Category: Business

PTI

New Delhi: Gold prices plunged by Rs 1,492 to Rs 52,819 per 10 grams on Thursday in the national capital in line with sell-off in international prices of the precious metal, according to HDFC Securities.

The precious yellow metal had closed at Rs 54,311 per 10 grams in the previous trade.

Silver also witnessed weak trend as it tanked Rs 1,476 to Rs 67,924 per kg, from Rs 69,400 per kg in the previous day.

In the international market, gold was trading lower at USD 1,927 per ounce and silver was quoting marginally higher at USD 26.71 per ounce.

“Gold prices continued downtrend on Thursday with stronger dollar post US Federal Open Market Committee (FOMC) minutes,” HDFC Securities Senior Analyst (Commodities) Tapan Patel said.

As per the FOMC minutes, the committee members have expressed concern over the continuing impact of the COVID-19 pandemic on economic growth.

PTI

Mumbai: The rupee opened 18 paise lower and slipped below the 75 per US dollar mark in opening trade on Thursday after the US Fed meeting minutes signalled at the central bank’s concern over COVID-19 and its impact on economy.

The local unit opened at 75 at the interbank forex market, then lost ground and touched 75.01 against the US dollar, down 19 paise over its last close of 74.82.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.08 per cent to 92.96.

Forex traders said strong dollar, weak domestic equities and muted Fed minutes weighed on investor sentiment.

“The US dollar has strengthened overnight after the release of US Federal Open Market Committee (FOMC) minutes that were less dovish than expected,” said Abhishek Goenka, Founder and CEO, IFA Global.

As per the FOMC minutes, the committee members have expressed concern over the continuing impact of COVID-19 on economic growth.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 298.34 points lower at 38,316.45 and the broader NSE Nifty fell 75.25 points to 11,333.15.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 459.01 crore on Wednesday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, fell 0.79 per cent to USD 45.01 per barrel.

Meanwhile, the number of cases around the world linked to COVID-19 has crossed 2.24 crore and in India, the number of infections topped the 28-lakh mark.

PTI

Mumbai: Market benchmarks Sensex and Nifty broke their three-session losing streak on Monday as gains in power, metal and auto stocks offset losses in banking counters.

After opening 185 points higher, the BSE Sensex was gripped by early volatility and swung about 386 points during the session. The 30-share index finally settled 173.44 points or 0.46 per cent higher at 38,050.78.

Likewise, the NSE Nifty ended 68.70 points or 0.61 per cent up at 11,247.10.

On the Sensex chart, NTPC, Bajaj Auto, Tech Mahindra, ONGC and Maruti were among the major gainers, climbing up to 7.92 per cent.

On the other hand, SBI, Bharti Airtel, RIL, Sun Pharma and ICICI Bank and HDFC Bank ended with losses.

Bourses in Asia, barring Japan, closed significantly higher.

Japan’s Nikkei slumped after the country’s GDP shrank 7.8 per cent in the April-June period compared with the previous quarter.

International crude oil benchmark Brent was trading 0.40 per cent higher at USD 45.13 per barrel.

Analysts, meanwhile, said concerns over rising coronavirus cases around the globe will continue to weigh on investor sentiment.

India’s total COVID-19 cases neared 26.5 lakh and the death toll from the infection climbed past 50,000-mark, official data showed.

Globally, the number of cases surpassed 2.16 crore and deaths topped 7.74 lakh.

Bengaluru: India’s most valuable company Reliance Industries Limited (RIL) is reportedly the latest bidder for the Bytedance-owned TikTok in India.

The Mukesh Ambani-led firm had begun talks last month with the Chinese firm to acquire its operations in India. The deal is said to be valued at $5 billion.

India is the largest market for the short video app outside China with more than 611 million downloads generated till date, according to data sourced from market intelligence firm Sensor Tower. However, when it comes to monetization, China, US and UK accounted for 90% of the total TikTok revenues.

