The Nifty and the Sensex opened the day on a positive note once again after yesterday's gains of well over 1% as markets focus on the results of the US Presidential elections.
Join us as we follow the top business news through the day.
The 'blue trade' unravels
Sensex rallies 355 points; Nifty reclaims 11,900
Rising for the third straight session, the Sensex rallied 355 points on Wednesday following gains in Reliance Industries, Infosys and Kotak Bank amid a positive trend in global markets ahead of the outcome of the US presidential elections.
After a volatile session, the 30-share BSE index ended 355.01 points or 0.88% higher at 40,616.14.
Similarly, the broader NSE Nifty climbed 95 points or 0.80% to 11,908.50.
IndusInd Bank was the top gainer in the Sensex pack, surging around 5%, followed by Sun Pharma, Reliance Industries, Infosys, Kotak Bank and Tech Mahindra.
On the other hand, HDFC, PowerGrid, Axis Bank, ICICI Bank, NTPC and L&T were among the laggards.
Fund raising via capital markets drops 31 pc to Rs 75,230 cr in Sep
Animals spirits remain muted in the economy.
PTI reports: "Companies garnered over Rs 75,000 crore from capital markets in September, a decline of 31 per cent from the preceding month, with private placement of debt instruments continuing to be the most preferred route for financing business.
The funds were mopped up mainly for business expansion plans, loan repayments and working capital requirements.
According to data available with the markets regulator Sebi, companies raised a total of Rs 75,230 crore in September as compared to Rs 1.1 lakh crore in August by way of issuing equity and debt securities.
Out of the Rs 75,230 crore garnered in September, Rs 64,389 crore was mopped up from private placement of debt securities and Rs 9,022 crore through private placement of equity, which include qualified institutional placement (QIP) and preferential allotment routes.
Individually, a total of Rs 7,684 crore was raised through issuance of shares on preferential allotment basis and Rs 1,338 crore through QIP.
In comparison, corporates had mobilised Rs 58,419 crore and Rs 45,471 crore through private placement of debt securities and equities, respectively, in August.
When it comes to raising funds through public issuance, in September Rs 1,302 crore was raised through two main-board initial public offering, Rs 7 crore from SME’s initial share-sale and Rs 363 crore through rights issue.
There was one public issue of corporate bonds amounting to Rs 150 crore in the month of September.
During August, there was no public issue of corporate bonds, the data showed."
Small business activity fast reaching near-normal levels: Report
Good news for unorganized sector activity.
PTI reports: "Business activity of the micro, small and medium enterprises - which are regarded as the backbone of Indian economy - is fast reaching near-normal levels, and rapidly adopting digital business tools to drive efficiency and growth, according to a report.
Out of 36, 16 states and UTs are witnessing business activity levels higher than pre-COVID times, while Karnataka, Maharashtra, Gujarat, Andhra Pradesh, Tamil Nadu and Delhi are trending at 90-95 per cent of their pre-COVID levels, as per the data gathered by startup OkCredit.
Bihar, Haryana, Assam, Rajasthan, and Himachal are the states where business activity is 10 per cent higher, it said.
Uttar Pradesh, Madhya Pradesh, Chhattishgarh, Odisha, Jharkhand, Uttarakhand, and Punjab are also exhibiting higher business activity, it added. Businesses in tier 2 and tier 3 cities witnessing faster recovery than tier 1 cities, it said, adding the micro-retail players are increasingly taking up digital bookkeeping solutions, as it makes their book-keeping task simpler, digitised and secure and there is stronger demand coming from small towns and hinterlands.
It further said the company witnessed double-digit growth in businesses from medical and Kirana stores at 21 per cent and 15 per cent, respectively, in September 2020.
Data coming from remote regions of the country where OkCredit app is being adopted like never before and is recording strong growth in transactions and these trends point to a sharp recovery from pandemic induced slowdown among businesses in tier 2 and tier 3 cities as compared to the tier 1 cities, it added."
Hiring for freshers improving; likely to continue till end of FY21: Experts
The labor market shows more signs of recovery as the effects of the lockdown fade.
PTI reports: "Demand for freshers, which was the hardest hit following the lockdown to curb the spread of COVID-19 pandemic, has seen an uptick since June and this trend is likely to continue till the end of this financial year, say experts.
