The benchmark stock indices have opened the day on a positive note on the back of favorable global cues.
Yet another big-ticket FDI investment may be on its way into India as Walmart looks to pick a stake in a Tata Group business.
Join us as we follow the top business news through the day.
Economic risks of a second coronavirus wave
Sensex, Nifty end marginally lower after choppy trade
The stock indices failed to hold on to their morning gains as choppy trading ensued.
PTI reports: “Equity benchmarks Sensex and Nifty ended marginally lower on Tuesday amid lack of directional cues from domestic as well as global markets.
After rising over 254 points in early trade, the 30-share BSE Sensex was caught in volatility and ended 8.41 points or 0.02 per cent lower at 37,973.22.
Similarly, the NSE Nifty slipped 5.15 points or 0.05 per cent to 11,222.40.
ONGC was the top loser in the Sensex pack, shedding around 3 per cent, followed by IndusInd Bank, PowerGrid, Axis Bank, HCL Tech, NTPC and ITC.
On the other hand, UltraTech Cement, TCS, Tata Steel, Titan and HDFC were among the gainers.
According to traders, domestic equities traded on a choppy note amid lack of directional cues from the domestic as well as global markets.
Domestic investors turned cautious after the Reserve Bank postponed its bi-monthly policy review meeting, they said.
Further, market participants across the globe are looking for cues from the first presidential debate between US President Donald Trump and Democratic candidate Joe Biden, set for later in the day.
Bourses in Shanghai, Tokyo and Seoul ended with gains, while Hong Kong was in the red.
Stock exchanges in Europe were trading on a negative note in early deals.
Meanwhile, international oil benchmark Brent crude was trading 0.44 per cent lower at USD 42.68 per barrel.
In the forex market, the rupee depreciated 7 paise to settle at 73.86 against the US dollar.”
Weibo owner Sina Corp to go private in $2.6 billion deal with CEO-led firm
Sina Corp, owner of social media platform Weibo, will be taken private in a $2.6 billion deal with Chief Executive Officer Charles Chao, the Chinese internet company said on Monday.
The offer price of $43.3 per share is at an 18% premium to the stock’s closing price on July 2, the last trading day before Sina received the preliminary offer of $41 per share.
U.S.-listed shares of Sina rose more than 6% in premarket trading.
Chao’s holding company, New Wave, is the largest shareholder of Sina, with a 12.15% stake as of July 10, according to Refinitiv-Eikon data.
Many Chinese companies are opting out of U.S. stock exchanges, following rising tensions between the world’s two largest economies, by considering go-private deals or returning to equity markets closer to home.
Rupee settles 7 paise lower at 73.86 against US dollar
Choppy trading in stocks didn’t help the rupee today.
PTI reports: “The rupee depreciated 7 paise to settle at 73.86 (provisional) the US dollar on Tuesday, as investors await fresh cues from the US Presidential debate and economic calendar this week.
At the interbank forex market, the domestic unit opened at 73.78 against the US dollar, and finally closed at 73.86 against the greenback, registering a fall of 7 paise over its previous close.
On Monday, the rupee settled at 73.79 against the US dollar.
During the session, the local unit witnessed an intra-day high of 73.75 and a low of 73.91 against the American currency.
Forex traders said investors are looking for cues from the first presidential debate between US President Donald Trump and Democratic candidate Joe Biden, set for later in the day.
Moreover, investors are cautious ahead of the RBI policy statement that was supposed to be released this week. But the meeting is now postponed and dates of the same will be announced shortly.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.09 per cent to 94.19.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 116.97 points higher at 38,098.60, and the broader NSE Nifty advanced 34.75 points to 11,262.30.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 26.98 crore on a net basis on Monday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 0.75 per cent to USD 42.11 per barrel.”
Amazon India launches specialised Fulfilment Centre in Ponneri
Amazon India has opened a specialised Fulfilment Centre (FC) in Ponneri Taluk, Kancheepuram, along with the expansion of an existing FC at Tiruvallur district.
The new FC will offer close to 7 lakh cubic feet of storage space, housing several lakh of products in the large appliance and furniture category. With this infrastructure expansion, Amazon.in will now offer storage capacity of close to 3 million cubic feet across five fulfilment centres to its more than 43,000 sellers in Tamil Nadu. The company said that this expansion will contribute to the economic growth in the state while creating thousands of work opportunities for locals.
