The Nifty and the Sensex opened the day on a negative note after ending a choppy day of trading flat yesterday.
Government sources say that further trances of fiscal stimulus may be in store in the coming months to boost the economy.
Join us as we follow the top business news through the day.
The rise of socially responsible investing
Sensex ends 169 points higher after fag-end rally
Stocks staged a comeback in the last hours of the day after opening in the red.
PTI reports: "Rallying for the 10th straight session, equity benchmark Sensex ended 169 points higher on Wednesday, led by gains in financial stocks amid largely positive cues from global markets.
The 30-share BSE index opened on a weak note and gyrated over 600 points during the day. However, it gained ground in the last hour of the session to finish at 40,794.74, up 169.23 points or 0.42 per cent.
Similarly, the broader NSE Nifty rose 36.55 points or 0.31 per cent to 11,971.05.
Bajaj Finserv was the top gainer in the Sensex pack, rising around 4 per cent, followed by Bajaj Finance, ICICI Bank, IndusInd Bank, Tata Steel, Axis Bank, HDFC and SBI.
On the other hand, NTPC, ONGC, Tech Mahindra, PowerGrid, Infosys and HCL Tech were among the major laggards.
On the global front, bourses in Hong Kong and Seoul ended higher, while Shanghai and Tokyo were in the red.
Stock exchanges in Europe were trading on a positive note in early deals.
Meanwhile, international oil benchmark Brent crude was trading 0.09 per cent lower at USD 42.41 per barrel.
In the forex market, the rupee edged 4 paise higher to close at 73.31 against the US dollar."
India should resist misleading allure of domestic mkt; boost exports: Research paper
Word of caution from the former chief economic advisor.
PTI reports: "India should resist the misleading allure of the domestic market and should zealously boost exports, according to a research paper co-authored by former chief economic advisor Arvind Subramanian.
The paper titled ‘India’s Inward (Re)Turn: Is it Warranted? Will it Work?’ -- jointly authored by Subramanian and Pennsylvania State University professor Shoumitro Chatterjee -- said that India is turning inward, domestic demand is assuming primacy over export-orientation and trade restrictions are increasing, reversing a three-decade trend.
“Resisting the misleading allure of the domestic market, India should zealously boost export performance and deploy all means to achieve that.
”... abandoning export orientation will amount to killing the goose that lays golden eggs and indeed to killing the only goose laying eggs. Alas, to embrace atmanirbharta is to choose to condemn the Indian economy to mediocrity,” the paper noted.
Further, it said that the consensus to favour an inward orientation was emerging even before COVID-19 had struck India, reflected in increasing calls to atmanirbharta or self reliance.
This shift is based on three misconceptions that India’s domestic market size is big, India’s growth has been based on domestic not export markets, and export prospects are dim because the world is deglobalising, it noted.
The paper also said that India still enjoys large export opportunities, especially in labour-intensive sectors such as clothing and footwear, but exploiting these opportunities requires more openness and more global integration.
“Indeed, given constraints on public, corporate and household balance sheets, abandoning export orientation is akin to killing the only goose that can lay eggs,” it said.
The paper said that India’s real market size, defined as consumers with a modicum of purchasing power is not big.
“It is much smaller than the headline GDP number, much smaller than China’s, and only a small fraction of the world market. The reason is that India has many poor consumers, while the rich tend to be large savers, limiting their consumption,” it added.
Similarly, the prognosis that export prospects are dim because the world is deglobalising is overly pessimistic, the paper pointed out.
To begin with, it is unclear whether the world is really deglobalising, at least in services. Even if it is, India’s export share is so small-even smaller than Vietnam in manufacturing exports-that its exports could grow rapidly by gaining market share, according to the paper.
In particular, the paper said that India has major unexploited opportunities in low-skill manufacturing and services, which it could exploit in the post-COVID-19 environment where firms are looking to exit China and diversify their sources of supply.
“Meanwhile, protectionism is unlikely to succeed as an export strategy because exploiting the big opportunities in the key labour-intensive sectors requires more openness and more global integration, as the experience of China and Vietnam have shown,” it said."
Recalibrate response to give direct relief and spending support: IMF to India
The International Monetary Fund (IMF) has projected the Indian economy to grow by -10.3% ( a contraction) in the current fiscal year – a 5.8 percentage point downward revision of its June forecast. The economy is expected to bounce back to 8.8 % next fiscal year (growth), an upward revision of the June numbers.
