The Nifty and the Sensex have opened the last day of the week on a positive note with gains of nearly 1%
Join us as we follow the top business news through the day.
How Covid-19 affected the US elections
Markets soar for 5th straight day; Sensex rallies 553 pts
A week of steady gains for stocks comes to an end.
PTI reports: "Rising for the fifth straight session, equity benchmark Sensex rallied 553 points on Friday, tracking gains in index-heavyweights Reliance Industries and HDFC twins amid massive foreign fund inflow.
The 30-share BSE index ended 552.90 points or 1.34 per cent higher at 41,893.06.
Similarly, the broader NSE Nifty surged 143.25 points or 1.18 per cent to 12,263.55.
Reliance Industries was the top gainer in the Sensex pack, surging over 3 per cent, followed by Bajaj Finserv, IndusInd Bank, HDFC twins and Kotak Bank.
On the other hand, Maruti, Bharti Airtel, Asian Paints, UltraTech Cement and Nestle India were among the laggards.
According to Hemant Kanawala, Head — Equity, Kotak Mahindra Life Insurance, Indian markets rallied in sync with its global peers, putting to the backburner the uncertainties in the US presidential election. They delivered a broad-based performance, with both Nifty and Nifty midcap indices returning 1.5 per cent over the last week.
Global markets have looked beyond the close finish in the US elections and are gearing up and reacting to a win for the democrats, he said, adding that a Democrat-led dispensation with a less restrictive trade policy, benign immigration policies will be a key positive for emerging markets, including India.
“We believe, collectively, these global factors will propel the markets to pre-COVID levels over the coming days,” he noted.
Further, the US Federal Reserve said its key interest rate will be left at a record low, near zero. It reaffirmed its readiness to do more to support the economy under threat from a worsening coronavirus pandemic.
Elsewhere in Asia, bourses in Shanghai ended in the red, while Hong Kong, Seoul and Tokyo closed with gains.
Stock exchanges in Europe were trading on a negative note in early deals.
Meanwhile, international oil benchmark Brent crude was trading 1.93 per cent lower at USD 40.14 per barrel.
Foreign institutional investors remained net buyers in the capital market as they purchased shares worth Rs 5,368.31 crore on Thursday, according to provisional exchange data.
In the forex market, the rupee settled 28 paise higher at 74.08 against the US dollar."
NBFCs with substantial systemic risks must be subjected to higher degree of regulation: RBI DG
Words of caution from one of RBI's Deputy Governors.
PTI reports: "Asserting the need to recalibrate regulations for shadow banking sector, Reserve Bank Deputy Governor M Rajeshwar Rao on Friday said NBFCs with significant externalities and which contribute substantially to systemic risks must be identified and subjected to a higher degree of regulation.
“One can also argue that the design of prudential regulatory framework for such NBFCs can be comparable with banks so that beyond a point of criticality to systemic risks, such NBFCs should have incentives either to convert into a commercial bank or scale down their network externalities within the financial system,” he said.
This would make the financial sector sound and resilient while allowing a majority of non-banking financial companies (NBFCs) to continue under the regulation-light structure, Rao said while addressing a virtual conference organised by Assocham.
Within the proportionality paradigm, he said, one must deal with entities which neither belong to the critical ones in terms of systemic risk nor are they too small in scale and complexity.
Observing that NBFCs currently enjoy great degree of regulatory arbitrage vis-a-vis banks, he said, these entities can contribute to build-up of systemic risks because of the regulatory arbitrage enjoyed by them and hence there is a need to recalibrate the regulations.
“We could perhaps consider a graded regulatory framework for NBFCs, calibrated in relation to their contribution to systemic significance,” he said.
Talking about microfinance sector, Rao said, the share of NBFCs-MFIs (microfinance institutions) in the overall microfinance sector has come down to a little over 30 per cent as several large MFIs have converted into Small Finance Banks.
“Today we are in a situation where the regulatory rigour is applicable only to a small part of the microfinance sector. There is a need to re-prioritise the regulatory tools in the microfinance sector so that our regulations are activity-based rather than entity-based,” he said.
