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At the moment’s high business information: Shares pare features, PM launches ‘faceless’ tax system, BoJ pays banks to spice up pandemic reduction, and extra

After ending a 6-day winning streak yesterday, stocks have opened the day with gains once again today.

Join us as we follow the top business news through the day.

4:30 PM

Retail trading goes global

4:00 PM

Sensex, Nifty end marginally lower; L&T rallies over 4%

The benchmark stock indices started the day on a positive note only to lose all gains.

PTI reports: “Domestic equity benchmarks Sensex and Nifty ended with marginal losses on Thursday as uncertainty surrounding the COVID-19 pandemic kept investors cautious amid lack of directional cues.

After opening on a positive note, the BSE Sensex pared all gains to end 59.14 points or 0.15 per cent lower at 38,310.49.

The NSE Nifty slipped 7.95 points or 0.07 per cent to finish at 11,300.45.

Bharti Airtel was the top laggard in the Sensex pack, shedding over 2 per cent, followed by Sun Pharma, ITC, SBI, Axis Bank, HDFC twins and Nestle India.

On the other hand, L&T rallied over 4 per cent. Titan, HCL Tech, NTPC and UltraTech Cement were also among the gainers.

Indian markets opened on a positive note amid a mixed trend in Asian peers, but profit-booking emerged in the afternoon session, said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi.

According to traders, lack of directional cues from global markets amid spiking COVID-19 cases kept investors on edge.

Bourses in Shanghai, Tokyo and Seoul ended with gains, while Hong Kong closed in the red.

Stock exchanges in Europe were also trading on a negative note in early deals.

Global oil benchmark Brent crude was trading 0.20 per cent lower at USD 45.34 per barrel.

On the currency front, the rupee settled on a flat note, edging just 1 paisa lower to 74.84 against the US dollar.”

3:40 PM

Shell eyes stake in Nayara’s $9 billion Gujarat petrochemical project: Reuters

Oil major Royal Dutch Shell has planned to buy a 50% stake in Indian-based Nayara Energy’s $9 billion planned petrochemical project, a source familiar with the matter said.

The source added that Shell and Nayara, which is part-owned by Russian oil major Rosneft, signed a memorandum of understanding in early June, creating an equal joint venture for building the project. “The petrochemical joint venture between Nayara and Shell was discussed at board of directors meetings of Nayara in November and December last year,” another source said.

The 1.8 million tonnes a year full steam ethylene cracker and linked downstream units to be build at Vadinar in Gujarat would cost $8 billion-$9 billion and would be completed in five years, the first source said. The project will also have an aromatic complex and capacity to produce 10.75 million tonnes of a variety of petrochemicals, according to Nayara’s proposal to the environment ministry.


3:10 PM

Investment by PE/VCs halves to USD 4.1 billion in July: Report

Sagging business confidence is having an impact on investments.

PTI reports: “Investments by private equity and venture capital firms in Indian companies halved to USD 4.1 billion in July as compared to the same month a year ago, a report said on Thursday.

In June, the investments stood at USD 6.8 billion, consultancy firm EY said in the report.

However, if one were to exclude the investments into Jio Platforms, July has been the best month of 2020 with private equity(PE) and venture capital(VC) funds pouring in USD 3.7 billion, it said. The deal activity was low this year even before the novel coronavirus struck, as the economy experienced a slowdown. Stake sales by Mukesh Ambani in telecom and technology venture Jio helped the overall numbers during the peak of COVID-19 pandemic, it noted.

The consultancy firm’s partner Vivek Soni said there has been a rebound in PE/VC investment activity and fund raising by dedicated funds in July at USD 2.2 billion is 38 per cent higher than the first six months of 2020.

Soni said there continues to be a considerable overhang over the economic activity but given the past experience of investments done immediately post a crisis being the most rewarding, he is cautiously optimistic about an uptick in investments in the next two to three months.

July 2020 recorded 77 deals involving Indian companies which saw investments of USD 4.1 billion as compared to USD 8.4 billion in the year-ago same month, and were majorly led by USD 1.7 billion of buyouts in six transactions, which touched an 11-month high by value.