India could do more on the fiscal side to provide support to households and firms that have been affected by the shutdowns, IMF economist Mahlar Nabar said, responding to a question from The Hindu at a virtual press briefing on whether the government had responded sufficiently to the pandemic and what more was needed to help the economy recover.
Mr. Nabar suggested that the government “tilt the composition of the fiscal support towards more of the direct spending and tax relief measures” and to rely “slightly less on the liquidity support measures” and “credit guarantees which are clearly important to support the provision of credit in the economy.”
Housing sales dip 57% in July-Sep in 8 cities; demand up 85% from previous quarter: PropTiger
Some signs of recovery in the real estate market, but still a long way from normalcy.
PTI reports: "Real estate brokerage firm PropTiger on Wednesday reported 57 per cent year-on-year decline in housing sales across eight major cities at 35,132 units due to the COVID pandemic, but said sales have recovered significantly from the previous quarter.
During July-September 2019, sales of residential properties across eight cities stood at 81,886 units.
However, September quarter sales rose 85 per cent from the April-June quarter on the back of pent-up demand following the nationwide lockdown, according to the Real Insight Q3 2020 report released by News Corp-backed PropTiger through video conference.
The eight cities tracked by PropTiger are Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Delhi-NCR, Mumbai Metropolitan Region (MMR) and Pune.
“We are beginning to see green shoots all across the economy including the residential sector. Although sales and launches have declined year-on-year, but the demand and supply have gone up significantly from the April-June quarter,” PropTiger and Housing.com CEO Dhruv Agarwala told reporters.
He termed the current festival season as a crucial period for the real estate sector which will determine the demand outlook for the next 12 months.
With housing prices remaining stable during the last five years and interest rates on home loans at 15 year low, Agarwala expressed confidence that sales would rise significantly during the current quarter.
The discounts and freebies offered by developers during the festive season would also aid in driving demand, he said.
Agarwala noted that housing sales in the MMR and Pune have revived during the July-September quarter because of reduction in stamp duty by the Maharashtra government.
He suggested other States to follow suit and cut stamp duty on property registration.
“Consumers continue to perceive real-estate as the most stable asset and a number of them are looking to upgrade their homes as working from home is likely to continue,” said Mani Rangarajan, Group COO, Housing.com, Makaan.com & PropTiger.
On supply, Ankita Sood, Head of Research at PropTiger and Housing.com, said the new units launched in July-September stood at 19,865 units across eight cities, registering a decline of 66 per cent from the year-ago period.
However, on a quarterly comparison, new supply registered a growth of 58 per cent, she added."
Only standard loan accounts as of March 1 can be recast under pandemic scheme: RBI
The Reserve Bank of India (RBI) has clarified that loans which have remained standard without any defaults as of March 1, 2020, will be eligible for restructuring under the pandemic-related resolution framework issued in August.
In clarifications issued late last night to borrowers as well as lenders about the August 6 circular, RBI said a loan account that was due for more than 30 days as on March 1, 2020, but subsequently got regularised, will not be ineligible for resolution under the COVID-19 resolution framework.
This is because the restructuring framework is applicable only for eligible borrowers who were classified as standard as of March 1, 2020.
However, such accounts may still be resolved under the prudential framework dated June 7, 2019, the central bank said.
Flipkart bolsters partnerships with banks, NBFCs ahead of festive season
The online retailing giant gets ready for festive season.
PTI reports: "Walmart-owned Flipkart on Wednesday said it will offer credit options through 17 banks, NBFCs and fintech players that will drive credit accessibility for customers during the upcoming festive season.
Flipkart is ramping up its fintech constructs so that consumers across the country can avail the benefits of easy accessibility to credit and affordability options, a statement said.
Through these partnerships, Flipkart aims to tap into the new-to-credit audience across different geographies and pin codes and offer them access to its over 250 million product offerings on the Flipkart marketplace, it added.
“As part of its commitment to be the online destination for affordable shopping for every Indian, Flipkart is offering affordable credit options through 17 leading banks, Non-Banking Financial Companies (NBFCs) and fintech players on the platform, which will drive credit accessibility for over 70 million customers on the platform,” it said.
Flipkart said it has partnered with State Bank of India and with SBI Card to provide debit and credit cards holders a 10 per cent instant discount, while No Cost EMI will be available for Bajaj Finserv EMI card holders, it added.
With the launch of Kotak Mahindra Bank and Federal Bank Debit Card EMI payment option, customers can now avail pre-approved credit from seven banking and fintech players.
