The benchmark stock indices have opened the first day of trading in 2021 on a positive note as the bull run continues into the new year.
Join us as we follow the top business news through the day.
Rupee surges 21 paise to 72.90 against US dollar in early trade
A good start to the year for the rupee.
PTI reports: "The rupee appreciated by 21 paise to 72.90 against the US dollar in opening trade on Monday supported by sustained foreign fund inflows and weakness of the American currency in the overseas market.
Traders said hopes of COVID-19 vaccine also improved sentiments.
India''s drugs regulator on Sunday approved Oxford COVID-19 vaccine Covishield, manufactured by the Serum Institute, and indigenously developed Covaxin of Bharat Biotech for restricted emergency use in the country, paving the way for a massive inoculation drive.
At the interbank forex market, the domestic unit opened at 72.93 against the US dollar and inched higher to 72.90 against the greenback, registering a rise of 21 paise over its previous close.
On Friday, the rupee had settled at 73.11 against the American currency.
Meanwhile, the dollar index, which gauges the greenback''s strength against a basket of six currencies, fell 0.24 per cent to 89.72.
"An improving global economic outlook as COVID-19 vaccines are rolled out, rock-bottom US interest rates and ongoing Fed bond purchases have dented the dollar''s appeal," Reliance Securities said.
Further, "most Asian currencies were trading stronger against the greenback this morning and could lend support to the domestic unit," it added.
On the domestic equity market front, the benchmark BSE Sensex and the broader NSE index touched fresh record-high levels in early deals. The 30-share BSE benchmark Sensex was trading 224.28 points higher at 48,093.26, and the broader NSE Nifty was up 74.85 points at 14,093.35.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 506.21 crore on a net basis on Friday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, advanced 1.06 per cent to USD 52.35 per barrel."
Reliance, BP commit to pay for any shortfall in KG-D6 production to buyers
Reliance Industries Ltd. and its partner BP Plc. of U.K. have committed to pay in cash for any natural gas volumes they are unable to deliver to customers from the next wave of discoveries in the eastern offshore KG-D6 block.
According to draft gas sales and purchase agreement (GSPA) Reliance and BP have shared along with price discovery bids for incremental gas from the R-Cluster fields in KG-D6 block, the sellers will reimburse buyer money equivalent to gas sourced from alternate source to make up for any volumes they are unable to deliver.
The buyer on his part will be obliged to offtake the committed gas volumes or pay for it (take or pay).
The volumes not taken but paid for can be taken in subsequent quarters, the GSPA said.
These ship or pay and take or pay obligations will be waived in the event of force majeure events such as any act of God like earthquake and floods, fire, epidemic, acts of war, strike and lockouts, delays due to government/ regulatory actions and court orders.
Asian stocks rise after Wall Street hits new high
The bull run in stocks continues into the new year.
PTI reports: "Asian stock markets rose Monday on 2021''s first trading day, boosted by optimism about the rollout of coronavirus vaccines after Wall Street ended the year on a new high.
Market benchmarks in Shanghai, Hong Kong, Seoul and Sydney advanced. Tokyo declined.
Optimism about vaccines has countered concern about rising infection numbers in the United States and some other countries and conflict over economic aid in Washington, said Stephen Innes of Axi in a report.
Traders are “perhaps a bit over-eager” but believe vaccines will “provide the ultimate economic kick-start, offering a massive booster shot to corporate profits,” said Innes.
The Shanghai Composite Index gained 0.3per cent to 3,481.98 and the Hang Seng in Hong Kong gained 0.3per cent to 27,308.63.
The Nikkei 225 in Tokyo was off 0.4per cent at 27,344.87 after Prime Minister Yoshihide Suga announced the government is considering declaring a state of emergency for Tokyo and three surrounding prefectures due to surging virus caseloads.
Suga asked restaurants and bars to close by 8 p.m. and said it would be difficult to restart a controversial travel promotion program that was suspended last month.
He also said the government would expedite approval of coronavirus vaccines and begin providing injections in February.
The Kospi in Seoul rose 2per cent to 2,930.38 and Sydney''s S&P-ASX 200 added 0.2per cent to 6,661.10. Singapore and Jakarta also advanced.
On Wall Street, the benchmark S&P 500 index rose 0.6per cent to a high of 3,756.07 on Thursday, its final trading day of 2020. It ended the year up 16.3per cent, or a total return of about 18.4per cent with dividends.
The Dow Jones Industrial Average rose 0.7per cent to a record 30,606.48. The Nasdaq composite added 0.1per cent to 12,888.28.
Vaccine development by U.S., European and Chinese producers has helped investor optimism that a return to normal might be closer after the global economy''s worst decline since the 1930s.
The United States and Britain have approved Pfizer Inc.''s vaccine and Britain approved a second vaccine from AstraZeneca and Oxford University. The Chinese government has approved its first domestically developed vaccine. Others are being tested.
Governments might not throw as much stimulus at their economies as they did last year, but policy is “still at a very loose setting,” which supports stock prices and lending, said Kerry Craig of JP Morgan Asset Management in a report.
“Investors should look through the bumpier start to the new economic cycle and focus on the improved earnings outlook,” Craig said.
In energy markets, benchmark U.S. crude gained 56 cents to USD49.08 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 12 cents on Thursday to USD48.52. Brent crude, used to price international oils, added 67 cents to USD52.47 per barrel in London. It rose 17 cents the previous session to USD51.80.
The dollar declined to 102.99 yen from Thursday''s 103.27. The euro rose to USD1.2258 from USD1.2211."
The dilemma in home loans: fixed or floating interest rate?
The decision to choose between a floating rate and fixed rate home loan has always been an important one for borrowers. This topic has been discussed widely and if you do a Google search, you will get some inputs on this. Having said that, it needs a proper perspective. First, let’s get the basics clear.
Floating rate means that the interest rate you are paying now is a function of the rate environment today. Subsequently, as interest rates in the economy move up or down, the rate you pay will move up or down accordingly.
Hence the name ‘floating’ i.e. it floats with some reference benchmark. A fixed rate home loan is a tricky term. While from the name it seems that the interest rate is fixed, there may be a clause in fine print that the loan provider may raise the rate at some point, triggered by some development.
This may be referred to as the so-called fixed or floating-fixed rate home loan, where the interest rate is not as fluctuating as floating, but may fluctuate under certain conditions. Then there is the fixed rate loan, which may be referred to as proper fixed or fixed-fixed rate loan, provided you go through the document or consult a legal professional.