The benchmark stock indices opened the day on a negative note with modest losses as benchmark heavyweights witness a correction.
Join us as we follow the top business news through the day.
Global stocks turn negative
Sensex dips 37 points on profit-booking; Nifty edges higher
Stocks ended the day flat.
PTI reports: "The BSE Sensex retreated from record highs to close 37 points lower on Wednesday due to profit booking in banking and infrastructure stocks by cautious investors after the recent rally.
The 30-share barometer closed lower by 37.40 points or 0.08 per cent at 44,618.04.
The broader NSE Nifty edged higher by 4.70 points or 0.04 per cent to end at its fresh record high of 13,113.75.
Banking stocks bore the brunt of profit selling ahead of the RBI policy announcement this week. Kotak Bank was top loser among Sensex stocks, dropping by 3.28 per cent.
HDFC Bank declined by 1.86 per cent, HDFC by 1.28 per cent and ICICI Bank by 0.99 per cent. SBI fell 0.5 per cent while Bajaj Finance by 0.72 per cent.
Larsen & Toubro dropped 0.16 per cent.
Markets had opened with losses as investors were cautious over a possible US stimulus package. However, the UK’s approval for the Pfizer COVID-19 vaccine cheered investors helping the indices to limit losses, analysts said.
Among major gainers, ONGC rose the most by 4.11 per cent, followed by Asian Paints (3.74 per cent) and Titan (3.48 per cent). Auto stocks gained after the companies reported sales growth in the domestic market in November, aided by robust offtakes amid the festival season.
Bajaj Auto rose by 2.86 per cent, Mahindra and Mahindra by 2.53 per cent and Maruti Suzuki by 1.47 per cent.
IT major TCS and Infosys recovered from early lows to close higher by 0.81 per cent and 0.33 per cent, respectively.
Other Asian markets were mixed, with the Nikkei 225 in Tokyo and the Shanghai Composite index in China edging 0.1 per cent higher, and South Korea’s Kospi gaining 1.6 per cent.
Hong Kong’s Hang Seng dropped 0.2 per cent while Australian shares closed almost flat."
SC stays NCLAT order for CCI probe against Flipkart
An important relief for the Indian e-commerce giant.
PTI reports: "The Supreme Court on Wednesday stayed the March 4 order of National Company Law Appellate Tribunal (NCLAT) asking fair trade regulator CCI to again initiate the probe against e-commerce major Flipkart for an alleged use of its dominant position.
A bench of Chief Justice S A Bobde and Justices A S Bopanna and V Ramasubramanian, which initially was of the view to send back the matter to NCLAT after setting aside March 4 order and decision on all aspects including the issue of dominant position being enjoyed by Flipkart, later stayed appellate tribunal’s decision.
The top court issued notice to All India Online Vendors Association (sellers association) and Competition Commission of India (CCI).
Senior advocate Harish Salve, appearing for Flipkart, said that CCI doesn’t look at the findings of the Government and relied on the tax department findings and misread the findings of the tax tribunal.
He said that the other e-commerce major Amazon is against his client company and if he is not a dominant player then the allegations of predatory pricing does not apply on Flipkart.
Salve submitted that the predatory pricing is an issue to be considered against the dominant player as a case of abuse of power but his client has not been held as a dominant player.
The bench said that the CCI has rendered a categorical finding that Flipkart does not have the dominant position and the NCLAT has not reversed the findings on the dominant position.
It told the counsel for vendors association that if they are agreed that the NCLAT should have considered the issues of dominant position then it can remand back the matter.
To which counsel appearing for All India Online Vendors Association (sellers association) said that they would like to argue the matter.
The bench then issued notice and stayed the March 4 order of NCLAT and listed the matter for further hearing.
On March 4, the NCLAT has set aside the earlier order passed by the CCI absolving Flipkart of unfair practices using its dominant position and directed it to ask its probe arm Director General (DG) to investigate into the allegations.
The NCLAT said that the All India Online Vendors Association (AIOVA) had successfully made its case here.
In November 2018, the AIOVA had approached the CCI alleging abuse of market dominance by e-commerce major.
The AIOVA had alleged abuse of market dominance against Flipkart India Pvt Ltd, which is into wholesale trading/distribution of books, mobiles, computers and related accessories, and e-commerce marketplace Flipkart Internet Pvt Ltd.
It had alleged that small vendors have become allies of the big vendors and suppliers to leading sellers such as Cloudtail, WS Retail, etc on the Flipkart and Amazon platforms, rather than selling directly to consumers through the online e-commerce marketplace sites.