Flipkart said it is also launching a Gift Card Store catering to customer needs across 60 brands such as Joyalukkas, Kalyan Jewellers, Croma, FabIndia and KFC among others.
“By facilitating credit and insurance access, and simplifying payments for over 250 million customers across the country, we are reinforcing our commitment to helping fulfill their aspirations without the burden of financial constraints.
“Through these partnerships and their expansion, we hope to take the promise of The Big Billion Days to more customers to enable meaningful growth,” Flipkart Head Fintech and Payments Group Ranjith Boyanapalli said.
E-commerce companies see a large chunk of their business coming in during the festive sales and they make significant investments ahead of time to ramp up their capacity to be able to handle the spike in orders.
Electronics, fashion and home furnishing are some of the categories that see huge demand during the festive season."
WPI inflation rises to 1.32% in Sept mainly on costlier food articles
The upward pressure on prices persists.
PTI reports: "The wholesale price-based inflation rose to 1.32 per cent in September mainly on the back of costlier food articles.
“The annual rate of inflation, based on monthly WPI, stood at 1.32 per cent (provisional) for the month of September, 2020 (over September, 2019) as compared to 0.33 per cent during the corresponding month of the previous year,” government data showed on Wednesday.
The wholesale price-based inflation stood at 0.16 per cent in August.
The wholesale price index based (WPI) inflation was in the negative territory for four straight months -- April (-) 1.57 per cent, May (-) 3.37 per cent, June (-) 1.81 per cent and July (-) 0.58 per cent.
Inflation in food articles during the month was at 8.17 per cent, as against 3.84 per cent in August, showed the data from the commerce and industry ministry.
Prices of cereals came down with a negative inflation print of 3.91 per cent during the month, while, cost of pulses went up by 12.53 per cent.
Vegetables as a category had inflation at a high level of 36.54 per cent in September, potato price skyrocketed by 107.63 per cent from a year-ago period. However, onions had deflation at 31.64 per cent.
In the manufactured products category, the inflation during the month rose to 1.61 per cent, from 1.27 per cent a month ago, the government data said."
COVID-19-specific health policies to get longer run
Insurance regulator IRDAI has allowed renewal, migration and portability of standard COVID-19 specific health policies Corona Kavach and Corona Rakshak.
Giving insurers, and by extension policyholders, the choice to renew, migrate and port the policies, the regulator said Corona Kavach and Corona Rakshak of any tenure can be renewed for further terms of 3.5 months, 6.5 months or 9.5 months. The policies can be renewed till March 31 and the renewal has to be done before expiry of the existing contract for ensuring coverage is continued seamlessly. The regulator also advised insurers against imposing additional waiting period of 15 days on renewal.
At the time of renewal, policyholders can change the sum insured, but there will be a waiting period for the enhanced portion.
Wipro shares tank 7% after quarterly earnings
The excitement over IT stock buybacks may be coming to an end.
PTI reports: "Shares of IT services major Wipro on Wednesday tanked nearly 7 per cent in early trade on the bourses after the company posted a 3.4 per cent decline in consolidated net profit for the September quarter.
The stock tumbled 6.85 per cent to Rs 350 on the BSE.
At the NSE, it plummeted 6.90 per cent to Rs 350.
Wipro on Tuesday posted a 3.4 per cent decline in consolidated net profit to Rs 2,465.7 crore in the three months ended September and projected revenue growth in the December quarter even as it announced a plan to buyback shares worth up to Rs 9,500 crore.
The Bengaluru-based company, which had registered a net profit (attributable to equity holders of the company) at Rs 2,552.7 crore in the year-ago period, registered an almost flat year-on-year revenue growth at Rs 15,114.5 crore in the latest September quarter.
On a quarter-on-quarter basis, the company’s net profit climbed over 3 per cent, while revenue was up by little over 1 per cent.
Wipro CEO and Managing Director Thierry Delaporte said the demand environment has improved from the first quarter even though the pace of decision making remains a bit slower on the larger deals.
The buyback proposal, which is subject to shareholders’ approval, will involve purchase of up to 23.75 crore equity shares, representing 4.16 per cent of the company’s total paid up equity capital, at Rs 400 per share. The buyback size will be up to Rs 9,500 crore."
Work-from-home spurs Epson India printer sales
Printer maker Epson India has reported a surge in sales during the second quarter of FY21, triggered by high demand for its EcoTank printers from work-from-home (WFH) and e-learning consumers, said a senior official.
“After witnessing a decline in the first quarter sales due to COVID-19 and stoppage of billing from March 15, we are seeing fast recovery,” said Siva Kumar, senior general manager, inkjet printers, Epson India said in an interview.
