The Nifty and the Sensex opened the day on a positive note, scaling further highs as the vaccine against coronavirus is all set to be rolled out.
Join us as we follow the top business news through the day.
US yields rise on election results
Sensex snaps 10-session winning run, drops 264 points
The long winning streak comes to an end.
PTI reports: "Snapping its 10-session winning run, equity benchmark Sensex tumbled 264 points on Wednesday, dragged by losses in Reliance Industries, ITC and Infosys.
After touching its record intra-day high of 48,616.66 in early trade, the 30-share BSE index pared all gains to end 263.72 points or 0.54 per cent lower at 48,174.06.
Similarly, the broader NSE Nifty fell 53.25 points or 0.38 per cent to 14,146.25. It touched a record peak of 14,244.15 during the day.
ITC was the top laggard in the Sensex pack, shedding around 3 per cent, followed by Reliance Industries, Bajaj Finance, Axis Bank, HUL and HCL Tech.
On the other hand, PowerGrid, Bharti Airtel, ONGC and UltraTech Cement were among the gainers.
Domestic equities witnessed high volatility and corrected mainly on turning outcome of Georgia's run-off elections for two Senate seats in the favour of Democrats, said Binod Modi, Head-Strategy at Reliance Securities.
"Control of Senate by Democrats is likely to result in reversal of lower tax rates in the US, which may create certain volatility in the market," he said, adding that volatility index shot up sharply over 5 per cent at one point of time.
Further, profit-booking at record levels also dragged benchmarks lower, traders said.
Elsewhere in Asia, bourses in Shanghai and Hong Kong ended on a positive note, while Tokyo and Seoul were in the red.
Stock exchanges in Europe were trading firm in early deals.
Meanwhile, the global oil benchmark Brent crude was trading 0.99 per cent higher at USD 54.13 per barrel."
Warburg Pincus invests $100 mln in Indian consumer electronics firm boAt
U.S. private equity firm Warburg Pincus has invested about $100 million in India's boAt, the consumer electronics firm said on Wednesday.
BoAt, known for its budget-friendly bluetooth speakers and wireless earbuds, was last valued at nearly $283 million after a $59.6 million funding round in December, according to PitchBook data.
Personal electronics products like headphones have seen a revival in sales since the onset of the COVID-19 pandemic, with homebound users looking for means to aid their remote work and to keep themselves entertained.
During the third quarter of 2020, boAt captured a marketshare of 32.4% in the earwear category in India, according to IDC data.
Prime Minister Narendra Modi to interact with leading economists on Friday
A meet in the lead-up to the budget.
PTI reports: "Prime Minister Narendra Modi will interact with leading economists and sectoral experts on Friday to deliberate on measures that may be included in the upcoming budget for promoting growth, amid uncertainty on multiple fronts caused by COVID-19.
The meeting, being organised by the government think tank Niti Aayog will be held virtually and will also be attended by Niti Aayog Vice Chairman Rajiv Kumar and Niti Aayog CEO Amitabh Kant.
"The Prime Minister will meet economists on Friday to seek their inputs for the next budget," said a government official on condition of anonymity.
The meeting assumes significance as according to the Reserve Bank of India (RBI), India's economy is projected to contract 7.5 per cent in the current fiscal ending March 31, 2021, while the International Monetary Fund (IMF) and World Bank estimates the contraction at 10.3 per cent and 9.6 per cent, respectively.
India's economy recovered faster than expected in the September quarter as a pick-up in manufacturing helped GDP clock a lower contraction of 7.5 per cent and held out hopes for further improvement on better consumer demand.
India's economic growth stood at an estimated 4.2 per cent in 2019-20.
The upcoming Union Budget is likely to be presented on February 1, 2021."
Control over ‘troves of data’ behind Alibaba’s tussle with authorities
At the heart of the on-going tussle between Jack Ma’s Alibaba Group and regulators in China is the control over “troves of consumer-credit data” that authorities believe have given the e-commerce giant an unfair advantage over its competitors, according to a report on Wednesday.
“How to regulate data monopolies is at the heart of the issue here,” an adviser to the antitrust committee of China’s State Council, or cabinet, was quoted as saying by The Wall Street Journal.
On December 24, the State Administration for Market Regulation (SAMR) said it had launched a probe into Alibaba’s “suspected monopolistic acts”, including “forcing merchants to choose one platform between two competitors”.
This followed the last minute suspension, the previous month, of what was expected to be a record-breaking $35 billion initial public offering (IPO) of the Ant Group, which is the group’s financial arm and behind Alipay, China’s biggest digital payments company.