However, passing an order on November 6, 2018, the CCI had held that the business practices of Flipkart and Amazon are not in violation of competition norms and rejected allegations of abuse of market dominance made by the AIOVA.
The CCI had ruled that looking at the present market construct and structure of online marketplace platforms in India, “it does not appear that any one player in the market is commanding any dominant position at this stage of evolution of market”.
The AIOVA, as mentioned in the CCI order, is a group of over 2,000 sellers selling on e-commerce marketplaces such as Flipkart, Amazon, Snapdeal etc."
Burger King India IPO gets oversubscribed
A hit IPO for the international burger giant.
PTI reports: "The initial public offering of Burger King India got oversubscribed within a few hours of opening for subscription on Wednesday.
The IPO, which will close on Friday, was subscribed 1.84 times. The price band is Rs 59-60 per share.
Non-Institutional Investors’ category received 19 per cent subscription while the portion reserved for retail individual investors got subscribed 9.83 times, as per data available with stock exchanges till 2 pm.
The IPO will see the Indian subsidiary of the US-based Burger King raise Rs 810 crore, including a fresh issue of shares worth Rs 450 crore.
Promoter entity QSR Asia Pte Ltd will sell up to six crore shares through the IPO. At the upper end of the price band, the sale would fetch Rs 360 crore.
The chain currently operates 268 stores in India and out of them, eight are franchises, mainly located at airports, and the rest are owned by the company.
Burger King India, the Indian arm of the US-based quick service restaurant chain Burger King, on Tuesday raised Rs 364.5 crore from anchor investors.
Kotak Mahindra Capital Company, CLSA India, Edelweiss Financial Services and JM Financial are the managers to the offer."
RBI’S MPC starts deliberation on policy rate
The Monetary Policy Committee of the RBI begins its deliberations.
PTI reports: "The Monetary Policy Committee (MPC) of RBI began its three-day deliberation on Wednesday here amid expectations that the central bank will maintain status quo on the benchmark lending rates in view of high retail inflation.
The RBI will announce its monetary policy review on December 4.
After its last MPC meeting in October, RBI kept policy rates unchanged to help tame inflation that in the recent times has surged past 6 per cent mark. RBI projected the country’s GDP to contract 9.5 per cent in the current financial year due to the pandemic. It has cut policy rates by 115 basis points since February.
Experts opined that RBI may not slash policy rate in the wake of rising Consume Price Index (CPI)-based inflation driven mainly by supply side issues.
Amar Ambani, Senior President & Institutional Research Head at Yes Securities said with frequency indicators and GDP data conveying meaningful rebound in economic activity and retail inflation remaining stubbornly high, “we not only expect the RBI to maintain status quo in December 2020 policy meeting, but the minimal chance of a 25 bps rate cut in February 2021 also appears to be fading away“.
He further said RBI may upgrade its growth outlook, wherein the central bank would scale down on its earlier pessimistic GDP projection of 9.5 per cent for 2020-21.
“Similarly, RBI will also update on the inflation trajectory, when compared with the earlier expectations of CPI moderating in Q4 FY21,” he added.
Madan Sabnavis, Chief Economist, Care Ratings said the six-member MPC is expected to factor in its decision making the nascent signs of improvement in the domestic economy while also recognising the fragile nature of this recovery and the underlying downside risks.
“We expect the RBI to retain the policy rate at 4 per cent and continue with the accommodative policy stance despite the buildup in inflationary pressures,” Sabnavis said.
On expectation from the RBI on policy rate front, Sachin Chhabra, founder, Peel-Works Pvt Ltd said active interventions by the government through stimulus measures and the central bank through the monetary policy have helped many segments of the economy to claw back to normalcy.
He further said the second quarter has seen strong indications of recovery. However, more needs to be done, especially in the MSME and SMEs sector, which is the engine of growth and employment.
“We expect an accommodative policy to continue along to set off the tremendous macro challenges that are head winding our nation,” Chhabra said.
Jyoti Prakash Gadia, Managing Director, Resurgent India opined the RBI is expected to follow a ‘wait and watch’ approach while deciding about the repo rate this week.
With retail inflation at 7.61 per cent in October, the RBI stance is likely to be cautious, Gadia said, and added that fortunately in the second quarter, the decline in GDP was lower at 7.5 per cent than projected earlier.
“There is still uncertainty about the growth rate in the current quarter. RBI may therefore keep a close watch on the emerging inflation and growth numbers, before taking a view on the further rate cut... Continuation of a pause on the rate cut is thus expected to be the likely scenario,” Gadia said.
