Category: Business

A moderate correction in stocks after a week of significant gains.

Reuters reports: “Indian shares slid on Friday, dragged by banking and financials as investors offloaded some overbought stocks, while muted Asian markets and rising domestic coronavirus cases added to the pessimism.

The NSE Nifty 50 index fell 0.75% at 11,132.50 by 0350 GMT and the benchmark S&P BSE Sensex was down 0.82% at 37,829.60. However, both indexes were on track for a fifth straight week of gains.

The Nifty and Sensex have gained more than 33% each since India first went into lockdown in late March, while coronavirus cases that numbered in hundreds at that time, have touched 1.29 million by Friday morning, according to government data https://www.mohfw.gov.in.

Broader Asian markets saw a muted start as China vowed retaliation against the United States after Washington closed Beijing’s consulate in Houston, Texas.

In Mumbai, banking and financial stocks led losses. The Nifty banking index, which tracks both state-owned and private-sector lenders, slid 1.3% and the Nifty financials index shed 1.4%.

Large shadow lender HDFC Ltd was the top laggard on the Nifty among stocks, falling 2.1%, followed by the country’s biggest lender by assets State Bank of India, which slid 2%.

Pharma stocks, however, gained for the day with the Nifty pharma index rising 1.3%. Drugmaker Sun Pharma rose 3.8% and topped the Nifty gainers.

Reliance Industries gained for a sixth day in a row, after a media report that Amazon was in talks for a potential investment in the conglomerate’s retail arm.”

With inputs from The Hindu

PTI

New Delhi: Gold jumped Rs 244 to Rs 50,230 per 10 gram in the national capital on Wednesday following rally in international price, according to HDFC Securities.

In the previous trade, the precious metal had closed at Rs 49,986 per 10 gram.

Silver also witnessed buying as it rose by Rs 673 to Rs 54,200 per kg from Rs 53,527 per kg on Tuesday.

In the international market, gold was trading with gains at USD 1,813 per ounce, while silver was quoting at USD 19.35 per ounce.

“Gold prices witnessed buying since Tuesday on souring US-China relations. The constant surge in virus cases have also supported gold prices to trade firm,” HDFC Securities Senior Analyst (Commodities) Tapan Patel said.

PTI

Mumbai: The Indian rupee weakened by 21 paise to close at 75.20 against the US dollar on Friday, tracking lower equities as investors seemed moving away from riskier assets amid worries over mounting COVID-19 cases.

Further, the stronger US dollar against key rival currencies also put pressure on the domestic unit.

The dollar index, which measures the American currency’s strength against a basket of major currencies, was at 96.7910, up 0.09 per cent.

At the interbank foreign exchange market, the rupee opened weaker at 75.16 a dollar against the previous day’s close of 74.99.

During the session, it swung between a high of 75.12 and low of 75.33 before settling at 75.20, showing a loss of 21 paise.

On a weekly basis, the rupee logged a loss of 54 paise.

“The USD/INR spot respected the crucial support of 74.50 and bounced towards 75.30 zone mainly on coronavirus concerns and RBI intervention, Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services, said.

Also, the fear that renewed lockdown may derail economic recovery all over the world led traders seek shelter of gold, which is a safe-haven asset, he added.

Global crude oil benchmark Brent Futures fell 1.79 per cent to USD 41.59 per barrel.

On the equity market front, the BSE benchmark Sensex was trading lower by 193 points at 36,544.62, while the NSE Nifty was down 57.15 points at 10,756.30 in late afternoon deals.

Meanwhile, India saw yet another record single-day jump of 26,506 COVID-19 cases pushing its tally to 7,93,802 on Friday.

The death toll climbed to 21,604, according to health ministry data.

PTI

Mumbai: The rupee depreciated 9 paise to settle at 75.02 (provisional) against the US dollar on Wednesday tracking volatile domestic equities, rising crude oil prices and strengthening American currency.

While foreign fund inflows supported the rupee, factors like strong dollar, volatile domestic equities and rising COVID-19 cases dragged the local unit down, Forex traders said.

The rupee opened on a positive note at 74.88 at the interbank forex market, but lost ground and settled for the day at 75.02 against US dollar, down 9 paise over its last close.

It had settled at 74.93 against the US dollar on Tuesday.

