After yesterday's sharp correction, the benchmark stock indices have opened the day on a negative note as the global equity sell-off persists.
Join us as we follow the top business news through the day.
Pidilite to acquire Huntsman unit for ₹2,100 crore
Pidilite Industries Ltd has entered into a definitive agreement with Huntsman Group (USA) to acquire 100% stake in one of its subsidiaries in India, Huntsman Advanced Materials Solutions Private Ltd (HAMSPL). The company’s board on Wednesday approved this.
This is for a cash consideration of approximately ₹2,100 crore, excluding customary working capital and other adjustments, subject to certain preconditions being met prior to the closing of the transaction.
HAMSPL manufactures and sells adhesives, sealants and other products under well-known brands such as Araldite, Araldite Karpenter and Araseal in India.
In 2019, the company clocked business revenue of ₹400 crore.
Larsen & Toubro shares tank nearly 5% after Q2 earnings
Here's one reason behind the fall in the indices this morning.
PTI reports: "Shares of Larsen & Toubro (L&T) on Thursday tanked nearly 5 per cent after the company posted a 45 per cent decline in consolidated net profit for the quarter ended September.
The stock plunged 4.88 per cent to Rs 935.55 on the BSE.
On the NSE, it tanked 4.85 per cent to Rs 935.10.
The engineering and construction giant on Wednesday posted a 45 per cent decline in consolidated net profit to Rs 1,410.29 crore for the quarter ended September, hit by the COVID-19 pandemic.
The company had clocked a net profit of Rs 2,551.67 crore in the year-ago period, it said in a regulatory filing.
“Net profit after tax (PAT) and share in profit / (loss) of joint ventures / associates from continuing operations before exceptional items for the quarter is at Rs 1,410 crore, registering a sequential improvement of nearly 4 times reflecting pickup in the business momentum.
“However, the impact of pandemic in terms of lower revenue, higher credit provisions in the financial services business and disruption of the Metro services, led to decline of 45 per cent vis-a-vis reported PAT of corresponding quarter of the previous year at Rs 2,552 crore,” the company said in a statement.
Total consolidated income fell to Rs 31,593.77 crore in July-September quarter, from Rs 35,924.89 crore in the year-ago period."
Stock sell-off one of the worst since 2008
Rupee slips below 74/USD level in early trade
The Indian rupee continued its downward journey on Thursday, sliding another 18 paise to 74.05 against the US dollar in opening trade, tracking weak opening in domestic equities amid global risk aversion.
At the interbank forex market, the domestic unit opened weak at 74.02 against the greenback, then lost further ground and fell to 74.05 against the American currency, showing a fall of 18 paise over its previous close.
On Wednesday, the rupee depreciated by 16 paise to settle at more than one-month low of 73.87 against the US currency.
“The risk sentiment has been dealt a serious blow with the worsening coronavirus situation in Europe on account of a second wave. Most countries have announced partial lockdowns, curfews or declared emergencies. This threatens to nip the nascent recovery in the bud,” said Abhishek Goenka, Founder and CEO, IFA Global.
Bharti won’t bid at 5G auction, reserve price too high: Vittal
Bharti Airtel on Wednesday indicated that it would refrain from bidding for 5G spectrum at the auctions, which were likely to be held early next year, given the current reserve prices.
The company may look at radio frequencies below 1,000 megahertz (Mhz) to improve network availability inside buildings and in rural areas, Gopal Vittal, MD and CEO, India & South Asia, said in a post-earnings call.
“We are hearing from the department that there may be an auction early next year… any time between January and March,” Mr. Vittal said. “Given that the reserve price of 5G is as high as it is, we will not buy it because we won’t be able to afford it. I can’t comment on what others will do, but from our perspective, it will not make sense,” he added.
Bharti would also consider whether it needs to bid for spectrum in the 1,800 Mhz band as the amount of spectrum being used for 2G was decreasing every quarter.
Indian shares slip as L&T results, global selloff weigh
Further losses this morning for Indian stocks after yesterday's sharp correction.
Reuters reports: "Indian shares fell on Thursday as infrastructure stocks declined after weak results from Larsen and Toubro, with surging global coronavirus cases and uncertainty around the U.S. election further dampening sentiment.
The NSE Nifty 50 index fell 0.6% to 11,661.05 by 0415 GMT and the S&P BSE Sensex declined 0.5% to 39,725.73.
Larsen and Toubro (L&T) fell as much as 4.86%, dragging down the Nifty infrastructure index 1.27%, after the industrial conglomerate reported a quarterly loss from continuing operations on a standalone basis https://www.bseindia.com/xml-data/corpfiling/AttachLive/6de2a3a8-7b6b-4cb0-856e-d32d4e11e41d.pdf on Wednesday.
The company declared a special dividend of 18 rupees a share, which was lower than expectations, said Saurabh Jain, assistant vice-president at SMC Global Securities.
“L&T's management also refrained from giving any sort of guidance and the market is not happy about that,” Jain said.
The domestic market was also pressured by fears of a contested U.S. presidential election and concerns over the global economic recovery as European countries imposed new restrictions to contain a second wave of virus infections.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 1% after U.S. stock indexes overnight posted their biggest single-day decline since June.
“Markets are seriously nervous with the way the virus is spreading in Europe,” SMC Global's Jain said. “There are concerns that the economic recovery could be patchy.”
At home, the country's coronavirus cases crossed a grim milestone of 8 million, health ministry data showed.
The Nifty state-owned banks index fell 0.9% and was the biggest percentage loser among sectors. The Nifty autos index declined 0.6%.
Watchmaker Titan Co slid 2.6% after the company reported a drop in quarterly profit on Wednesday.
Asian Paints rose 1.7%, topping gainers in the Nifty. Axis Bank rose 0.5% after returning to a quarterly profit.
Maruti Suzuki, India's biggest carmaker by market share, telecom firm Vodafone Idea, airline operator Interglobe Aviation and refiner BPCL Ltd are among companies reporting earnings on Thursday."
U.S. investors want more reforms in IPO rules: SEBI
Investors from the U.S. have emphasised the need for early finalisation of direct listing proposals, development of the corporate bond market and reforms in IPO regulations, said SEBI.
In an interaction with top Securities and Exchange Board of India (SEBI) officials, they have also shown interest in taking part in innovative ideas under the regulatory sandbox framework, the regulator said.
Ajay Tyagi, Chairman, SEBI, along with other officials, held an e-interaction with stakeholders from the U.S. on Tuesday which was organised by the U.S. India Strategic Partnership Forum (USISPF).
“We briefed them about key developments in the Indian economy as well as recent trends in the securities market, especially in this COVID era,” he said.