“Tamil Nadu is an important market for us and we are delighted to further invest and expand our infrastructure in the State. This expansion will work as an enabler for SMBs in Tamil Nadu helping them with faster delivery of their products to a wider customer base,” said Abhinav Singh, director – Amazon Transportation Services, Amazon India. He added, “This festive season, health and safety of our associates and customers is of utmost priority.”
’Hiring rate, female workforce participation increase in India’
Some greenshoots in the labor market as well.
PTI reports: “Hiring rate and female workforce participation have increased in India, according to a ‘Labour Market Update’ put out by online professional network LinkedIn.
Hiring picked up by 25 percentage points by end of July as compared to June, it said.
Female workforce participation increased from 30 per cent in April to reach 37 per cent at the end of July.
‘Labour Market Update’ is a monthly update on hiring trends and insights based on LinkedIn’s ‘Economic Graph’, a digital representation of the Indian economy built by conducting a close analysis of actions of more than 69 million members in India, it said in a statement.
Insights from its second edition show that hiring continues to recover, gender parity has improved, and disruptive digital skills can help to increase the resilience of professionals to challenges in the current job market, it said.
One possible reason for increase in female workforce participation could be the strong support from live-in help and grandparents, as well as more flexible working hours with remote working schemes, which has allowed more women to enter the workforce despite schools and childcare facilities being closed during the lock-down, it said.
“The lockdown, which promoted acceptance of the work from home concept supported by flexible work hours, has emerged as an opportunity for women to rebuild their careers and start afresh,” saidPei Ying Chua, APAC Lead Economist, Economic Graph teamat LinkedIn.
With the exception of the manufacturing sector, female representation across most industries increased during the lockdown period and continued to rise in subsequent months.
The increase in female representation was also more pronounced in industries which already had higher gender parity to begin with (such as Corporate Services, Education, Health Care and Media & Communications).
The data also showed that talent with more advanced digital skills have weathered the COVID-19 storm better than those with basic digital skills, it was stated.”
Phone giant NTT plans to take over, delist Docomo
Shares in Japanese telecoms giant Nippon Telegraph & Telephone, or NTT, fell Tuesday on news it is preparing for a takeover of its mobile phone carrier NTT DoCoMo.
The Nihon Keizai Shimbun and other media reported that DoCoMo’s board would meet later in the day to vote on the plan.
The reports said NTT plans to delist NTT DoCoMo, taking it private to enable the mobile carrier to offer cheaper rates in competition with rivals such as SoftBank and KDDI.
The company’s shares fell 3.1%. DoCoMo’s shares were suspended from trading.
NTT’s reported plan dovetails with newly installed Prime Minister Yoshihide Suga’s push for lower telecoms rates.
Indian house prices to fall 6% this year, risk to downside
Will the coronavirus pandemic bust the Indian real estate bubble?
Reuters reports: “Indian house prices will fall more sharply this year than expected just three months ago amid surging coronavirus cases which are hurting demand in an economy fighting its deepest recession on record, a Reuters poll showed.
Even before the pandemic struck, house prices had declined nearly 1% during the January-March period from the previous quarter, according to Reserve Bank of India data. That is with consumer inflation averaging 6.67% during that same period.
Most new housing projects are either unsold or delayed due to the coronavirus spreading in the country at the fastest rate in the world – causing massive job losses, pay cuts in almost every sector and migration of labour out of top-tier cities.
That gloomy job market was likely to hurt demand and already-slowing housing market activity, suggesting a recovery would not come any time soon, according to the Sept. 16-28 Reuters poll of 15 analysts.
The poll predicted average house prices to shrink 6.0% this year and 3.0% next year, which would be the first annual fall since records began over a decade ago. That compares to a fall of 5.0% and 3.0% expected in a poll taken three months ago.
“The COVID-19 impact has hit the residential sector hard and while green shoots are emerging in terms of sales activity, it is largely focused on completed and ready to move inventory,” said Rohan Sharma, head of research at Cushman Wakefield.
“Under-construction and unsold inventory remain under a slight stress.”
In a worst-case scenario, prices nationally were expected to decline 10.0% and 7.0%, this year and next, respectively.
While house prices were expected to decline, retail inflation held above the central bank’s medium-term target range of 2-6% for the fifth consecutive month in August, giving little room for the RBI to support the economy.
Nine of 12 respondents who answered an additional question said the risk to their housing market outlook was skewed more to the downside. Nine of 13 analysts predicted the recovery from the recent slowdown to take at least a year.
“There is still a fair bit of uncertainty on the extent and duration of the disruption caused by COVID-19,” said Aashish Agarwal, head of India real estate at SayeNvest.