Brickwork Ratings(BWR) in a report said that given the continued contraction of the economy, MPC is likely to continue with its accommodative monetary policy stance to manage financial stability and support growth recovery.
“Considering the elevated inflation levels, BWR expects the RBI MPC to adopt a cautious approach and hold the repo rate at 4 per cent in its December meeting,” it said.
Retail inflation, calculated on the basis of CPI, continued to rise for the ninth month in a row in October, reaching 7.61 per cent on the back of high food prices. This is the highest level of retail inflation since May 2014 when the inflation was at 8.33 per cent.
The government has mandated the RBI to keep retail inflation at 4 per cent (+/- 2 per cent)."
Amazon’s cloud unit taps own chips for new supercomputing offering
Amazon.com Inc’s cloud unit on Tuesday offered a new supercomputing service based on its self-designed processors, a further sign of how chips based on Arm Ltd's technology are encroaching on Intel Corp and Advanced Micro Devices Inc turf.
Amazon Web Services, or AWS, sells its computing services based on the customer's choice of an underlying central processor chip. Software developers have traditionally chosen between Intel or AMD products, but since 2018 Amazon has also offered its own “Graviton” chips designed with technology from Arm, which is in the midst of a $40 billion takeover by Nvidia Corp.
Arm-based chips have long powered mobile phones because they can operate on very low power levels, but they are increasingly used in data centers where their power efficiency helps control costs. The world's fastest computing system, the Fugaku supercomputer in Japan, is based on Arm chips.
Supercomputing helps with tasks such as weather forecasting, medical research and modeling aerodynamics for cars without a wind tunnel. But systems remain expensive and mostly operated by governments and research centers.
China buys Indian rice for 1st time in decades as supplies tighten
Border tensions aren't deterring some trade between India and China.
Reuters reports: "China has started importing Indian rice for the first time in at least three decades due to tightening supplies and an offer from India of sharply discounted prices, Indian industry officials told Reuters.
India is the world's biggest exporter of rice and China is the biggest importer. Beijing imports around 4 million tonnes of rice annually but has avoided purchases from India, citing quality issues.
The breakthrough comes at a time when political tensions between the two countries are high because of a border dispute in the Himalayas.
“For the first time China has made rice purchases. They may increase buying next year after seeing the quality of Indian crop,” said B.V. Krishna Rao, president of the Rice Exporters Association.
Indian traders have contracted to export 100,000 tonnes of broken rice for Dec-February shipments at around $300 per tonne, industry officials said.
China's traditional suppliers, such as Thailand, Vietnam, Myanmar and Pakistan, have limited surplus supplies for export and were quoting at least $30 per tonne more compared with Indian prices, according to Indian rice trade officials."
Nissan forays into compact SUV segment, drives in Magnite at ₹ 4.99 lakh
Nissan Motor India on Wednesday forayed into the highly competitive compact SUV segment in the country with the launch of Magnite at an introductory starting price of ₹ 4.99 lakh (ex-showroom Delhi).
The model, which comes with both manual and automatic transmissions, is going to compete with the likes of Maruti Vitara Brezza, Hyundai Venue, Tata Nexon, Kia Sonet, Mahindra XUV300 and Honda WR-V.
The competing models are priced much higher than Magnite.
The one litre petrol variants of the all new Magnite are priced between ₹ 4.99 lakh and ₹ 7.55 lakh while the one litre turbo petrol trims are tagged between ₹ 6.99 lakh and ₹ 8.45 lakh.
The turbo petrol CVT (Continuous Variable Transmission) variants are priced between ₹ 7.89 lakh and ₹ 9.35 lakh (all prices ex-showroom).
Tata Motors shares jump over 4% after strong Nov vehicle sales data
Tata Motors shows signs of revival.
PTI reports: "Shares of Tata Motors jumped over 4 per cent in early trade on Wednesday after the firm’s total vehicles sales in the domestic as well as international markets grew 21 per cent in November.
The stock gained 4.22 per cent to Rs 187.30 on the BSE.
At the NSE, it rose by 4.22 per cent to Rs 187.35.
Tata Motors on Tuesday said its total vehicles sales (domestic and international) grew 21 per cent in November to 49,650 units.
The company had sold 41,124 units in the same month last year.
Total domestic sales increased 26 per cent to 47,859 vehicles in the previous month, from 38,057 units sold in November 2019, Tata Motors said in a statement.