The sectors that are witnessing significant uptrend include EdTech and e-Learning followed by healthcare, HR tech and FinTech.
“Freshers hiring had dropped down to mere 1.5 lakh during March 25-April 30, from the average 5 lakhs per month. However, the scenario is improving and currently there are around 3.5 lacs fresher job openings listed on the portal, Teamlease.com and Freshersworld.com VP and Business Head Kaushik Banerjee told PTI.
Hiring began to look up for freshers in late June and is likely to pick up more strength during September-November period, he noted.
The sectors where these freshers recruitment are taking place the most include EdTech and e-Learning followed by healthcare, HR tech and FinTech. Besides, FMCG, IT and ITES, Manufacturing, BFSI, Telecom, and Semiconductor industries have also sprung back into action, he added.
According to CIEL HR Services Director and CEO Aditya Mishra, most companies were impacted by demand contraction but are betting on recovery and are hoping to witness pre-COVID levels of demand in January-March 2021.
“Through the weeks of unlocking, freshers hiring has started in the above sectors. About 65 per cent of the freshers who were holding offers slated to join in May-September have found placements. However, the remaining ones are struggling to find work,” he said.
Considering the off-campus hiring, on an overall basis fresher hiring in the first half (April-September) is about 75 per cent of the last year, he pointed out.
Further, he said, large organisations with their campus-hiring infrastructure will adopt new ways of holding campus connect and hiring because fresher hiring is a critical component of hiring strategy for large organisations.
However, we expect salary levels offered in the campuses to decline up to 10 per cent this year, he opined.
Meanwhile, companies have evolved new methods of induction and training for new joinees using various online platforms of learning, a combination of self-paced learning and instructor-led live classes held on video platforms, he added.
Indeed India Managing Director Sashi Kumar stated that as per the global job site’s data job postings for freshers saw a 26 per cent decline from March to April 2020, following the implementation of the lockdown.
“After this slump, job postings for freshers began to see a recovery from June onwards. Job postings for freshers saw a 57 per cent increase from just May to June. In parallel, postings for remote fresher jobs began to pick up from May. There was a 157 per cent increase in remote job postings for freshers from April to May,” he said.
While job postings for freshers have improved marginally between April and August, however, remote job postings for fresher roles have seen a 364 per cent increase during the same time period, indicating changing modes of work, said Kumar.
Leading roles for freshers in terms of hiring include Administration roles (14 per cent), Tech Software roles (10 per cent), Customer Servicing roles (8 per cent), Marketing roles (5 per cent) and Sales roles (4 per cent), he added."
JLR India opens bookings for electric SUV Jaguar I-PACE
Jaguar Land Rover India announced that it has opened bookings of its all-electric Performance SUV, the Jaguar I-PACE.
The vehicle is fitted with 90 kWh Lithium-ion battery that delivers 400 PS from its two electric motors.
Deliveries are expected from March 2021, the company said.
The battery comes with an 8 years or 160 000 km warranty. Additionally, I-PACE customers will benefit from complimentary 5 years service package, 5 years Jaguar Roadside Assistance as well as a 7.4 kW AC wall mounted charger, the company said.
With capability to accelerate from 0-100 km/h in 4.8 seconds, I-PACE will be offered in three variants that include S, SE, and HSE.
Indian services sector registers growth in Oct for first time since Feb: PMI
More greenshoots in the economy, this time in the service sector.
Reuters reports: "Indian service sector activity ended the seven-month sequence of decline and registered growth in October, supported by improved market conditions amid easing COVID-19 restrictions, a monthly survey said on Wednesday.
At 54.1 in October, up from 49.8 in September, the seasonally adjusted India Services Business Activity Index posted above the 50.0 no-change mark for the first time since February.
A print above 50 means expansion and a score below that denotes contraction, as per the IHS Markit India Services Purchasing Managers’ Index (PMI).
“It’s encouraging to see the Indian service sector joining its manufacturing counterpart and posting a recovery in economic conditions from the steep deteriorations caused by the COVID-19 pandemic earlier in the year,” said Pollyanna De Lima, Economics Associate Director at IHS Markit.