Noting that fintech focused NBFCs keep throwing up new challenges, Rao emphasised that while making regulations for the future for fintech sector, orderly growth, customer protection and data security will remain the guiding principles for the RBI.
On consumer protection and fair conduction, the Deputy Governor said a transparent and self-disciplining mechanism has to be imagined for the future where the changing business models and newer credit delivery mechanisms do not deviate from the objective of fair treatment of the customer.
Observing that the Global Financial Crisis was primarily attributed to feather-touch regulatory approach, ignoring of liquidity risks by financial intermediaries and unabated financial innovation, he said, abundant liquidity, light-touch regulations and financial innovation have also aided the growth of the NBFCs.
Between March 31, 2009 to March 31, 2019, the total assets of NBFCs grew at a compounded annual growth rate (CAGR) of 18.6 per cent, while the balance sheets of scheduled commercial banks (SCBs) grew at a CAGR of 10.7 per cent, he said.
Consequently, the aggregate balance sheet size of NBFCs increased from 9.3 per cent to 18.6 per cent of the aggregate balance sheet size of SCBs during the corresponding period. In absolute terms, the asset size of NBFC sector (including HFCs) as on March 31, 2020 stood at Rs 51.47 lakh crore.
At the end of March 2020, NBFCs were the largest net borrowers of funds from the financial system, of which more than half of the funds were from SCBs, followed by asset management companies, mutual funds and insurance companies, he said."
India Cements reports 13-fold spike in Q2 net profit at ₹69.21 crore
India Cements on Friday reported over 13-fold increase in its consolidated net profit at ₹69.21 crore for the September quarter of the current fiscal helped by lower expenses.
It had reported a net profit of ₹5.07 crore in the July-September quarter a year ago.
Its total income during the quarter under review, however, declined 14.18% to ₹1,094.58 crore as against ₹1,275.44 crore in the corresponding quarter of the last fiscal, India Cements said in a BSE filing.
Facebook launches how-to guide for Indian small businesses to promote on its platforms
Facebook has rolled out a how-to guide for small- and medium-sized businesses (SMB) in India to help them move from offline to the social network-owned online platforms.
The technology company's SMB Guide is a step-by-step manual on how firms can build a digital presence and reach potential customers on Facebook, Instagram and WhatsApp. The guide includes themes like mobile storytelling, social media advertising, and creative performance strategies. The manual is available in English and Hindi.
Additionally, Facebook is also advancing it's skill-building programme for young businesses. The programme went virtual earlier this year, and will now be delivered via Facebook Live sessions, primarily in Hindi.
Oil falls amid rising COVID-19 cases, U.S. election uncertainty
Fears of demand disruption continue to haunt the oil market.
Reuters reports: "Oil fell more than 1% on Friday as new lockdowns in Europe to halt surging COVID-19 infections sparked concern about the outlook for demand, while markets remained on edge over drawn-out vote counting in the U.S. election.
West Texas Intermediate (WTI) futures were down 52 cents, or 1.3%, at $38.27 a barrel at 0749 GMT, while Brent crude was 48 cent, or 1.2%, lower at $40.45. Both contracts fell more than $1 earlier in the day.
Still, Brent crude is poised for a 7.8% gain this week, while WTI is set to climb 6.9%.
Italy recorded its highest daily number of infections on Thursday and cases surged by at least 120,276 in the United States, the second consecutive daily record as the outbreak spreads across the country.
“COVID-19's rampage across Europe and the U.S. is likely to deliver a hit to consumption,” said Jeffrey Halley, senior market analyst at OANDA.
“With no concrete evidence that OPEC+ is moving to slow or reverse the pace of production increases, the supply/demand imbalance has capped oil's pre-election rally,” he added.
The European Union's executive commission also cut its economic forecast and predicted the bloc won't see a rebound to pre-virus levels until 2023.
Vote counting and trends from the U.S. election point to the Republicans retaining control of the Senate, while Democrats are expected to take a slimmed majority in the House of Representatives, dashing hopes for a large stimulus package, another factor weighing on oil.
President Donald Trump, without providing evidence, late on Thursday said he would win the election if “legal” votes were counted, the latest effort to cast doubt on counting now heading for a third day.