During the four-hour trading session, the domestic unit witnessed an intra-day high of 74.87 and a low of 75.05 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.01 per cent to 96.89.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 78.64 points higher at 36,753.16 and broader NSE Nifty rose 20.90 points to 10,820.55.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 829.90 crore on Tuesday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, rose 0.32 per cent to USD 43.22 per barrel.

Meanwhile, the number of cases around the world linked to COVID-19 has crossed 1.18 crore and the death toll has topped 5.44 lakh.

In India, the death toll due the disease rose to 20,642 and the number of infections increased to 7,42,417, according to the health ministry.

PTI

Mumbai: The rupee pared initial gains to settle down by 2 paise at 74.68 against the US dollar on Monday due to firming crude oil prices and dollar buying by importers.

Gains in domestic equities, foreign fund inflows and a weak US currency helped restrict rupee losses, forex dealers said.

In a highly volatile session, the rupee opened at 74.53 against the US dollar, and touched an intra-day high of 74.52 and a low of 74.82.

The domestic unit finally closed at 74.68 against the US dollar, down 2 paise over its previous close of 74.66 on Friday.

“Despite lower safe-haven currencies, the rupee was unable to add gains today amid higher crude oil prices and bargain buying of dollars by the importers. The Indian rupee gained 1.32 per cent or one rupee a dollar in the previous week,” Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities said.

Vakil further said that the trend for the Indian rupee remains on bullish side following weaker dollar index and foreign fund inflows.

“Spot USDINR is having support at 74.30 and resistance at 75 for next couple of days,” he said.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.24 per cent to 96.94.

On the domestic equity market front, the 30-share BSE benchmark Sensex settled 465.86 points, or 1.29 per cent, higher at 36,487.28; while the NSE Nifty soared 156.30 points, or 1.47 per cent, to 10,763.65.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 857.29 crore on Friday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, rose 1.66 per cent to USD 43.51 per barrel.

Meanwhile, the number of cases around the world linked to COVID-19 has crossed 1.14 crore and the death toll has topped 5.34 lakh.

In India, the death toll due to the disease rose to 19,693 and the number of infections spiked to 6,97,413, according to the health ministry.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 74.7843 and for rupee/euro at 84.0486. The reference rate for rupee/British pound was fixed at 93.2720 and for rupee/100 Japanese yen at 69.56.

PTI

New Delhi: Gold in the national capital zoomed Rs 647 to Rs 49,908 per 10 grams on Wednesday in line with gains in the international prices of the precious metal, according to HDFC Securities.

In the previous trade, the precious metal had closed at Rs 49,261 per 10 gram.

Silver also jumped Rs 1,611 to Rs 51,870 per kg, from Rs 50,259 per kg on Tuesday.

“Spot gold prices for 24 karat gold in Delhi recorded hefty gains by Rs 647 reflecting gains in international gold prices,” HDFC Securities Senior Analyst (Commodities) Tapan Patel said.

In the international market, gold was trading with gains at USD 1,788 per ounce and silver at USD 18.34 per ounce.

Gold prices extended rally on Wednesday as growing coronavirus cases boosted buying in gold on safe-haven demand, he added.

PTI

Mumbai: Equity benchmark Sensex surrendered all its early gains to end 46 points lower on Tuesday as investors turned cautious ahead of Prime Minister Narendra Modi’s address to the nation.

After jumping 272.39 points during the day, the 30-share index turned negative and settled 45.72 points, or 0.13 per cent, down at 34,915.80; while the NSE Nifty slipped 10.30 points, or 0.10 per cent, to 10,302.10.

PowerGrid was the top laggard in the Sensex pack, shedding around 2 per cent, followed by Sun Pharma, ITC, ONGC, Bharti Airtel and Reliance Industries.

On the other hand, Maruti, Nestle India, ICICI Bank and UltraTech Cement were among the gainers.

Indian market pared intra-day gains as participants adopted a wait and watch approach ahead of Modi’s address.

Concerns over rising COVID-19 cases and its impact on economic recovery remained a key factor for investors, analysts said.

The number of cases around the world linked to the disease has crossed 1.03 crore and the death toll has topped 5.05 lakh.

In India, the number of infections spiked to 5,66,840 and the death toll rose to 16,893.

Meanwhile, bourses in Shanghai, Hong Kong, Japan and Seoul ended with significant gains.

