The benchmark stock indices opened the day on a negative note, falling further after yesterday's sharp fall.
Join us as we follow the top business news through the day.
Indian shares adrfit in volatile session, Reliance top drag
An update on the stock indices.
Reuters reports: "Indian shares swung between gains and losses on Tuesday as investors parsed through news of a new fast-spreading strain of the coronavirus in Britain that could slow global economic recovery.
The NSE Nifty 50 index was down 0.34% at 13,282.65 by 0520 GMT, while the benchmark S&P BSE Sensex fell 0.33% to 45,401.30.
Both the indexes rose as much as 0.8% in early trade before changing course to fall up to 0.8%.
On Monday, the indexes tumbled 3% and snapped six straight sessions of gains as countries across the globe, including India, shut travel from Britain due to concerns over the new virus variant.
Among the losers on Tuesday, airline operators Interglobe Aviation and SpiceJet Ltd dropped 5.4% and 10%, respectively.
"The news related to the new coronavirus is being absorbed by the market and that explains the panic, most people seem to be reacting to it now and we are seeing some pressure after the initial bounce," said Anand James, chief market strategist at Geojit Financial Services in Kochi.
"People who have joined late are limiting the loss or locking up profits in the first bounce, with only two days to pack all the action, we are seeing volatility."
India's volatility index rose as much as 4.14% to its highest in more than five weeks on Tuesday in a holiday-shortened trading week.
The Nifty Media index and the Nifty PSU Bank index fell the most among sectoral indexes, down as much as 4.37% and 3.93%, respectively.
Shares of India's most valuable company, Reliance Industries Ltd, slipped as much as 2.64% and were the top drag.
Bucking the trend, the Nifty IT index rose as much as 1.53%, led by a 4% rise in MindTree Ltd."
‘Can’t stop Amazon from writing to regulators on FRL’
The Delhi High Court on Monday declined to restrain U.S.-based e-commerce major Amazon from writing to Indian statutory authorities such as the SEBI and CCI about an arbitral order against the assets sale deal between Future Retail Ltd. (FRL) and Reliance Retail.
The high court said that though a prima facie case was made out by FRL for grant of interim injunction, “the balance of convenience lies both in favour of FRL and Amazon”.
FRL, in its plea before the high court, had accused Amazon of interfering with its assets sale deal with Reliance by writing to various regulatory authorities about an order passed by the Singapore International Arbitration Centre on October 25, restraining FRL from taking any steps to transfer its retail assets. Amazon has 49% stake in Future Coupons Pvt. Ltd. (FCPL), which holds 9.82% in FRL.
Justice Mukta Gupta opined that a combination of the shareholding agreements (SHA) of FRL and FCPL and the FCPL SSA (share subscription agreement), besides “creating protective rights in favour of Amazon for its investments, also transgress to ‘control’ over FRL requiring government approvals and in the absence thereof are contrary to FEMA FDI Rules”.
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Rupee depreciates 16 paise to 73.95 against US dollar in early trade
The fall in stocks has hit the rupee too.
PTI reports: "The rupee depreciated 16 paise to 73.95 against the US dollar in opening trade on Tuesday tracking muted domestic equities and weakened risk appetite amid concerns about a new virus strain.
Traders said rupee is trading on a weak note against the US dollar as the greenback rebounded amid safe haven appeal for the currency.
At the interbank forex market, the domestic unit opened at 73.95 against the US dollar, registering a fall of 16 paise over its previous close.
On Monday, the rupee plunged 23 paise to end at a two-week low of 73.79 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.26 per cent to 90.27.
"The risk sentiment was jolted by the news of a new strain of virus emerging in the UK and consequently about 40 countries imposing bans on flights arriving from the UK," said Abhishek Goenka, Founder and CEO, IFA Global.
The variant, which officials say is up to 70 per cent more transmissible than the original, triggered concerns about a wider spread which has prompted several European countries to take measures to prevent people arriving from Britain, including bans on flights and trains, Reliance Securities said in a research note.
Further, Asian currencies were weak this morning and could weigh on sentiments, the note added.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 6.65 points lower at 45,547.31 and the broader NSE Nifty fell 2.10 points to 13,326.30.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 323.55 crore on a net basis on Monday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 0.51 per cent to USD 50.56 per barrel."
GDP growth likely to turn positive in Q3: NCAER
Having witnessed a contraction in the first half of the current financial year, India’s GDP growth is likely to turn positive at 0.1% in the October-December quarter, economic think-tank NCAER said.
The NCAER, in its mid-year review of the Indian economy, also forecast 2% growth in the fourth-quarter (January-March 2021). The overall contraction in the current fiscal is likely to be contained at 7.3%.
India’s economy contracted by 23.9% in the first quarter of the current fiscal on the account of the impact of the COVID-19 pandemic. The contraction narrowed to 7.5% in the second quarter. “The sharp recovery of GDP in Q2, the bowstring effect, was a welcome surprise. We have accordingly revised our forecast of annual contraction to (-) 7.3%. The revised growth forecasts for Q3 and Q4 are 0.1% and 2% respectively,” the NCAER said in its mid-year economic review.
Indian shares extend losses on worries over new virus strain
This week's fall in stock values continues.
Reuters reports: "Indian shares reversed from early gains to trade lower on Tuesday, extending a sell-off from the previous session, as worries deepened over a fast-spreading new strain of the coronavirus detected in Britain.
The NSE Nifty 50 index was down 0.85% at 13,243.30 by 0411 GMT, while the benchmark S&P BSE Sensex fell 0.54% to 45,317.91.
Both the indexes rose as much as 0.8% in early trade.
Both the Nifty and Sensex tumbled 3% on Monday, snapping six straight sessions of gains as the new virus strain dimmed hopes of a global economic recovery.
On Tuesday, the Nifty Media index was down 4.25% and the Nifty PSU Bank index fell 3.3%.
Shares of India's most valuable company, Reliance Industries Ltd, slipped as much as 2.64% and were the top drag.
Airline stocks also extended losses after India announced suspension of all flights from the UK to the country until the end of the year.
Interglobe Aviation fell as much as 5.44% and SpiceJet Ltd slid 10%. Broader Asian shares extended a pullback from multi-year highs hit last week on concerns over the highly infectious new strain of COVID-19."
Rising input costs drive four auto firms to bump up prices
Four automobile firms — Tata Motors, Mahindra & Mahindra (M&M), Isuzu Motors India and BMW Group India — on Monday announced an increase in prices of their products, passing on rising input costs to consumers.
Industry analysts attributed this is to the sharp rise in prices of commodities that go into the manufacture of automobiles.
“All input costs have gone up substantially. Be it steel, rubber [or] copper, all commodity prices have go up,” said Jinesh Gandhi, auto analyst, Motilal Oswal Financial Services.
“The magnitude of the price hike is such that the auto companies do not have the capacity to absorb even half of it,” he added.
The farm equipment sector of Mahindra & Mahindra said it would raise prices for its tractors across models effective January 1, citing the rise in commodity prices.