The Nifty and the Sensex opened the day on a negative note, on road to extending their losing streak to give days.
Join us as we follow the top business news through the day.
Chad becomes first country to ask for debt overhaul under G20 common framework
Chad has officially requested a debt restructuring, the first country to do so under a new common framework hammered out last year by China and other Group of 20 countries with the help of the Paris Club, the International Monetary Fund (IMF) said on January 27.
An IMF official said official creditors would soon begin discussions on what will be the first test of the new framework and whether China, the world’s biggest official creditor, and private sector creditors would participate as agreed.
The IMF announced Chad’s move in a statement about a new four-year programme worth about $560 million under its Extended Credit and Extended Fund facilities. The deal was agreed by staff, but must still be approved by the IMF’s executive board.
Like several other African countries, Chad is struggling with a high debt burden against a backdrop of the coronavirus crisis and low prices for oil, its major export.
India biz doubled in Dec quarter, feel good about trajectory: Apple CEO Tim Cook
Apple is bouncing back strong.
Reuters reports: "Apple has doubled its business in India in the December quarter on the back of strong performance of its online store, and the tech giant sees a good growth trajectory going ahead, its CEO Tim Cook said.
The Cupertino-based tech giant posted an all-time record revenue of USD 111.4 billion globally for the first quarter ended December 26, 2020, up 21 per cent year-on-year. International sales accounted for 64 per cent of the quarter's revenue.
"... If you take India as an example, we doubled our business last quarter compared to the year-ago quarter. But our absolute level of business there is still quite low relative to the size of the opportunity," Cook said during an analyst call.
The company, which competes with players like Samsung and OnePlus in the premium smartphone segment, has been aggressively ramping up its presence in the Indian market.
"India is one of those, where our share is quite low. It did improve from the year-ago quarter. Our business roughly doubled over that period of time. And so, we feel very good about the trajectory. We are doing a number of things in the area. We put the online store there, for example, and last quarter was the first full quarter of the online store," Cook said.
He added that the online store has received great reaction and has helped the company achieve the strong set of results last quarter.
"We're also going in there with retail stores in the future. And so, we look for that to be another great initiative and we continue to develop the channel as well," he said.
Apple plans to set up brick-and-mortar outlets in India in addition to the online store as the iPhone maker looks to further cement its position in one of the world's largest smartphone markets. In the past, Apple has stated that it is keen on offering online and in-store experiences to Indian users that are at par with its global standards and that it aims to open its maiden retail store in India.
The growth seen by Apple has been noted by research firms like Counterpoint.
According to Counterpoint, Apple captured the sixth spot in terms of shipment in India in the October-December 2020 quarter with 171 per cent year-on-year growth, and 93 per cent growth in 2020 over the previous year. The report said the launch of the iPhone 12, aggressive offers on the iPhone SE 2020 and iPhone 11, and online expansion had driven this growth.
For the first time, the brand crossed 1.5 million shipments in a single quarter, it further noted.
During the analyst call, Apple CFO Luca Maestri said the global December quarter business performance was fueled by "double-digit growth in each product category, which drove all-time revenue records in each of our geographic segments and an all-time high for our installed base of active devices"."
Rupee falls 21 paise to 73.13 against US dollar in early trade
The rupee mirrored the fall in stocks.
PTI reports: "The rupee depreciated by 21 paise to 73.13 against the US dollar in opening trade on Thursday tracking muted opening in domestic equities and strengthening American currency.
At the interbank forex market, the domestic unit opened at 73.13 against the US dollar, registering a fall of 21 paise over its previous close.
On Wednesday, the rupee had settled at 72.92 against the American currency.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.12 per cent to 90.75.
"The US Dollar Index has started higher this Thursday morning in Asian trade amid safe haven appeal for the greenback amid weakening risk appetite," Reliance Securities said in a research note.
Asian currencies were weak against the greenback and could weigh on sentiments, the note added.
Markets will look to cues from US GDP data and a weaker than expected numbers will push more investors towards the US dollar and vice versa, the note said.
The US Federal Reserve has decided to stick to its dovish stance and left key overnight interest rate near zero to maintain monetary support until there is a stronger rebound from the pandemic-triggered recession.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 336.05 points lower at 47,073.88 and the broader NSE Nifty was down 95.60 points at 13,871.90.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 1,688.22 crore on a net basis on Wednesday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 0.61 per cent to USD 55.47 per barrel."