“The demand is coming from WFH consumers and e-learning segments,” he said.
“In the April to June quarter, we sold 53% of last year’s volume, while it rose to almost 90% in the second quarter. The recovery in the second half will be greater than last year due to continued demand and stabilisation of supply chain,” he said.
China's exports witness a surge amid the pandemic
Rupee inches 2 paise higher to 73.33 against US dollar in early trade
A flat opening for the rupee this morning with just marginal gains.
PTI reports: "The rupee opened on a flat note and inched 2 paise higher to 73.33 against the US dollar in opening trade on Wednesday in the absence of any major data or triggers.
At the interbank forex market the rupee was trading in a narrow range. It opened at 73.39 against the US dollar, gained momentum and touched 73.33 against the greenback, higher by 2 paise over its previous close.
On Tuesday, the local unit settled at 73.35 against the greenback.
“Due to the uncertainty surrounding the outcome of the US elections, investors will refrain themselves from taking large positions and we could witness that the markets could remain within a broad trading range of 73-74,” Reliance Securities said in a research note.
Further, stalled talks on US stimulus, COVID-19 vaccine uncertainty and weak Asian currencies could limit gains for the domestic unit, while, RBI mopping up flows by purchasing dollars could also keep the domestic unit from appreciating above 73 levels, the note added.
According to Abhishek Goenka, Founder and CEO, IFA Global, “In the absence of any major data or triggers, we expect range-bound trading to continue.”
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.01 per cent to 93.51.
On the domestic equity market front, the BSE benchmark Sensex was trading 269.19 points lower at 40,356.32, and the broader NSE Nifty dropped 89 points to 11,845.50.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 832.14 crore on a net basis on Tuesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.19 per cent to USD 42.37 per barrel."
‘Centre may provide further stimulus’
The government could announce more relief and stimulus measures to pump-prime the economy in the months to come, with senior government sources stressing that the mini-stimulus package announced on Monday did not mean that the Centre had closed the option for more steps going forward.
Finance Minister Nirmala Sitharaman had announced a package on Monday to spur consumer demand and capital spending, with estimated benefits in the range of ₹73,000 crore to ₹1 lakh crore. The package, estimated to have a fiscal cost of 0.2% of GDP, includes incentives for government employees and formal sector employees to buy consumer goods and other services by using cash vouchers linked to their leave travel allowances.
“We are not saying that this is the last stimulus package that we are offering to counter the pandemic’s effects on the economy,” a senior government source said, in response to queries if any further measures could be expected to boost consumer demand in the upcoming festive season.
Indian shares slip as IMF again slashes GDP forecast
Shares are down this morning after a day of choppy trading yesterday.
Reuters reports: "Indian shares fell on Wednesday after the International Monetary Fund cut its economic growth forecast for the country for the second time in nearly four months, while a broader global sell-off weighed on sentiment. The NSE Nifty 50 index fell 0.28% to 11,900.60 as of 0345 GMT, while the S&P BSE Sensex was down 0.19% at 40,548.60.
The IMF cut its forecast for India's GDP growth, which fell at its steepest pace of 23.9% in the June quarter. It now expects Asia's third-largest economy to contract 10.3% for the fiscal year compared with its June prediction of a 4.5% drop.
Meanwhile, global market sentiment was dampened after J&J's COVID-19 vaccine trials were halted because of an unexplained illness in a study participant.
Among individual stocks, Wipro Ltd slipped 4.14% after the company reported a quarterly profit that missed market expectations."
Apple unveils new iPhones for faster 5G wireless networks
Apple unveiled four new iPhones equipped with technology for use with faster new 5G wireless networks.
There’s the iPhone 12, with a 6.1-inch display, the same as the iPhone 11 but lighter and thinner, starts at almost USD 800 and the iPhone 12 Mini with a 5.4-inch display at almost $700. A higher-end iPhone 12 Pro with more powerful cameras will begin at roughly $1,000; the 12 Pro Max, with a 6.7-inch display, will set buyers back at least $1,100. Apple said the phones should be more durable.
In a move that may annoy some consumers, Apple will no longer include charging adapters with new phones. It says that will mean smaller, lighter boxes that are more environmentally friendly to ship. Apple, however, separately sells power adapters that cost about $20 and $50, depending on how fast they charge phones.
Apple has one of the most loyal and affluent customer bases in the world, which has many analysts betting the next wave of phones will sell well. The iPhone remains the foundation of Apple’s business.