Lima further noted that “while a revival of the manufacturing industry began in August, only now the service sector started to heal. Service providers signalled solid expansions in new work and business activity during October“.
Services companies reported an increase in new work intakes, which they attributed to successful marketing efforts and strengthening demand.
On the job front, there was another monthly decline in employment. The pace of job shedding was solid and matched that recorded in September. Furthermore, payroll numbers contracted across the five monitored sub-sectors.
“Survey participants indicated that workers on leave had not returned and that a widespread fear of COVID-19 contamination continued to restrict staff supply,” Lima said.
Meanwhile, hopes that a vaccine for COVID-19 will be rolled out underpinned positive sentiment toward the 12-month outlook for business activity, the survey said.
On the price front, the rate of input cost inflation picked up to an eight-month high, but there was a softer rise in prices charged for the provision of services.
The Composite PMI Output Index, which measures combined services and manufacturing output, rose from 54.6 in September to 58.0 in October, signalling the strongest increase in private sector output in close to nine years.
Companies in the manufacturing and service sectors recorded lower payroll numbers at the start of the third quarter of fiscal year 2020/21. As a result, private-sector employment declined for the eighth straight month, the survey said."
Micromax re-enters smartphone market with two new devices
Micromax on Tuesday re-entered the smartphone market in the country with the unveiling of two new devices under the ‘In’ brand as it looks to leverage the current anti-China sentiment in India, along with the push for ‘AtmaNirbhar Bharat’.
“In both our new devices, we are giving even better pricing than Chinese players and both are performance-oriented products,” said Rahul Sharma, the company’s co-founder. “We will not be making ₹4,000-₹5,000 phones... so the expectation that Micromax will make cheap phones etc... we will not do that,” he added.
The company launched the ‘IN note 1’ featuring a 48MP AI Quad camera, MediaTek Helio G85 Gaming processor, and a 6.67-inch display, with prices starting at ₹10,999, and the ‘IN 1b’ that comes with MediaTek Helio G35 processor and AI dual camera (13+2 MP primary camera + 8MP front camera) at ₹6,999 onwards.
Mr. Sharma said that in India, 90% of the smartphone market was between ₹7,000-₹15,000 and hence the company was entering this segment. However, the firm will unveil products in the higher price range (about ₹20,000-₹25,000) as well, soon.
US Treasury rates spike amid election uncertainty
India central bank exploring investment options for reserves, sources say
Falling global interest rates is forcing RBI to rethink its approach towards investment of reserves.
Reuters reports: "Reserve Bank of India is looking at diversifying its foreign exchange reserve investments amid the fall in global interest rates caused by the COVID-19 pandemic, according to two government sources aware of the development.
The RBI's foreign exchange reserves stand at a record $560.63 billion. The central bank, which mostly invests in gold, sovereign debt and other risk-free deposits, has seen returns fall as monetary policy loosened globally. U.S. two-year government bonds ended at 0.16% on Nov. 2.
As a result, the RBI is likely to increase its gold investments, as well buying dollars and exploring investing in AAA-rated corporate bonds for the first time, said the sources, who declined to be named due to the sensitivity of the issue.
“The RBI is likely to continue to buy dollars. The problem is the dollar deployment and getting good returns,” one of the officials said.
The official added that the RBI was studying the possibility of investing in AAA-rated corporate dollar bonds, which offer better returns than sovereign credit. Such investments have not been made in the past, so the central bank would move carefully.
Foreign investors have continued to pour money into the Indian stock market because of its stronger returns. Foreign direct investment flows, particularly towards Reliance Industries, have pulled in dollars into the country.
Traders say the RBI has been intervening heavily in the spot market to prevent appreciation of the rupee, in turn adding to its reserves.
“The government is comfortable with current rupee levels. It needs to be competitive to help provide an export boost,” the official said.
A second source said dollar buying intervention will continue as both the RBI and the government are comfortable with a 73-75 per dollar range on the local currency.
Despite a contraction in gross domestic product expected in the current fiscal year to March 2021, foreign flows have remained healthy.
Foreign investors bought shares worth $2.52 billion in October, taking total investment in 2020 to $6.47 billion. Though FIIs are net sellers of bonds worth $13.98 billion in 2020 so far, they bought a net $459.30 million in October.