India's gold demand to rebound in 2021 as economy expands - WGC
India could revive demand for gold as the economy springs back to action.
Reuters reports: "India's gold consumption is expected to rebound in 2021 after falling to its lowest in 26 years last year as pent-up demand and higher economic growth are seen boosting sales, the World Gold Council (WGC) said on Thursday.
Higher purchases by the world's second-biggest bullion consumer could support gold prices, which hit a record high last year, although that could increase India's trade deficit and weigh on the ailing rupee.
Coronavirus led-lockdowns slashed India's gold demand by 35% in 2020 to 446.4 tonnes, the lowest since 1994, the WGC said in a report published on Thursday.
However, demand is expected to rebound in 2021 to around 2019 levels as economic growth is forecast to rebound helped by falling COVID-19 cases, said Somasundaram PR, the managing director of the WGC's Indian operations.
India's economy is seen growing 11.5% in 2021, the International Monetary Fund said on Tuesday.
"As lockdowns eased and normalisation efforts were phased in, imports in the December quarter rose 19% year-on-year, pointing to the positive impact of pent-up demand. This can be expected to continue into 2021," Somasundaram said.
India's gold imports of 164.4 tonnes in the December quarter were the highest in six quarters, fuelled by improving demand during the key Hindu festivals of Dussehra and Diwali, the WGC said.
India's investment demand rose 8% in the December quarter on the year to 48.9 tonnes, its highest in two years, as people boosted purchases of gold coins and bars in expectations that bullion prices would rise further, Somasundaram said.
"We will see a sharp rise in investment demand. Amid low interest rates and higher stock prices, people are looking at gold to diversify their investments," he added.
In rural areas gold demand in the last few months was robust following surplus monsoon rainfall that yielded a record harvest of summer-sown crops, the WGC said."
Shares fall for fifth straight day ahead of budget next week
The fall in stocks continues.
Reuters reports: "Indian shares fell for a fifth straight session on Thursday, dragged lower by bank and information technology stocks, as investors locked in gains ahead of the federal budget next week.
The blue-chip NSE Nifty 50 index was down 0.95% at 13,834.90 by 0507 GMT, after falling as much as 1.2% to its lowest level since Dec. 24. The benchmark S&P BSE Sensex slid 0.94% to 46,965.92.
"The market has been on a downward trend during the last couple of days and that is not surprising because during the last two years, we have seen the fortnight preceding the budget to be a cautious time" said Anand James, chief market strategist at Geojit Financial Services in Kochi.
"This year, we have approached the budget on a high and that is all the more reason for traders to take some money off the table," James said.
Indian equities had coasted at record highs for multiple sessions this month as investors bet on an economic recovery from the rollout of COVID-19 vaccines as well as a boost from foreign fund inflows.
Axis Bank, which fell to a near one-month low earlier in the session after reporting a slump in quarterly profit, reversed losses to trade 1.6% higher. The Nifty Bank index shed 1.3%.
The Nifty IT index declined 1.5%, weighed down by heavyweights Tata Consultancy Services and Infosys that shed 1% and 1.4%, respectively.
Reliance Industries bounced after three sessions of losses that saw the conglomerate shed over 10%, and rose 0.6% to be the top boost to the Nifty 50 index.
HDFC Bank and Kotak Mahindra Bank were the top drags to the Nifty, falling 3% and 3.1%, each.
Investors now await results from automaker Maruti Suzuki India and InterGlobe Aviation Ltd — the operator of the country's largest airline IndiGo."
High debt burden could hamper India’s ability to provide stimulus: Moody’s
India’s high government debt could limit its ability to give a fiscal stimulus to the economy, Moody’s Investors Service noted in a report on credit conditions in Asia.
Job losses, income shocks and the gaps in health infrastructure pose ‘highly negative risks’ for the country’s growth prospects, Moody’s added. “In India, a high government debt burden will limit the extent of fiscal support, although the government has undertaken a number of measures to improve policy transmission and broader structural reforms,” it pointed out. It warned that the sheer magnitude of the recession would lead to a degree of economic scarring in the more vulnerable Asian economies, which was likely to have persistent effects on potential output.