Updates from the world of economy, markets, and finance
The Nifty and the Sensex opened the day on a positive note to recuperate some of the losses from yesterday.
Bitcoin’s price is in the limelight after sources revealed the Centre may ban the digital currency.
Join us as we follow the top business news through the day.
Rupee pares early gains, settles 9 paise lower at 72.55 against US dollar
The rupee’s gains didn’t last long.
PTI reports: "The rupee pared its initial gains and depreciated 9 paise to settle at 72.55 (provisional) against the US dollar on Tuesday as muted domestic equities and strengthening of the greenback overseas weighed on investor sentiment.
At the interbank forex market, the local unit opened at 72.46 against the American currency and witnessed an intra-day high of 72.37 and a low of 72.64.
It finally ended at 72.55, registering a fall of 9 paise over its previous closing. On Monday, the rupee had settled at 72.46.
"Indian Rupee depreciated amid strong dollar and muted domestic markets. Further, rupee slipped on disappointing macroeconomic data," said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.
Additionally, market remained cautious ahead of major central banks monetary policy meetings, Mukadam said.
However, sharp downside was prevented on softening of crude oil prices.
Crude oil prices slipped on concern about slow pace of vaccination in the EU after Germany, France and Italy joined other European nations to hit pause on AstraZeneca COVID-19 vaccine, Mukadam said.
Rupee may trade in the range of 72.25 to 73.00 in next couple of sessions, he added.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.04 per cent to 91.87.
Meanwhile, Brent crude futures, the global oil benchmark, fell 1.51 per cent to USD 67.84 per barrel.
On the domestic equity market front, the BSE Sensex ended 31.12 points or 0.06 per cent lower at 50,363.96, while the broader NSE Nifty fell 19.05 points or 0.13 per cent to 14,910.45.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 1,101.35 crore on Monday, according to exchange data."
Sensex, Nifty end marginally lower; financial stocks drag
The morning gains didn’t last long for stocks.
PTI reports: "Equity benchmarks Sensex and Nifty gave up early gains to end marginally lower on Tuesday, tracking losses in financial stocks.
The 30-share BSE Sensex ended 31.12 points or 0.06 per cent lower at 50,363.96, and the broader NSE Nifty slipped 19.05 points or 0.13 per cent to 14,910.45.
L&T was the top loser in the Sensex pack, shedding 1.56 per cent, followed by ICIC Bank, SBI, Kotak Bank, HDFC Bank, NTPC, Axis Bank and Bajaj Finserv.
On the other hand, Asian Paints, Dr Reddy’s, HCL Tech, HUL and Bharti Airtel were among the gainers.
Domestic equities gave up initial gains and traded flat towards the final hours of the day despite favourable cues from global equities, said Binod Modi – Head Strategy at Reliance Securities.
"Financials once again dragged the markets. Notably, IT stocks were in focus today mainly on expectations of sustained earnings momentum in 4QFY21E and benefits from possible fall in INR.
"In our view, increasing concerns with regards to resurgence of COVID-19 cases in various parts of the country and resulted restrictions could be a near term risk for domestic markets. Additionally, volatile bond markets and soaring inflation will continue to weigh on investors’ sentiments," he added.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul ended on a positive note.
Stock exchanges in Europe were also trading with gains in mid-session deals.
Meanwhile, the global oil benchmark Brent crude was trading 1.61 per cent lower at USD 67.77 per barrel."
Hero Electric sells 50,000 units in 2020
Hero continues to dominate the electric segment of the market.
PTI reports: "Hero Electric on Tuesday said it has sold over 50,000 electric two-wheelers last year thus retaining the top slot in the segment.
The company further said its sales network has crossed the 600 touchpoint mark covering 500 towns and cities across the country, thus offering the widest service network offered by any brand in the segment.
"As we come out of an extremely challenging year, we at Hero Electric are extremely proud of what we have achieved. When we were faced with the situation, we had two options at hand, and I am glad we chose to fight it out with our experience and support from each and everyone connected to us. We are proud to have achieved our goals despite all challenges," Hero Electric Chief Executive Officer Sohinder Gill said in a statement.
This year the company is looking forward to presenting an exciting lineup of products, he added.
Hero Electric, through 2021, plans to expand its Ludhiana-based manufacturing facility from an existing capacity to produce 70,000 units per year to 2.5 lakh per annum.
The company is also looking at 15 per cent sales growth in the next fiscal on the back of its hybrid sales model, a combination of online and offline sales.
The company further said it has added 1,500 new charging points through 2020-21 across various cities."
APAC not on track to achieve SDG goals by 2030; may realise 10% of target: UN report
The Asia-Pacific region lags behind in achieving the UN’s sustainable development goals.