“Given the rising number of cases, any re-imposition of restrictions could delay the prospects of recovery and increase pressure to liquidate inventory, even below fair prices.”
A regional breakdown in the poll showed house prices this year would fall 7.5%, 7.0%, 5.0% and 3.5% in Mumbai, Delhi, Chennai and Bengaluru, respectively, compared to 7.3%, 7.0%, 3.0% and 3.0% contractions predicted in the June survey.
“The residential segment has taken a hit due to demand flattening out in most cities,” said Ajay Sharma, managing director at Colliers International.
“If the festive season recovery does not happen, then the pricing of 2020 will continue well into 2021,” he added.”
Maruti Suzuki shortlists 5 new startups under its MAIL programme
The country’s largest carmaker Maruti Suzuki India Ltd (MSIL) on Tuesday said it has shortlisted five new startups as part of its third cohort of MAIL (Mobility & Automobile Innovation Lab) programme.
The five new startups chosen in Cohort 3 are Clean Slate, Peer Robotics, Vicara, Hyper Reality, and URJA. With the addition of these five startups, Maruti Suzuki is now engaged with 14 startups under the MAIL programme in the last 18 months, the company said in a statement.
Maruti Suzuki India’s MAIL initiative supports startups by co-creating innovative business solutions. It was launched with an aim to nurture innovation in the automobile and mobility sector in partnership with GHV Accelerator in January 2019.
Oil slips as demand worries offset hopes for stimulus
Demand continues to be a matter of concern in the oil market.
Reuters reports: “Oil prices fell on Tuesday as demand concerns driven by COVID-19 outweighed hopes that U.S. lawmakers and the White House were nearing an agreement on a new stimulus package to revive the world’s biggest economy.
U.S. West Texas Intermediate (WTI) crude futures slipped 17 cents, or 0.4%, to $40.43 at 0120 GMT, while Brent crude futures also fell 17 cents, or 0.4%, to $42.26 a barrel. Both benchmarks rose about 1% on Monday.
Commodities markets had crept up in earlier trade as Democratic lawmakers unveiled a new $2.2 trillion coronavirus relief bill, which U.S. House of Representatives Speaker Nancy Pelosi said was a compromise measure.
“If it happens, the U.S. stimulus checks will go a long way to shoring up U.S. oil demand at a most critical juncture and could move oil prices back into a pre-September frame of mind,” AxiCorp market strategist Stephen Innes said in a note.
Brent and WTI in August hit their highest levels since early March on optimism over rising fuel demand and major oil producers’ strong compliance with promised supply cuts, but have since dropped by about $3 on demand worries.
In the latest hit from a second wave of COVID-19, in Canada the province of Quebec clamped down on bars and restaurants and social gatherings in homes, while the most populous province, Ontario, reported a new daily high of 700 cases.
In another negative demand sign, crude imports in August to Japan, the world’s fourth biggest consumer, slumped nearly 26%, government data showed on Tuesday.
The market will be looking for signs of U.S. demand growth in data due on Tuesday from the American Petroleum Institute and the Energy Information Administration on Wednesday.
Five analysts polled by Reuters on average estimate U.S. crude oil inventories rose by 1.4 million barrels in the week to Sept. 25. They expect gasoline stockpiles fell by 1.6 million barrels and distillate inventories, which include diesel and jet fuel, fell by 800,000 barrels.
On the supply side traders were keeping an eye on clashes between Armenia and Azerbaijan over the Nagorno-Karabakh region. If the conflict escalates it could affect oil and gas exports from Azerbaijan, analysts said.
Azerbaijan’s main oil pipeline runs through Georgia to the Turkish Mediterranean coast.”
Vedanta gets in-principle nod for delisting from BSE, NSE
Billionaire Anil Agarwal-controlled Vedanta on Tuesday said it has received in-principle approval from stock exchanges — BSE and National Stock Exchange of India — for its delisting from the bourses.
Post approval, the company’s parent Vedanta Resources (VRL) and its subsidiaries issued a public announcement with regard to the delisting offer.
”…BSE and National Stock Exchange of India have issued their in-principle approval for the delisting offer pursuant to their letters each dated September 28, 2020, Vedanta said in a regulatory filing.
Vedanta Resources and its wholly-owned indirect subsidiaries – Vedanta Holdings Mauritius and Vedanta Holdings Mauritius II – have also issued a public announcement with regard to the delisting offer on Tuesday.
Stock rally bypasses lower-income families
Musk plans IPO for SpaceX’s Starlink business
Tesla Inc Chief Executive Officer Elon Musk plans to list SpaceX’s space internet venture, Starlink, several years in the future when revenue growth is smooth and predictable.