Although, Reliance and Bytedance both denied any information on the reported deal, industry analysts predict that Reliance’s acquisition of TikTok is the most likely scenario especially after the Chinese app was banned by the Indian government in June on the grounds of threats to national security and data privacy.

Interestingly, Facebook, which is the largest minority stakeholder in Reliance’s Jio platforms, has also recently launched Instagram Reels in India, where the users can make a short video, embedded in the photo-sharing platform.

Sanchit Vir Gogia, CEO, Greyhound Research wrote in his note that in the present circumstances, Bytedance’s deal with Reliance Jio could be a viable option to clear the regulatory hurdles in India while also helping leverage the nearly 400 million users base of Jio.

“Although Instagram Reels is being described as a clone of TikTok, the fact is that the similarity of the features may act as an advantage and help the Facebook backed photo-sharing app onboard millions of users in India who were earlier using TikTok. Facebook still has a larger user base than TikTok in India and over the course of time, Instagram Reels can leverage the massive network Facebook has in India. Reels was first smartly tested in low-risk markets and then rolled out in India for scale and mass content – while it may not come across as integrated with other products, it may be too early to judge. Leverage with a broader FB network makes Instagram Reels more compelling than TikTok,” Gogia added.

Tech giant Microsoft had earlier said that it is planning to purchase TikTok in the US and other key markets.

US President Donald Trump’s latest executive order last week serving a 45-day deadline for the TikTok sale may likely lead to fastracking the potential sale. Microsoft had confirmed that it is in talks with Bytedance to acquire TikTok and that the discussions will be concluded by September 15.

With inputs from Express News Service

PTI

New Delhi: Gold prices tanked Rs 1,228 to Rs 52,946 per 10 gram in the national capital on Wednesday, according to HDFC Securities.

In the previous trade, the yellow metal had closed at Rs 54,174 per 10 gram.

Silver prices also plunged Rs 5,172 to Rs 67,584 per kg from Rs 72,756 per kg in the previous trade.

“Spot gold prices for 24 carat in Delhi were down by Rs 1,228,” HDFC Securities Senior Analyst (Commodities) Tapan Patel said.

In the international market, gold was trading with gains at USD 1,930 per ounce, while silver was quoting at USD 25.70 per ounce.

“Gold prices witnessed recovery on Wednesday after falling below USD 1,900 in morning trade,” he added.

Patel further said that coronavirus vaccine announcement by Russia had triggered sell-off in safe-haven assets.

Gold prices had earlier fallen on strong dollar recovery, HDFC Securities said.

Safe-haven demand continues to propel gold to new highs.

Reuters Reports: “Gold smashed a record high on Friday as a safety rush fuelled by the worsening coronavirus pandemic and its mounting economic toll gathered pace and put bullion on track for its longest weekly winning streak in nearly a decade.

Spot gold was up 0.3% at $2,069.78 per ounce by 0308 GMT after hitting an all-time high of $2,072.50 in early trade. It has added 4.7% so far this week in what would be its ninth straight weekly gain. U.S. gold futures rose 0.6% to $2,081.60.

Silver too continued its stellar run. It rose as much as 3.1% to $29.84, adding nearly 19% so far this week in what would be its best week since 1987.

“It’s difficult to hold anything but a constructive view (on gold),” said ING analyst Warren Patterson.

“Whilst the pace of the rally may slow, there certainly does seem to further upside in the near term, and for the remainder of the year.”

Surging COVID-19 cases in the United States have dampened hopes for a nascent economic recovery and weighed on rival safe-haven dollar. The greenback was headed for its seventh consecutive weekly decline.

Gold is likely to hover around $2,020-2,080 an ounce in the near term, said National Australia Bank economist John Sharma.

“The key factor will be how this virus plays out, and whether there is any progress on vaccines,” he added.

Benchmark 10-year U.S. Treasury yields were at five-month lows, making the non-interest bearing bullion an attractive investment, and helping it rise more than 35% so far this year.