Maruti Suzuki adds S-Cross, Ignis, WagonR to its subscription offering
Maruti doubles down on subscription offerings.
PTI reports: "The country's largest car maker Maruti Suzuki India on Wednesday said it has added models like S-Cross, Ignis and WagonR to its vehicle subscription offering for individual customers.
The company had launched its Maruti Subscribe initiative in major cities like Delhi-NCR, Bengaluru, Hyderabad, Pune, Mumbai, Chennai and Ahmedabad, with its models Swift, Dzire, Vitara Brezza, Ertiga from its Arena network and Baleno, Ciaz, and XL6 from Nexa retail chain.
"Subscription has become more affordable with the inclusion of WagonR in Maruti Suzuki ARENA and Ignis in NEXA," the company said in a statement.
Customers will pay an all-inclusive monthly subscription charge starting Rs 12,722 for WagonR Lxi and Rs 13,772 for Ignis Sigma in Delhi (including taxes) for a tenure of 48 months, it added.
The company said under this initiative a customer can use a brand-new car without actually owning it.
The customer needs to pay an all-inclusive monthly fee that comprehensively covers maintenance, 24x7 roadside assistance and insurance for the complete tenure, it said.
The plan comes with tenure options of 24, 36, and 48 months, as per the customer's choice, Maruti Suzuki India said."
Housing sales plunge 50% in NCR during 2020; demand falls 37% across 8 major cities
The lockdown has turned out to be a black swan event for housing.
PTI reports: "Housing sales in the national capital region (Delhi-NCR) plunged 50 per cent year-on-year during the 2020 calendar year to 21,234 units on low demand because of the COVID-19 pandemic, property consultant Knight Frank India said on Wednesday.
The sales of residential properties fell 37 per cent to 1,54,534 units in 2020 across eight major cities as compared with 2,45,861 units in the previous year, the consultant said in its 'India Real Estate - Residential and Office Update H2 2020' report.
Housing sales fell in all eight major cities, with demand falling most in Ahmedabad and least in Pune.
According to the data, housing sales fell 18 per cent in Pune to 26,919 units during 2020 from 32,809 units in the previous year.
Mumbai saw 20 per cent decline at 48,688 units last year from 60,943 units during 2019.
The Maharashtra government's decision to temporarily cut stamp duty on registration of properties led to higher sales in Mumbai and Pune region during the last four months of 2020 calendar year.
Housing sales in Delhi-NCR decreased 50 per cent to 21,234 units from 42,828 units, while demand slumped 51 per cent in Bengaluru to 23,579 units from 48,076 units during the period under review.
In Chennai, sales fell 49 per cent to 8,654 units in 2020 from 16,959 units in the previous year.
The sales of residential properties in Hyderabad declined 38 per cent to 10,042 units from 16,267 units. Kolkata saw 21 per cent fall in sales to 8,912 units from 11,266 units.
Ahmedabad was worst hit, with sales down by 61 per cent to 6,506 units in 2020 from 16,713 units in the previous year.
Knight Frank India CMD Shishir Baijal said, “Despite the on-going pandemic, the H2 2020 sales growth in some cities is fairly encouraging. In Q3 2020, the real estate market started witnessing revival signs, further recording a significant improvement in homes sales during Q4 2020." Out of the total sales number in H2 2020, he said Mumbai and Pune contributed around 50 per cent in home sales.
"This marvellous performance can be largely attributed to the state government's decision of reducing stamp duty in Maharashtra. The other state governments would need to jump into the bandwagon or offer something similar to bolster demand across their markets," Baijal said.
The RBI's decision to maintain low repo rates has narrowed the margin between rent and home loan EMI paid to banks, he said."
BharatPe to raise over Rs 5,000 crore in debt funding in next 2 yrs, gets Rs 60 crore from Innoven Cap
More fundraising news from the fintech space.
PTI reports: "Financial Technology firm BharatPe on Wednesday said it plans to raise over Rs 5,000 crore in debt funding in next 2 years to build its lending business.
The company further announced that it has received Rs 60 crore from Innoven Capital, a venture debt and specialty lending firm.
"As we build the lending business at BharatPe, raising institutional debt is important to us. We plan to raise USD 500-700 million (Rs 3,600 crore - Rs 5,118 crore) of debt capital over the next 2 years.
"We are incredibly glad that Innoven Capital is our first supporter on this journey. We look forward to working with Innoven to build a long-term win-win relationship," BharatPe group president Suhail Sameer said in a statement.