“The most critical questions for oil are how quickly a COVID-19 vaccine is widely available, whether a U.S. stimulus deal can be achieved in a fractious and uncertain political environment, and how OPEC will respond to demand concerns,” said Stephen Innes, chief global market strategist at Axi.
The Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, is expected to delay bringing back 2 million barrels per day of supply in January, given the decline in demand from new COVID-19 lockdowns.
Providing some support for the market, U.S. inventories of crude oil plunged last week, although much of the fall was attributed to production being shut down as another hurricane swept through the Gulf of Mexico.
Stockpiles fell by 8 million barrels in the week to Oct. 30, against analyst expectations of a rise of nearly 900,000 barrels."
Amazon Web Services investment of $2.77 billion largest FDI for Telangana
Cloud computing firm Amazon Web Services is setting up an AWS Region with three Availability Zones in Hyderabad, at an estimated capital investment of $2.77 billion, making it the largest foreign direct investment, Telangana has attracted.
“This investment from AWS is going to be the largest FDI the State has attracted since inception [in 2014] and will act as a strong anchor for attracting other technology investments,” Telangana Minister for IT and Industries K.T. Rama Rao said on the Amazon.com firm’s decision.
A release from the IT and Industries Departments said “The AWS Asia Pacific (Hyderabad) Region is expected to start operations by mid-2022. The Availability Zones (AZs) consist of multiple data centres in separate distinct locations within a single region that are engineered to be operationally independent of one another with independent power, cooling, physical security, and connections via a low-latency network.”
Voltas Q2 profit falls 26% at Rs 80 crore
The pandemic didn't help Voltas' cause this season.
PTI reports: "Tata Group consumer electronics firm Voltas on Friday reported 25.74 per cent decline in consolidated net profit at Rs 79.66 crore for September quarter 2020-21.
The company had posted a net profit of Rs 107.28 crore for the same quarter last fiscal.
Total income during the period under review stood at Rs 1,650.80 crore, up 10.45 per cent as against Rs 1,494.56 crore in the year-ago quarter, Voltas said in a regulatory filing.
Shares of the company were trading 1.72 per cent higher at Rs 753.30 apiece on the BSE."
RIL shares jump over 3% after Saudi Arabia’s PIF invests Rs 9,555 crore in Reliance Retail
Another large investor picks a stake in RIL.
PTI reports: "Shares of Reliance Industries Ltd gained over 3 per cent in early trade on Friday after the company’s retail arm raised Rs 9,555 crore from Public Investment Fund (PIF) of Saudi Arabia.
The market-heavyweight stock jumped 3.37 per cent to Rs 2,021 on the BSE.
At the NSE, it rose by 3.32 per cent to Rs 2,020.
Billionaire Mukesh Ambani-run Reliance Industries Ltd’s retail arm on Thursday raised Rs 9,555 crore from Public Investment Fund (PIF) of Saudi Arabia, taking total fundraise in the last two months to Rs 47,265 crore.
PIF will take a 2.04 per cent stake in Reliance Retail Ventures Ltd (RRVL), the Indian firm said in a statement.
The investment values RRVL, the retail arm of Reliance Industries Ltd, at a pre-money equity value of Rs 4.587 lakh crore.
This is the second investment by the Saudi Arabian sovereign wealth fund in an Ambani firm. It had previously picked up 2.32 per cent stake in Jio Platforms, the digital and telecom arm of Reliance, for Rs 11,367 crore.
“This investment will further strengthen PIF’s presence in India’s dynamic economy and promising retail market segment,” the statement said."
WhatsApp starts payment service in India
WhatsApp makes further foray into the Indian market.
PTI reports: "WhatsApp on Friday said it is rolling out its payments services in India after receiving nod from the National Payments Corporation of India (NPCI).
In 2018, the Facebook-owned company had started testing its UPI-based payments service in India, which allows users to utilise the messaging platform to send and receive money. The testing was limited to about a million users as it waited for regulatory approvals to come in.
On Thursday, NPCI - which runs the Unified Payments Interface (UPI) used for real-time payments between peers or at merchants’ end while making purchases - allowed WhatsApp to start its payments service in the country in a “graded” manner, starting with a maximum registered user base of 20 million in UPI.