The next focus is closely-watched U.S. employment data, due at 1230 GMT, which is expected to show a payroll increase of 1.58 million in July, compared to 4.8 million in the previous month.

Our Chief Market Strategist, @JReade_WGC recently joined Norman Villamin and Peter Kinsella from @UBP_Group for a webinar on the strategic case for #gold. Watch now on #Goldhub: https://t.co/T7KbenKjks pic.twitter.com/Eyc1qP0sik

— World Gold Council (@GOLDCOUNCIL) August 6, 2020

“A below consensus number could provide another boost for gold,” ING’s Patterson said.

Elsewhere, platinum dropped 2.1% to $976.72 an ounce and palladium fell 0.6% to $2,208.82.”

With inputs from The Hindu

AG’s view on borrowing to meet cess shortfall to be discussed by GST Council

Gross Goods and Services Tax revenue slid 14% last month to ₹87,422 crore, from the ₹1,02,083 crore collected in July 2019, data released by the Finance Ministry on Saturday show. Receipts were also almost ₹3,500 crore less than June’s collections.

The data was released on a day when a senior Finance Ministry official said an opinion had been received from the Attorney General on the legality of market borrowings to bridge any shortfall in the GST compensation fund.

“Preliminary discussions were held during the GST Council meeting in June, and it was decided to seek legal opinion on market borrowings,” the official told journalists, admitting that the Council which was originally slated to discuss this issue in July was yet to set a date for its next meeting. “The opinion has come, and we will soon hold an exclusive GST Council meeting on the compensation issue,” the official, who spoke on the condition of anonymity, added.

‘No obligation’

Press Trust of India reported, citing sources, that the Attorney General had opined that there was no obligation on the Union government to make good the shortfall in GST compensation payable to the States.

Cess collections, needed to pay compensation to States’ for the first five years of the GST regime, fell short by 42% in 2019-20, with the Centre forced to use cess collected in previous years as well as a previous transfer from the Consolidated Fund of India.

In July, cess collections amounted to ₹7,265 crore, 15% less than the ₹8,551 crore collected in the same period in 2019.

Central GST (CGST) revenue for July was ₹16,147 crore, State GST (SGST) was ₹21,418 crore, and integrated GST (IGST) ——which is to be split between States and Centre — was ₹42,592 crore.

COVID-19 relaxation

“The revenues for the last month [June] were higher than the current month [July]. However, it is important to note that during the previous month, a large number of taxpayers also paid taxes pertaining to February, March and April 2020 on account of the relief provided due to COVID-19,” the Finance Ministry said in a statement.

“It may also be noted that taxpayers with turnover less than ₹5 crore continue to enjoy relaxation in filing of returns till September 2020,” it added.

Data also showed that a decline in imports had hit tax collections in July. GST revenue from import of goods only reached 84% of the amount collected in the same month last year, while revenue from domestic transactions, including import of services, reached 96% of last July’s collections.

With inputs from The Hindu

PTI

New Delhi: Finance Minister Nirmala Sitharaman on Saturday said the Attorney General’s view on GST compensation was sought after consultation with the states and a meeting of the GST Council would be held to discuss the legal opinion.

The finance minister was responding to a question on apprehensions raised by certain states about the reported AG opinion on GST compensation.

“This matter was discussed in the GST Council meeting when it met last time. Members expressed their views on the matter and it was decided that legal opinion should be taken from AG,” Sitharaman told reporters here.

The GST Council, chaired by the Union finance minister and comprising state counterparts, had in March decided to seek views from the AG, who is the chief legal officer of the government, on the legality of market borrowing by the Council to make good the shortfall in compensation fund.

“The opinion has come…we will hold an exclusive GST Council meeting on the issue of compensation,” Sitharaman said, adding that the date of the meeting will be decided shortly.