However, stock exchanges in Europe started on a tepid note.

International oil benchmark Brent crude futures fell 1.36 per cent to USD 41.28 per barrel.

On the currency front, the rupee settled 7 paise higher at 75.51 against the US dollar.

PTI

Balance-sheet recession looms: S&P

S&P Global Ratings on Friday said the Indian economy is in deep trouble with growth expected to contract by 5% this fiscal.

“India’s economy is in deep trouble. Difficulties in containing the virus, an anaemic policy response, and underlying vulnerabilities, especially across the financial sector, are leading us to expect growth to fall by 5% this fiscal year before rebounding in 2021,” S&P said in a report.

In its report titled ‘Asia-Pacific losses near $3 trillion as balance sheet recession looms,’ S&P projected the region’s economy to shrink by 1.3% in 2020, but grow by 6.9% in 2021. This implies a loss nearing $3 trillion in output over these two years.

“Asia-Pacific has shown some success in containing COVID-19 and, by and large, responded with effective macroeconomic policies,” said Shaun Roache, chief economist for Asia-Pacific at S&P Global Ratings.

Cushioning the blow

“This can help cushion the blow and provide a bridge to the recovery. The recovery looks set to be weighed down by indebted balance sheets, however.”

One risk now looming larger is yet another ‘balance sheet recession’ in which at least one important sector of the economy — the government, firms, or households — tries to bolster its weak financial position by saving more, paying down debt and spending less, S&P said.

“The downturn caused by COVID-19 did not start as a balance-sheet recession but may end up as one,” Mr. Roache said. “This means less investment, slower recovery, and a permanent hit to the economy that will last even after a vaccine is found.”

The pandemic caused a sudden stop in activity and to prevent a collapse, policymakers, helped by banks, have provided extraordinary financial support to firms and households.

Banks may lend less than they normally would in a recovery to focus on the overhang from the pandemic. Private firms may prefer to stabilise debt rather than ramp up spending on new investments, even though demand is improving.

S&P kept its forecasts for growth in the Chinese economy at 1.2% and 7.4% for 2020 and 2021, respectively.

Says economy to fall into recession, asset quality to deteriorate, credit costs to rise

S&P Global Ratings on Friday downgraded Axis Bank’s rating to BBB- from BB+ saying the rating action reflected its view that economic risks had increased for banks operating in India.

“We have lowered our ratings on Axis to reflect our expectation that heightened economic risks facing India’s banking system will affect the bank’s asset quality and financial performance,” it said.

S&P said while Axis’s asset quality was superior to the Indian banking sector average, its level of non-performing assets (NPAs) will likely remain high compared with the international peers. The rating major has placed ratings of Indian Bank on ‘Credit Watch’ as it sees high risk that the public sector bank’s credit profile could weaken over the coming quarters due to COVID-19 as well as the merger with the weaker Allahabad Bank.

S&P expects the Indian economy to slip into recession in the current fiscal year and anticipate Indian banks’ asset quality to deteriorate, credit costs to rise, and profitability to decline over the next 12 months.

“We affirmed the ratings on the other banks we rate in India,” S&P added.

With inputs from The Hindu

PTI

New Delhi: Petrol price on Saturday was hiked by 25 paise per litre and diesel by 21 paise, taking the cumulative increase in rates in three weeks to Rs 9.12 and Rs 11.01 respectively.

Petrol price in Delhi was hiked to Rs 80.38 per litre from Rs 80.13, while diesel rates were increased to Rs 80.40 a litre from Rs 80.19, according to a price notification of state oil marketing companies.

Rates have been increased across the country but the final retail selling price differs from state to state depending on the incidence of local sales tax or VAT.

In Mumbai, petrol price went up from Rs 86.91 per litre to Rs 87.14, while diesel rate was hiked to Rs 78.71 from Rs 78.51.

While diesel rates have been hiked for the 21st straight day, petrol price has been raised on 20 occasions in three weeks.

The cumulative increase since the oil companies started the cycle on June 7 now totals to Rs 9.12 for petrol and Rs 11.01 for diesel.

On June 7, oil companies had restarted revising prices in line with costs after ending an 82-day hiatus during which they adjusted steep excise duty hikes by the government against the fall in benchmark international oil rates.