Domestic passenger vehicles sales climbed 108 per cent to 21,641 units in November, as compared to 10,400 units in the year-ago month"
Salesforce to buy workplace app Slack in $27.7 billion deal
Salesforce.com Inc has agreed to buy workplace messaging app Slack Technologies Inc in a $27.7 billion deal, the biggest by the cloud-computing pioneer as it bets on an extended run for remote working and sharpens its rivalry with Microsoft.
The deal enables Salesforce to provide a unified platform for businesses to connect their employees, customers and partners with each other and the apps they use, bolstering its enterprise portfolio.
For Slack, the deal comes as it struggles to fully capitalize on the switch to remote working during the COVID-19 pandemic.
Slack changed workplace communications by focusing on real-time messaging that could be broken into conversations with groups assembled on the fly, a more nimble platform than email.
But the messaging style that Slack helped create has become an extremely competitive space, with larger, older competitor Microsoft Corp aggressively promoting its similar Teams product with integrated video and voice calling.
Weak dollar boosts emerging markets
Rupee rises 25 paise to 73.43 against US dollar in early trade
The rupee appreciated by 25 paise to 73.43 against the US dollar in the opening session on Wednesday on sustained foreign fund inflows and weak American currency.
At the interbank forex market, the domestic unit opened at 73.45 against the US dollar, and gained ground to touch a high of 73.43 against the greenback, registering a rise of 25 paise over its previous close.
On Tuesday, the rupee surged 37 paise to settle at 73.68 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.17% to 91.15.
“Record low real rates across the globe are causing the huge amounts of liquidity infused by central banks to chase riskier assets. The Dollar continues to get hammered,” said Abhishek Goenka, Founder and CEO of IFA Global.
India’s November power consumption growth slows to 4.7%
Power consumption growth slowed to 4.7% at 98.37 billion units (BU) in November amid the onset of early winter, especially in the northern part of the country.
In November 2019, electricity consumption in the country was recorded at 93.94 BU, as per government data.
Power consumption growth had entered positive territory in September and recorded a double-digit surge in October, power ministry data showed.
In September, power consumption recorded growth of 4.4% at 112.24 BU, compared with 107.51 BU in the same month last year.
India’s power consumption grew by almost 12% to 109.53 BU in October this year, as against 97.84 BU in the same month last year.
According to experts, the onset of early winter, especially in the North, has affected power consumption.
Indian shares inch lower as banks, Reliance slip
Stocks are seeing a slight correction this morning.
Reuters reports: "Indian shares pulled back on Wednesday from record closing highs hit in the previous session, with banking stocks slipping ahead of a top court hearing on loans under moratorium.
The NSE Nifty 50 index fell 0.1% to 13,095.55 by 0349 GMT, while the benchmark S&P BSE Sensex was down 0.18% at 44,576.51.
Both indexes had gained more than 1% on Tuesday, after a sharp rally in November on hopes for a coronavirus vaccine.
The Nifty Banking Index slipped 0.4%, with top private-sector lender HDFC Bank Ltd down 0.8%.
The Supreme Court is set to hear a case on waiving interest on loans under moratorium on Wednesday, with banks hoping that the apex court will not offer any more reprieve to borrowers.
India's most valuable company, Reliance Industries Ltd , fell 0.8%, while a rise of nearly 4% in Tata Motors Ltd after reporting higher November sales helped limit losses in the Nifty 50.
Fast food restaurant chain Burger King's India arm opened its 8.1 billion rupees ($110.34 million) initial public offering for subscription on Wednesday."
PMI shows manufacturing losing steam
The Purchasing Managers’ Index (PMI) for India’s manufacturing touched 56.3 in November, signaling that even as an improvement in wider industrial activity continued, the sector’s expansion as well as the pace of of new orders slowed down while employment declined further as business optimism faded during the month.
After hitting 58.9 in October, the highest in over a decade, November’s manufacturing PMI marked a three-month low, IHS Markit, which compiles the index, said on Tuesday.
“Growth in the Indian manufacturing sector lost momentum in November, but the latest PMI reading was still consistent with a sharp rate of expansion,” the firm said in a release. “There were slower increases in factory orders, exports, buying levels and output. Meanwhile, COVID-19 restrictions caused a further drop in payroll numbers,” it added.
Though aggregate new orders rose at the slowest pace in three months, their growth was “stronger than any seen for eight years prior to September”, IHS Markit noted and said export orders had also picked up last month, as per the purchasing managers of 400 manufacturers it had surveyed.