BharatPe at present provides a single interface for all existing UPI apps and allows merchants to accept UPI payments for free, through the BharatPe QR.
It also supports merchants to access credit and other value-added services.
"We are excited to partner with BharatPe as their first institutional debt provider. BharatPe is not only helping millions of merchants to accept UPI payments seamlessly but also enabling them access to credit, which has been a pain point.
"This is a massive market and we look forward to being a partner in BharatPe's ambitious growth agenda," Innoven Capital India CEO Ashish Sharma said."
Titan jewellery division recovers from pandemic blow, enters growth phase
On the recovery path.
PTI reports: "Tata group firm Titan on Wednesday said its jewellery division has recovered from the COVID-19 pandemic jolt, entering the growth phase, and other divisions have moved closer to full recovery led by festive season sales in the third quarter of the current fiscal.
The company had reported an unprecedented net loss of Rs 297 crore in the April-June quarter due to the pandemic. Its standalone net profit declined 37.81 per cent to Rs 199 crore for the quarter ended September 30, 2020 as against a net profit of Rs 320 crore in the corresponding period of the preceding fiscal.
"The company had been expecting a good festive season given the fact that there were signs that customers wanted to feel good by stepping out and shopping after 6 months of being restricted primarily to their homes.
“Q3 did not disappoint. The jewellery division has crossed the recovery phase to growth phase and other two large divisions have also moved much closer to the full recovery," Titan said in its quarterly update.
Titan said the company continues to focus on the creation of a combined digital and physical experience by which the customers can discover, engage, and buy products of their choice through the channel of their preference. Brand websites of Tanishq and Titan Eye Plus have added augmented reality for virtual try-out of certain products by customers.
Titan said its arm Titan Commodity Trading has received approval of admission of membership as a trading member (stock broker) on Multi Commodity Exchange of India (MCX) along with Sebi approval for the same.
"The company is setting up its processes and is expected to commence its activities in the very near future," the company said.
Elaborating on jewellery business, Titan said: "The jewellery industry saw a resurgence in the festive season along with a pent up demand for wedding jewellery as most of the weddings in the first half of year 2020-21 were deferred.
“The company already announced the 15 per cent growth in the 30-day festive period from Dussehra to Diwali. Fortunately, the growth trend was visible even after the festive season ended and the division has recorded close to 15 per cent growth (excluding sale of raw gold of Rs 334 crore) in Q3.” Titan said, while ticket size continues to be higher due to higher gold rates and higher share of wedding related products, 100 per cent recovery in buyers (number of invoices) is yet to be seen.
Titan's watches and wearables division had a recovery rate of around 88 per cent in Q3, compared to the revenue of the same quarter in last year.
"The e-commerce channel is leading the recovery with very strong absolute growth of over 30 per cent. The festive period saw a surge in footfall in the shopping zones and the recovery rate improved in metros in Q3.” The recovery rate for all the retail channels had been steadily increasing month-on-month primarily due to higher consumer walk-ins and also complemented by the selling of multiple products/ higher ticket size product in a single invoice, it said.
Titan said its other businesses had a revenue recovery of around 80 per cent, compared to the revenue of the same quarter in last year.
The company’s eyeware division had a recovery of 92 per cent in Q3, compared to the revenue of the same quarter in last year.
The recovery rate for fragrances and accessories continued to be muted due to the slow recovery of two of the biggest channels, trade and large format stores (LFS), the company added.
Titan said Caratlane, which is 72.3 per cent owned by the company, delivered a growth of 39 per cent for the quarter and the growth turned positive on a cumulative basis for the year."
OPEC+ approves slight crude output increases
Members of the oil cartel OPEC and their partners agreed Tuesday to raise output slightly in February and March, but only in Russia and Kazakhstan.
Overall the amount of crude oil the group has voluntarily withdrawn from global markets is to decline from 7.2 million barrels per day to 7.125 mbd in February, and 7.05 mbd in March, the OPEC+ group said in a statement issued at the end of its first ministerial meeting of the year.
It called at the same time for caution on the part of those active in the sector owing to the coronavirus pandemic.
To ensure the market is not flooded with oil while pandemic-related risks to demand remain high, OPEC kingpin Saudi Arabia decided to cut its own production by one million barrels per day in both months, Energy Minister Prince Abdulaziz bin Salman told a press conference.
Danes are getting free 20-year mortgages
India's services sector loses more steam in Dec, job cuts resume
Economic greenshoots could be under threat.
