18, down 4 paise from its previous close.
The rupee had closed at 73.14 against the US dollar on Friday.
“RBI forex reserves rose to a new record high of USD 541.4 billion. The rupee strengthened on break of 73.25 on Friday. We expect the 72.50-73.50 range to hold this week,” said Abhishek Goenka, Founder and CEO, IFA Global.
Goenka further said that “developments on the Indo-China border will have to be closely tracked. Any escalation poses up side risks to USD-INR“.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.17 per cent to 92.87.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 42.60 points lower at 38,314.58, and the broader NSE Nifty fell 12.40 points to 11,321.45.
Foreign institutional investors were net sellers in the capital market as they sold shares worth Rs 1,888.78 crore on Friday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 1.08 per cent to USD 42.20 per barrel."
RBI loan restructuring plan | A difficult choice for borrowers
The moratorium offered by banks and other institutional lenders ended last month. However, the economic disruption caused by the pandemic and the resultant income and job loss continue to a large degree.
In this scenario, the Reserve Bank of India (RBI) has announced a loan restructuring plan to offer relief to impacted borrowers, who may struggle to repay their debt over the short term, at least.
This plan is unique in many ways. Unlike the earlier restructuring windows with a largely open-ended structure, the latest resolution framework has a strict entry barrier and a clearly defined timeline for the implementation of the scheme.
Also, unlike the moratorium on term loans that was open for all, only those borrowers whose income has been adversely impacted due to the pandemic and repayment capacity seriously restricted would be eligible for the loan restructuring scheme offered by the lender.
Indian shares flat, Vodafone Idea news awaited
Stocks seem to losing steam as the surge in virus cases adds to economic uncertainty.
Reuters reports: "Indian shares were subdued on Monday, as broader Asian markets were on the defensive after a continued Wall Street selloff in technology stocks, while investors awaited an announcement from debt-laden Vodafone Idea Ltd later in the day.
The blue-chip NSE Nifty 50 index was down 0.04% at 11,330.35, while the benchmark S&P BSE Sensex fell 0.02% to 38,333.02 as of 0358 GMT.
Japan's Nikkei fell 0.3% and China's blue-chip index slipped 0.2% on concerns of high valuations after Wall Street closed lower on Friday as a selloff continued in technology stocks.
In Mumbai, Vodafone Idea rose as much as 10%. The company has scheduled a media announcement at 0630 GMT later in the day.
On Friday, the carrier said it would raise up to 250 billion rupees ($3.41 billion) in fresh funds as it tries to pay off hefty dues it owes to the government.
The Nifty auto index was up 0.57%. India's commerce minister said on Friday the country is open to raising duties on auto imports to boost local production."
Small positive growth may not be ruled out in FY21, says former RBI Governor Rangarajan
A small positive economic growth in 2020-21 may not be ruled out as sectors like agriculture and essential goods and services were fully operational in the first quarter despite coronavirus-induced lockdown, according to a paper co-authored by former RBI Governor C. Rangarajan.
Mr. Rangarajan and India EY India chief policy advisor D.K. Srivastava in a paper titled ‘India’s Growth Prospects and Policy Options: Emerging from the Pandemic’s Shadow’ stated that the story of the Indian economy as it unfolds under the impact of COVID-19 is disquieting.
The paper noted that although many national and international agencies have projected a sharp contraction in the GDP in 2020-21, ranging from World Bank’s projection of 3.2% to SBI’s 6.8%, there are reasons to believe that the outcome may be better than these strong contractionary prospects.