According to sources, the Attorney General has opined that there is no obligation on the central government to pay the GST compensation shortfall to the states and GST Council has to decide on ways to make good the shortfall in compensation fund.

The payment of GST compensation to states became an issue after revenues from imposition of cess started dwindling since August 2019 and the Centre had to dive in to the excess cess amount collected during 2017-18 and 2018-19.

Under the Goods and Services Tax (GST) law, states were guaranteed to be compensated bi-monthly for any loss of revenue in the first five years of the GST implementation from July 1, 2017. The shortfall is calculated assuming a 14 per cent annual growth in GST collections by states over the base year of 2015-16.

Under the GST structure, taxes are levied under 5 per cent, 12 per cent, 18 per cent and 28 per cent slabs. On top of the highest tax slab, a cess is levied on luxury, sin and demerit goods and the proceeds from the same are used to compensate states for any revenue loss.

The Centre had released over Rs 1.65 lakh crore in 2019-20 as GST compensation. However, the amount of cess collected during the year 2019-20 was Rs 95,444 crore. The compensation payout amount was Rs 69,275 crore in 2018-19 and Rs 41,146 crore in 2017-18.

PTI

Mumbai: Yes Bank has taken over the headquarter of Anil Ambani’s group in surburban Santacruz for failure to repay dues worth Rs 2,892 crore.

The private sector lender has also taken possession of two flats in South Mumbai for the non-payment of dues by Reliance Infrastructure, according to a notice published by Yes Bank in a newspaper on Wednesday.

Nearly all the major companies in Anil Dhirubhai Ambani Group (ADAG) were operating out of the Santacruz office called ‘Reliance Centre’. However, in the last few years, the fortunes of the group have gone south with the companies meeting various fates, including bankruptcies and stake sales.

Yes Bank said it had sought to recover dues of Rs 2,892.44 crore from Reliance Infrastructure on May 6 and took possession of the three properties on July 22 after a failure to repay even after 60 days of the notice.

It cautioned the general public not to deal with the properties, adding that any dealing with the properties will be subject to a charge of Yes Bank for an amount of Rs 2,892 crore.

Last year, the group was looking to lease out the same headquarters — which admeasures 21,432 square metres as per the Yes Bank notice — in an attempt to raise resources to pay off debts.

The other two properties are spread over two different floors in South Mumbai’s Nagin Mahal, admeasuring 1,717 sq ft and 4,936 sq ft.

It can be noted that exposure to ADAG firms is blamed as among the key reasons for the high amount of bad debt piled up by Yes Bank. Due to the high amount of non-performing assets, the lender had to be bailed out by a SBI-led consortium of lenders for Rs 10,000 crore.

Before the bail-out, the government and the RBI superseded the Yes Bank board in March and installed a new chief executive and board.

On June 23, Anil Ambani had claimed that R-Infra, which has loans outstanding of Rs 6,000 crore, will be completely debt-free this fiscal year.

In 2018, the company sold its Mumbai energy business to Adani Transmission for nearly Rs 18,800 crore, which helped reduce the debt to nearly Rs 7,500 crore.

New Delhi: Diesel prices have risen to a record high following twelve successive rate hikes in as many days by state oil companies.

State oil companies raised prices of diesel and petrol by 64 paise and 53 paise per litre, respectively, on Thursday. With twelve straight hikes, the rates of diesel and petrol have gone up by a total of Rs 7.04 and Rs 6.55 per litre, respectively.

Domestic fuel prices are setting new records at a time international rates of fuels are subdued. Crude oil is trading around $40 a barrel, up from $20 a barrel in late April, but much lower than $66 a barrel at the beginning of the year.

Increased taxes by the central and state governments as well as oil companies’ expanded marketing margins have contributed to recent fuel price inflation. Companies are expected to follow the international market trend to determine domestic fuel prices, but they often deviate. Which is why Indian consumers have barely benefitted from the recent oil collapse.

With inputs from The Economic Times