“Public market does *not* like erratic cash flow haha,” the billionaire entrepreneur tweeted on Monday.
Musk said last year that Starlink was an important new revenue stream for his California-based Space Exploration Technologies, or SpaceX.
SpaceX President Gwynne Shotwell in February floated the idea of spinning Starlink off for an IPO in the coming years.
Walmart looking at up to $25 billion investment in Tata Group’s ‘super app’
Yet another big-ticket FDI may be on its way into the country.
Reuters reports: “Walmart Inc is in talks with Tata Group for a potential investment of up to $25 billion in the Indian salt-to-software conglomerate’s new “super app”, the Mint newspaper reported on Tuesday, citing people familiar with the matter.
According to ongoing discussions between the two companies, the super app could be launched as a joint venture between Tata and Walmart, leveraging on the synergies between Tata’s e-commerce business and Flipkart, Walmart’s e-commerce unit, according to the report. (https://bit.ly/2EKxZuQ)
The news comes as Reliance Industries Ltd, controlled by Asia’s richest man Mukesh Ambani, raised over $20 billion from investors including Facebook, Alphabet’s Google, KKR & Co and Silver Lake Partners by selling stakes in its digital business Jio Platforms.
Separately, Bloomberg News reported Tata Group is in discussions with potential investors about stakes in its new digital platform. (https://bloom.bg/36c04qd)
The Walmart investment could touch $20 billion to $25 billion eventually for a large stake in the proposed super app that will be hosted under a Tata Sons unit, according to the Mint report.
The super app, which is scheduled to be launched in India in December or January, will bring together Tata’s consumer business under one channel offering a wide range of products in the retail space, Mint said.
Tata’s consumer businesses include watch and jewellery brand Titan and fashion retail chain Trent.
Shares of Tata Consultancy Services, Tata Motors and Tata Steel gained more than 1% each, with TCS the top boost to the Nifty 50 index.
If the Walmart deal goes through, it will top its investment in Flipkart, for which the U.S.-based company paid $16 billion for a 66% stake.
Mint said Walmart had hired Goldman Sachs as the banker for the proposed deal. Tata Group, Walmart and Goldman Sachs did not immediately respond to Reuters requests for comment.”
Sensex jumps over 200 points in opening trade; Nifty tests 11,300
A good start to the day for stocks after yesterday’s strong gains.
PTI reports: “Equity benchmark Sensex jumped over 200 points in early trade on Tuesday led by gains in index-heavyweights TCS, Infosys and HDFC twins amid positive cues from global markets.
The 30-share index was trading 211.15 points or 0.56 per cent higher at 38,192.78, and the NSE Nifty jumped 62.90 points or 0.56 per cent to 11,290.45.
TCS was the top gainer in the Sensex pack, rising around 3 per cent, followed by Asian Paints, Titan, UltraTech Cement, the HDFC duo, Tata Steel and Infosys.
On the other hand, IndusInd Bank, ONGC, ICICI Bank and Axis Bank were among the laggards.
In the previous session, Sensex settled 592.97 points or 1.59 per cent higher at 37,981.63, while the NSE Nifty surged 177.30 points or 1.60 per cent to 11,227.55.
Exchange data showed that foreign institutional investors sold equities worth Rs 26.98 crore on a net basis on Monday.
According to traders, domestic equities opened on a positive note following largely positive cues in global markets.
Bourses in Shanghai and Seoul were trading with gains in mid-day deals, while Shanghai and Tokyo were in the red.
Stock exchanges on Wall Street ended with significant gains in overnight session.
Meanwhile, international oil benchmark Brent crude was trading 0.44 per cent lower at USD 42.68 per barrel.”
U.S. charges former Amazon manager and family members with insider trading
The Securities and Exchange Commission on Monday charged a former finance manager at Amazon.com, Inc. and two of her family members with insider trading in advance of the company’s earnings announcements between January 2016 and July 2018.
The SEC alleged that Laksha Bohra, who worked as a senior manager in Amazon’s tax department, acquired and tipped her husband Viky Bohra with highly confidential information about Amazon’s financial performance.
The complaint alleges that Viky Bohra and his father, Gotham Bohra, then traded on this confidential information, reaping illicit profits of approximately $1.4 million.
The SEC’s complaint, filed in federal court in Seattle, charges all three Bohras with violating anti-fraud provisions of the federal securities laws. They have agreed to pay total disgorgement of $1,428,094, total prejudgment interest of $118,406, and total penalties of $1,106,399.