PTI reports: "The Asia-Pacific region is lagging behind in achieving the Sustainable Development Goals (SDGs) set for 2030, and at the current rate the region may achieve less than 10 per cent of the targets, a UN report said on Tuesday.
As many as 829 million workers employed in the informal sector were impacted in April 2020 due to the pandemic-induced lockdown, the report noted.
There are 17 goals under the United Nations Economic and Social Commission for Asia and Pacific (UNESCAP), targeted to be achieved by 2030.
These include no poverty, zero hunger, good health and well being, quality education, gender equality, clean water and sanitation, affordable and clean energy, decent work and economic growth, bio-diversity, innovation and infrastructure, and reduced inequalities, among others.
"The Asia-Pacific (APAC) region is not on track to achieve any of the 17 SDGs by 2030. On its current trajectory, the region may achieve less than 10 per cent of the SDG targets," said the report titled ‘Asia and the Pacific SDG Progress Report’ of the UNESCAP.
The region must urgently reverse its regressing trends on many SDGs to achieve its ambitions by 2030, the UN report said adding Asia-Pacific fell short of its 2020 milestones even before entering the global pandemic.
"There is therefore an added urgency to ensure that responses to the pandemic in the region and at the national level accelerate progress toward the 2030 Agenda," it said.
The report also talks about the impact of mandatory lockdowns and social distancing measures on data collection activities, particularly from vulnerable groups.
Unemployment increased by 15 million in the region in 2020. Compared to 2019, workers in the region lost 7.1 per cent of their labour income in 2020, equivalent to over USD 1 trillion, it said.
"In April 2020, lockdown measures impacted some 829 million informal workers in Asia-Pacific region." Acknowledging that in the last decade, Asia-Pacific made extraordinary progress in good health and well-being, credited to partly explain its relative success in reducing the health impact of COVID-19 on its people, the report said despite these hard won gains, there are challenges in providing adequate healthcare workforce, reducing premature deaths and improving mental health.
Some subregions are well positioned to achieve a few of the goals. East and North-East Asia is on track to eradicate poverty and provide clean water and sanitation for all.
South-East Asia is on track to promote sustainable industry and innovation.
However, none of the sub-regions are on track on environment-related goals, and four sub-regions are regressing on climate action and life below water.
Making an alarming observation on regressing climate action trends and life below water goals, UNESCAP said the region is responsible for more than half of the global greenhouse gas emissions and adverse impacts of natural disasters on people and economies increase year-by-year.
"As we find our way out of this pandemic, the report suggests we must focus efforts on more equitable and greener growth," it said.
Green house gas emissions containment measures due to the pandemic resulted in a significant reduction in the hazardous emissions with a decrease in global daily carbon dioxide emissions of 17 per cent in April 2020 compared to the year-ago period.
In Asia-Pacific, this pattern has been evident in China, India, Japan and the Russian Federation.
Environmental monitoring, including satellite data clearly indicates that air quality has improved in the first half of 2020 in many countries of the region. Data shows air pollution over northern India at a 20-year low, with New Delhi and nearby areas registering a significant 50 per cent reduction of aerosol optical depth (correlating to fine particulate matter, PM2.5 and PM10) in April.
However, the report said while the drop in carbon dioxide emissions has been significant, it was also temporary and emissions rose as soon as lockdowns were lifted.
China relaxed its lockdown earlier than other countries, and the impact is particularly evident with its emissions during April to June comparable to or higher than emissions in the year-ago same months, the report pointed out.
"Recovery measures are an excellent opportunity for us to rethink our options for development pathways that are inclusive, more resilient, and respect planetary boundaries,” said United Nations Under-Secretary-General and ESCAP Executive Secretary Armida Salsiah Alisjahbana.
"As we enter the Decade of Action to deliver the 2030 Agenda for Sustainable Development, we need to reinforce our collective commitment to the SDGs and let it provide our compass for building back together, better and greener," she said.
To build back better, governments should renew their commitments to the SDGs’ monitoring framework so that recovery can accelerate a global transformation as promised by the 2030 Agenda, the report said.
The agency has also developed a National SDG Tracker tool to help the countries in the region make progress assessment on the goals.
National governments can use the tool to produce snapshots of progress towards the ambitions of the 2030 Agenda, it said."
India’s diesel sales rise as economic activity picks up
More signs of economic recovery.
PTI reports: "Indian state fuel retailers’ diesel sales rose 7.4% to 2.84 million tonnes in the first fortnight of March from a year earlier, preliminary industry data showed on Tuesday.
Petrol sales rose 5.3% to 1.05 million tonnes in the same period from a year earlier, the data showed.
This is the first annual rise in gasoil sales in the country since October. Fuel sales in India took a hit in March last year as the government imposed a nationwide lockdown to curb the spread of the novel coronavirus.