The rupee has fallen for three straight months to October. It is one of the worst-performing Asian currencies in 2020.
“Our 10-year yield is still at around 6% compared to near zero and negative interest rates globally, so we will see inflows continuing and RBI will keep buying dollars to prevent rupee appreciation,” the second source said.
The RBI has already started increasing its investment in gold gradually, the sources said.
Gold reserves stand at $36.86 billion as on Oct. 23 compared with $30.89 billion at the end of the last fiscal year in March, though a large part of this increase can also be attributed to valuation changes."
Rupee slumps 33 paise to 74.74 against US dollar in early trade
The bullish start in stocks didn't help the rupee this morning.
PTI reports: "The rupee depreciated 33 paise to 74.74 against the US dollar in opening trade on Wednesday, tracking strong American currency ahead of the US Presidential election results.
The local unit opened at 74.74 against the greenback at the interbank forex market, down 33 paise over its last close.
On Tuesday, the rupee had settled at 74.41 against the American currency.
“Most of the Asian currencies have started weak against the US Dollar this Wednesday morning and could weigh on sentiments,” Reliance Securities said in a research note.
Traders said most Asian currencies opened weak against the US Dollar Index, which started with gains on Wednesday morning in Asian trade ahead of the US Presidential election results.
Former vice president and Democratic presidential candidate Joe Biden has maintained his lead mid-way through the counting of votes, as Republican incumbent Donald Trump appeared to be fast catching up.
As per Fox News, Biden has 207 of the 538 electoral college seats, while Trump has 148. On the other hand, CNN has projected 192 electoral college votes to Biden and 108 to Trump.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.32 per cent to 93.85.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 146.60 points higher at 40,407.73, and the broader NSE Nifty rose 32.60 points to 11,846.10.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,274.40 crore on a net basis on Tuesday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 2.14 per cent to USD 40.56 per barrel."
China halts Jack Ma’s $37 billion Ant Group IPO in Shangai, Hong Kong
Ant Group’s $37 billion stock market listing has been suspended in both Shanghai and Hong Kong in a dramatic move just two days before what was set to be the world’s largest-ever stock market debut
The Shanghai stock exchange first announced that it had suspended Ant’s initial public offering on its STAR market, prompting Ant to also freeze the Hong Kong leg of the dual listing.
Ant said that its listing had been suspended by Shanghai following a recent interview regulators held with its founder Jack Ma and top executives. It said it may not meet listing qualifications or disclosure requirements, and also cited recent changes in the fintech regulatory environment.
Shanghai described Ant’s meeting with Chinese financial regulators as a “major event”.
Indian shares rise on strong blue-chip earnings, IT gains
Yet another good start to the day for stocks after Monday's gains.
Reuters reports: "Indian shares edged higher on Wednesday following strong earnings from blue-chips Sun Pharmaceutical Industries and Adani Ports and SEZ (APSEZ), with IT stocks supporting gains.
The NSE Nifty 50 index rose 0.43% to 11,861.1 by 0350 GMT and the S&P BSE Sensex gained 0.48% to 40,451.57.
Drugmaker Sun Pharma and ports operator APSEZ were up 2.1% each after the companies reported upbeat profit for the September quarter.
The Nifty IT index gained 2.5%.
The Nifty banking and financial indexes slipped 0.5% and 0.6%, respectively, snapping two sessions of gains.
India's biggest lender State Bank of India fell 0.8% ahead of its earnings scheduled for later in the day.
Meanwhile, MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.6% on an agonisingly close U.S. Presidential race, especially in major battleground states."
Exports fall again on global trade woes
India’s merchandise exports slid back into contraction mode in October as struggling global trade continued to face headwinds from the COVID-19 pandemic.
Outbound shipments declined 5.4% from a year earlier to $24.82 billion, after a brief respite in September when exports had expanded 6% to snap a six-month-long contraction.
Imports of goods also declined by 11.5% last month, as per preliminary trade data released by the Commerce and Industry Ministry on Tuesday, taking the overall imports between April to October to $182.29 billion, 36.3% lower than the same period in 2019.
Merchandise exports in the first seven months of the current financial year amounted to $150.07 billion, a 19.1% contraction from the year-earlier period.