“Starting today, people across India will be able to send money through WhatsApp. This secure payments experience makes transferring money just as easy as sending a message. People can safely send money to a family member or share the cost of goods from a distance without having to exchange cash in person or going to a local bank,” WhatsApp said in a blogpost.
It added that the payments feature has been designed in partnership with NPCI using UPI, an India-first, real-time payment system that enables transactions with over 160 supported banks.
In June this year, WhatsApp had launched ‘WhatsApp Pay’ in Brazil - making it the first country where the service was widely rolled out.
In India, WhatsApp - which counts India as its biggest market with over 400 million users - will compete with players like Paytm, Google Pay, Walmart-owned PhonePe and Amazon Pay.
“Payments (service) on WhatsApp is now available for people on the latest version of the iPhone and Android app... We’re excited to join India’s campaign to increase the ease and use of digital payments, which is helping expand financial inclusion in India,” it said adding that users will need to have a bank account and debit card in India to send money through the platform in India.
WhatsApp said it is working with five banks in India - ICICI Bank, HDFC Bank, Axis Bank, the State Bank of India, and Jio Payments Bank - and people can send money on WhatsApp to anyone using a UPI supported app.
“In the long run, we believe the combination of WhatsApp and UPI’s unique architecture can help local organisations address some of the key challenges of our time, including increasing rural participation in the digital economy and delivering financial services to those who have never had access before,” it added.
WhatsApp noted that its payments service is designed with a strong set of security and privacy principles, including entering a personal UPI PIN for each payment.
“There is no fee... because its WhatsApp, you know its secure and private too. With UPI, India has created something truly special and is opening up a world of opportunities for micro and small businesses that’s the backbone of the Indian economy,” Facebook CEO Mark Zuckerberg said in a video message.
He added that the payments service will be available in 10 Indian language versions of WhatsApp.
Interestingly, the approval for WhatsApp came on the same day as NPCI limited a single third party like WhatsApp or its rivals like Google Pay or Walmart’s PhonePe to handle only 30 per cent of overall UPI transaction volumes by putting a cap. This is expected to allay fears of potential monopolisation.
Recently, PhonePe had announced crossing the 250 million registered user milestone and over 100 million monthly active users (MAU), and had 835 million UPI transactions in October with a market leading share of over 40 per cent.
Google had 67 million monthly active users in September last year, and on the merchant side, it had over three million active merchant’s data for June 2020. Google Pay has not shared any updated stats since September 2019.
UPI processed over 2.07 billion transactions in October (worth Rs 3.86 lakh crore), up from over 1.8 billion in the previous month, as per data from NPCI."
Maruti Suzuki to recall 40,453 units of Eeco
Maruti Suzuki on Thursday said it would recall of 40,453 units of its Eeco van for a possible issue relating to standard symbol missing on the head lamp.
The recall will cover vehicles manufactured between November 4, 2019 and February 25, 2020, as well as a few Eeco vehicles in which headlamp has been replaced in the field, it added.
“Any action, if required, shall be undertaken free of cost. Owners of the suspected vehicles under this recall campaign will be contacted by Maruti Suzuki authorised dealers in due course of time,” the company said in a statement.
Nasdaq futures up most since 2008
Rupee zooms 44 paise to 73.92 against US dollar in early trade
A great open to the day for the rupee this morning.
PTI reports: "The rupee strengthened by 44 paise to 73.92 against the US dollar in opening trade on Friday, supported by foreign portfolio flows even as investors continued to wait for the outcome of the US elections.
Traders said positive domestic equities and expectation of Joe Biden’s victory in the US presidential election supported the local unit.
At the interbank forex market, the domestic unit opened at 73.99 against the US dollar, then gained further ground and touched 73.92, registering a rise of 44 paise over its previous close.
On Thursday, the rupee gained 40 paise to end at 74.36 against the US dollar.
“The US dollar has been badgered as Joe Biden closed in on a victory and the US Federal Reserve reiterated its commitment to keeping the policy stance accommodative until its target of getting the inflation to overshoot 2 per cent moderately for sometime is achieved,” said Abhishek Goenka, Founder and CEO, IFA Global.