India’s economy returned to growth in the three months to December and the recovery is expected to gather pace as consumers and investors shake off the effects of the COVID-19 pandemic.
The rise in gasoil sales, which account for about two-fifths of the country’s overall fuel demand, comes despite record-high local retail prices and points to rising industrial production in the country.
State companies Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum own about 90% of India’s retail fuel outlets.
State retailers sold 3.3% less cooking gas in the first half of March than a year ago to 1.01 million tonnes as a significant reduction in subsidies curtailed demand for the fuel, the data showed.
Jet fuel sales were down 36.5% to 204,000 tonnes."
Ahead of IPO, Kalyan Jewellers mobilises ₹352 crore
Kalyan Jewellers India Ltd on Monday raised ₹352 crore from anchor investors ahead of its initial share-sale, which opens for public subscription on Tuesday.
The company’ IPO committee has decided to allocate 4,04,48,275 shares at ₹87 per piece to 15 anchor investors. At this price, the firm garnered ₹351.89 crore, Kalyan Jewellers informed BSE.
The anchor investors include the Government of Singapore, Monetary Authority of Singapore, HDFC Life Insurance Co Ltd, and BNP Paribas Arbitrage.
The ₹1,175-crore initial public offer (IPO) comprises issuance of fresh equity aggregating up to ₹800 crore and an offer for sale (OFS) worth ₹375 crore.
Twitter launches multi-lingual ‘info prompt’ ahead of Assembly elections
With Assembly elections coming up in five States, micro-blogging platform Twitter on Monday announced a dedicated ‘information search prompt’ in six languages with the Election Commission of India and State Election Commissions to tackle misinformation and provide reliable details related to elections.
The U.S.-headquartered firm has also rolled out a multilingual youth discussion series in India ‘DemocracyAdda’ aimed at driving voter literacy and civic participation among young Indians, along with a video series ‘HerPoliticalJourney’ that will focus on women political leaders.
“With the Assembly Elections 2021 taking place in Assam, Kerala, Tamil Nadu, West Bengal, and Puducherry, [We have] announced a series of initiatives focused on encouraging informed and healthy conversations between candidates, political parties, citizens, media, and society,” the company said in a statement.
AU Small Finance Bank shares gain over 4% on fund raising
A big mover among stocks.
PTI reports: "The stock of AU Small Finance Bank jumped over 4 per cent in early trade on Tuesday after the company said it has raised Rs 625.50 crore by issuing shares to a set of investors through qualified institutional placement (QIP).
Shares of the company gained 4.27 per cent to Rs 1,238.05 on the BSE.
At the NSE, it rose by 4.13 per cent to Rs 1,237.65.
The bank has completed the allotment of equity shares under QIP and has successfully raised Rs 625.5 crore through the issuance of 50,00,000 equity shares at an issue price of Rs 1,251 per share, the bank said in a regulatory filing on Monday.
The issue was launched on March 9, with a floor price of Rs 1,181.06 apiece.
The QIP witnessed strong reception from both domestic and international institutional investors and the QIP was subscribed by sovereign wealth funds, large foreign portfolio investors, life insurance companies and domestic mutual funds, AU Small Finance Bank said.
AU Bank intends to use the net proceeds for supporting long-term growth aligned to the bank’s internal risk appetite, to maintain sufficient headroom over and above the regulatory capital adequacy requirements; and for general corporate requirements or any other purposes, it said."
China factory output, retail sales accelerate
China’s industrial output growth quickened in January-February, beating expectations, as the vast manufacturing sector started 2021 on a firm footing and the economy consolidated its brisk recovery.
Retail sales in the period also rose in a boost to domestic demand, giving a strong lift to business activity on top of the recent upsurge in exports growth.
Industrial output rose 35.1% in the first two months, up from a 7.3% uptick seen in December, data from the National Bureau of Statistics showed on Monday. That was stronger than a median forecast of a 30% surge in a Reuters poll.
Bitcoin falls after weekend record high as India considers a ban
A blow for bitcoin bulls.
Reuters reports: "Bitcoin dropped on Monday, falling from a record high above $60,000 over the weekend, as investors digested a potential ban from India on cryptocurrencies.
The cryptocurrency had hit a record high of $61,781.83 on Saturday after U.S. President Joe Biden signed off on his $1.9 trillion fiscal stimulus and ordered an acceleration in vaccinations.
Because some investors tend to see bitcoin as a hedge against inflation, analysts believe the rise of bitcoin has been helped by the prospects of a steep economic recovery.
In afternoon trading, bitcoin was down 5.3% at $55,865,
A senior government official told Reuters overnight that India, Asia’s third-largest economy, is preparing a bill that would criminalise possession, issuance, mining, trading and transferring crypto-assets.