Reuters reports: "Growth in India's dominant services industry continued to lose momentum in December as a resurgence in coronavirus infections weighed on new business and employment, a private survey showed on Wednesday.
Asia's third-largest economy has been gradually recovering from a coronavirus-induced recession but is not expected to return to pre-pandemic levels soon, especially within the service industry - the engine of economic growth and jobs in the country.
The Nikkei/IHS Markit Services Purchasing Managers' Index fell to 52.3 in December from November's 53.7 but held above the 50-mark separating growth from contraction for a third straight month.
"A spike in COVID-19 cases was reported as a key factor restricting growth of new work intakes among service providers, which in turn curbed the rise in output and led to increased business uncertainty about the outlook," Pollyanna De Lima, economics associate director at IHS Markit, said in a release.
"It is clear that the early part of 2021 will continue to be challenging and we're looking at a sustainable recovery and some return to normality once COVID-19 vaccines become available."
India has the second-highest number of coronavirus infections in the world. On Sunday it approved two coronavirus vaccines for emergency use but it could take years to vaccinate over 1.3 billion people with its rudimentary healthcare system.
Although a sub-index monitoring overall demand ended a rough 2020 in growth territory, it declined to a three-month low as night curfews in some major cities depressed demand.
Demand from abroad remained firmly in contraction territory as many countries reimposed lockdown measures to contain a fresh spike in COVID-19 cases.
Weak demand forced firms to lower their prices despite an uptick in input costs, which increased at the quickest pace since February.
Meanwhile, job market conditions darkened, slipping back into contraction, although the pace of job shedding remained minimal.
"Given the damaging impact of the pandemic on the service economy, some companies are facing financial difficulties, which is preventing staff hiring. December saw the ninth round of job shedding in ten months," De Lima added.
Optimism about the next 12 months faded at the end of the year as firms were concerned about the uncertainty surrounding the pandemic, the rupee's depreciation and rising inflationary pressures, the survey showed.
Despite a pick-up in factory activity, sluggish demand for services meant the India composite PMI fell to a three-month low of 54.9."
Shares hit record highs as govt set to roll out vaccines
The bull run continues in the stock market.
Reuters reports: "Indian shares inched higher to record levels on Wednesday, extending a months-long rally driven by foreign fund flows, while the country gets ready to roll out a COVID-19 vaccination programme by next week.
The blue-chip NSE Nifty 50 index rose 0.24% to 14,234.00 and the benchmark S&P BSE Sensex climbed 0.19% to 48,528.69 by 0352 GMT.
Both indexes have now hit record highs in all trading sessions of the new year, helped by continued foreign fund inflows and progress on COVID-19 vaccines.
Foreign investors pumped more than $20 billion into Indian equities last year, according to Refinitiv Eikon data.
On Tuesday, India's top health official said the country was set to roll out a COVID-19 vaccination programme by next week, aiming to cover 300 million people by July.
In Mumbai trading, HDFC Bank rose 0.4% and was among the top boosts to the Nifty 50, after the country's largest private-sector lender reported higher advances and deposits as of Dec. 31, 2020.
Titan Company rose 2.5% after reporting strong results in its jewellery and watches and wearables divisions for the third quarter.
Broader global markets fell as investors prepared for a possible Democrat triumph in Senate runoffs in the U.S. battleground state of Georgia."
Global and India output set to expand in 2021-2022, says World Bank
Global economic output is projected to grow by 4% in 2021 assuming widespread roll-out of a COVID-19 vaccine throughout the year, as per the World Bank’s Global Economic Prospects (GEP) report released on Tuesday. This projection is still 5% below pre-pandemic levels. India is expected to grow at 5.4% in fiscal year 2021/22 and 5.2% in fiscal 2022/23 after an expected contraction of 9.6% in fiscal 2020/21.
India’s expected contraction in the current fiscal year is due to a sharp decline in household spending and private investment. There was severe income loss in the informal sector which accounts for 4/5ths of employment, as per the GEP report. However, recent data indicate that recovery in manufacturing and services is gaining momentum. In 2021, the rebound from the low base is expected to be countered by subdued private investment growth due to financial sector weakness, the report says.
The global recovery has been dampened by the resurgence of the coronavirus but is expected to strengthen as confidence, trade and consumption start improving, supported by vaccinations. After an estimated 3.6% contraction in 2020, U.S. GDP is expected to grow at 3.5% in 2021 and the Euro area at 3.6%.