Goenka further said that “overall risk sentiment is upbeat. A Biden White House would bring more stability and reduce uncertainty in foreign policy as well as domestic policy; and therefore, though it seems like the Republicans are on course to retain control of the Senate, investors do not seem to be too bothered about it at this stage“.
Reliance Securities in a report said that the uptick in the rupee was supported by foreign portfolio flows. “We could see Reserve Bank of India’s presence in the market today to curb volatility,” it added.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.12 per cent up at 92.63.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 235.46 points higher at 41,575.62 and broader NSE Nifty surged 66.45 points to 12,186.75.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 5,368.31 crore on Thursday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, fell 2.39 per cent to USD 39.95 per barrel."
Demand for contractual, gig staff jumps 30%: Quess
The demand for contractual employees and specialised gig workers has increased 30% compared with last year. This is expected to increase further as employers ‘variabilise’ their headcount and focus on outcome-driven programmes, said leading business services provider Quess Corp. The firm unveiled a dedicated platform, QJobs, for blue collar jobs on Thursday.
QJobs aims to address the issues of job creation, job discoverability and job-matching by providing a comprehensive solution that allows employers to find the right talent. It will allow job-seekers to showcase their skills and find employment closer to their location, the company said.
Sensex jumps over 200 points in early trade; Reliance jumps 3%
A good start to the last day of trading this week.
PTI reports: "Equity benchmark Sensex jumped over 200 points in early trade on Friday, tracking gains in index-heavyweights Reliance Industries, HDFC twins and TCS amid massive foreign fund inflow and largely positive cues from global markets.
The 30-share BSE index was trading 190.72 points or 0.46 per cent higher at 41,530.88.
Similarly, the broader NSE Nifty climbed 50.80 points or 0.42 per cent to 12,171.10.
Reliance Industries was the top gainer in the Sensex pack, surging around 3 per cent, followed by M&M, Bajaj Auto, Tata Steel, NTPC, Titan and HDFC.
On the other hand, Tech Mahindra, Nestle India, Bharti Airtel, PowerGrid and Infosys were among the laggards.
In the previous session, Sensex surged 724.02 points or 1.78 per cent to close at 41,340.16. The benchmark has wiped off all losses for the 2020 calendar year. It closed at 41,306.02 on January 1, 2020.
The broader NSE Nifty also zoomed 211.80 points or 1.78 per cent to finish at 12,120.30 on Thursday.
Foreign institutional investors remained net buyers in the capital market as they purchased shares worth Rs 5,368.31 crore on Thursday, according to provisional exchange data.
According to market experts, despite the uncertainty around the US elections, the equities have rallied strong globally on expectations of a fiscal stimulus soon along with little scope for aggressive changes in taxation given the thin winning margin.
Stock exchanges on Wall Street ended with significant gains in overnight sessions.
Further, the US Federal Reserve said its key interest rate will be left at a record low near zero. It reaffirmed its readiness to do more to support the economy under threat from a worsening coronavirus pandemic.
Elsewhere in Asia, bourses in Shanghai and Hong Kong were in the red, while Seoul and Tokyo were trading with gains in mid-session deals.
Meanwhile, international oil benchmark Brent crude was trading 1.98 per cent lower at USD 40.12 per barrel."
Pent-up demand to spur car sales till March: Hyundai
Hyundai Motor India, which posted record wholesale numbers last month, expects strong momentum to continue at least till March 2021, driven by pent-up demand from a million customers who delayed their purchases due to COVID-19. After March 2021, the industry, however, may see an adjustment period, a top company official said.
“As per our internal estimates, almost one million customers delayed or postponed their purchasing decision due to the pandemic situation,” Hyundai Motor India MD and CEO S.S. Kim said in an interview. “Also, there is new demand from the trend of shift to personal mobility from shared mobility. These factors will continue in the coming quarters as well,” he added.
Mr. Kim said he expected stable demand in the October-December 2020 and January-March 2021 quarters, followed by an “adjustment period”. He added that demand would be determined by the macroeconomic environment, including GDP growth, employment status and banking-related factors.