The bill was in line with India’s January government agenda that called for banning private virtual currencies such as bitcoin while building a framework for its own official digital currency.
"Renewed interest from the Indian government in banning cryptocurrencies led to the initial drop from the $60,000 range down to $56,000," said John Wu, president of AVA Labs, an open-source platform for creating financial applications using blockchain technology.
In India, despite government threats of a ban, transaction volumes are swelling and 8 million investors now hold 100 billion rupees ($1.4 billion) in crypto-investments, according to industry estimates. No official data is available.
The world’s largest virtual currency hit $61,781.83 on Saturday, rising more than 40% since late February, as investors shrugged off concerns over sky-high valuations.
Despite Monday’s pullback, many investors believe the outlook for bitcoin’s price remains tilted to the upside.
Seth Melamed, the Tokyo-based chief operating officer of cryptocurrency exchange Liquid, said legislation of the sort India is proposing will not be an impediment to further gains for bitcoin.
"Because it’s decentralized, government bans or acceptance is somewhat irrelevant," Melamed said. "Capital will find a way."
Bitcoin has risen more than 90% this year, broadly outperforming traditional asset classes, fuelled by the embrace of cryptocurrencies by mainstream companies and large investors, including Tesla Inc and Bank of NY Mellon.
"The reason bitcoin’s continued rise is such a surprise to the traditional financial market is because they are looking at its fundamentals, while they should be looking at the market forces driving its adoption," said Sergey Nazarov, co-founder of Chainlink, a decentralized network that provides data to smart contracts on the blockchain.
"Bitcoin is involved in the same market dynamic as all Fiat money, where market forces determine its value much more than any kind of clear fundamentals," he added.
Bitcoin’s record on Saturday was hit in thin markets due to the weekend, with technical factors magnifying the move higher, said Justin d’Anethan, sales manager at digital asset company Diginex in Hong Kong."
Sensex rises over 200 pts in early trade; Nifty tests 15K
Stocks bounce back after yesterday’s losses.
PTI reports: "Equity benchmark Sensex jumped over 200 points in opening trade on Tuesday, tracking gains in index majors Infosys, Reliance Industries and Asian Paints amid positive trend in global markets.
The 30-share BSE index was trading 274.03 points or 0.54 per cent higher at 50,669.11, and the broader NSE Nifty was up 75.10 points or 0.50 per cent at 15,004.60.
Asian Paints was the top gainer in the Sensex pack, rising around 2 per cent, followed by Titan, UltraTech Cement, Bharti Airtel, Infosys, Reliance Industries and M&M.
On the other hand, Bajaj Auto, NTPC and SBI were the laggards.
In the previous session, Sensex had ended 397 points or 0.78 per cent lower at 50,395.08. The broader NSE Nifty finished 101.45 points or 0.67 per cent down at 14,929.50.
Foreign institutional investors (FIIs) were net sellers in the capital market on Monday as they sold shares worth Rs 1,101.35 crore, as per exchange data.
"We are now in a highly volatile phase where the market swings on a daily basis, responding to major triggers. The major trigger now is the US bond yield which has the potential to move huge money," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Rising bond yield triggers selling in equity markets and when yields cool down buying resumes, he said, adding that bear hammering and short covering are making markets excessively volatile.
"Consecutive 2 days of institutional selling — by both FIIs and DIIs — weakened the Indian market. But this is not a directional trend. Post the Federal Open Market Committee (FOMC) meet and a possible affirmation of the dovish stance by the Fed, the market may resume its upward move. Presently top quality financials present a buying opportunity," he noted.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading on a positive note in mid-session deals.
US equities too ended with gains in the overnight session.
Meanwhile, the global oil benchmark Brent crude was trading 0.83 per cent lower at USD 68.31 per barrel."
‘Indian airports may see ₹5,400 cr. net loss in FY21’
With a sharp reduction in passenger traffic, estimated at about 66% year-on-year in FY21, the airport sector in India is expected to witness a significant net loss of ₹5,400 crore and cash loss of ₹3,500 crore during the year, says ICRA.
However, the robust liquidity of the players would help the sector sail through this unprecedented times, the rating agency said in a report.
ICRA said in the next financial year the industry is likely to report net profit of ₹190 crore backed by passenger traffic recovery by 130% year-on-year.
“In FY2022, the sector is expected to witness improvement in operating income by 73% to ₹14,500 crore and net profit to ₹190 crore supported by recovery in passenger traffic by around 130% y-o-y,” the report said.
The domestic passenger traffic is expected to decline by 61% Y-o-Y and international traffic by 85% Y-o-Y in FY2021, it said.
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