There were 10 large deals of over USD 100 million each last month, which saw inflows of USD 3.1 billion as against USD 7.1 billion in 13 large deals in July 2019, it said.

Technology was the top sector in July with USD 963 million invested across 10 deals followed by financial services (USD 882 million;15 deals) and pharmaceuticals (USD 699 million; 3 deals), it said.

Exit activity continued to remain subdued at USD 134 million, primarily comprising open market exits, it said, adding there were no PE-backed IPOs and secondary exits in July 2020.

The largest fundraise in July 2020 saw Sequoia Capital garner USD 1.4 billion for venture and growth capital investments in India and the region, it said.”

2:40 PM

Rupee settles on flat note, down 1 paisa at 74.84 against US dollar

The correction in stocks during the day increased pressure on the rupee.

PTI reports: “The rupee settled on a flat note, edging just 1 paisa lower to 74.84 (provisional) against the US dollar on Thursday, tracking muted domestic equities.

During the session, the domestic unit witnessed an intra-day high of 74.78 and a low of 74.92 against the greenback.

It had ended at 74.83 against the US dollar in the previous session.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.32 per cent to 93.14.

Investors are awaiting Consumer Price Index (CPI) data scheduled to be released later in the day for further cues, forex traders said.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 27.93 points lower at 38,341.70 and the broader NSE Nifty was trading 1 point up at 11,309.40.

Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 351.15 crore on Wednesday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, rose 0.29 per cent to USD 45.56 per barrel.”

2:00 PM

Faceless scrutiny, appeals to ease taxpayers’ compliance burden, increase fairness in tax system: FM

Some highlights of the government’s latest slew of tax reforms.

PTI reports: “Finance Minister Nirmala Sitharaman on Thursday said the faceless tax scrutiny assessment and appeal would help ease compliance burden of taxpayers and increase fairness and objectivity in the tax system.

Prime Minister Narendra Modi launched the platform ‘Transparent Taxation — Honoring the Honest’ which provides for launch of faceless assessment and adoption of a taxpayer charter.

Also the Central Board of Direct Taxes (CBDT), which administers personal income tax and corporate tax, will launch faceless appeals beginning September 25, as part of the process to reduce physical interface between tax officers and taxpayers.

“Today is a landmark day in the history of tax administration,” Sitharaman said, adding that the vision of the Prime Minister is to empower the taxpayers, to provide a transparent system and to honour the honest taxpayers.

“To realise this vision, the CBDT has given a framework and put in place a system in the form of this platform, a transparent efficient and accountable tax administration is what this platform brings in. It uses technology, data analytics, and also uses artificial intelligence.

“What does this mean to the taxpayer in the country. It eases compliance burden, it brings in fair objective and a just system, there shall not be any physical interface between the department and the tax payer and to an extent it shall bring in certainity of Information,” she added.

She said the Income Tax department has undertaken several reforms, including lowering corporate tax rate from 30 per cent to 22 per cent for existing manufacturing units.

In a series of tweets, the Finance Ministry said the I-T department has taken up several reforms to make tax compliance easier for taxpayers.”

Ensuring that the Department’s efforts result in the empowerment of our taxpayers! IT Department has taken up several reforms to make tax compliance easier for our taxpayers. Our way to reward your honesty! (1/7)#HonoringTheHonest

— Ministry of Finance (@FinMinIndia) August 13, 2020


1:30 PM

Deutsche Bank infuses ₹2,700 crore fresh funds into Indian unit

Deutsche Bank on Wednesday announced a capital infusion of ₹2,700 crore into its India branch operations to fund its growth plans in the country.

With this, the total capital deployed in India branches has now increased to ₹18,200 crore.

Subsequently, the capital adequacy ratio of the Indian branches, which stood at 14.93% as on March 31, 2020, has strengthened to well above the minimum required, the bank said.

These funds will be used to support the further expansion of Deutsche Bank India across all of its businesses – Corporate Banking, Investment Banking, and International Private Banking – which have been consistently growing over the years. In early 2019, the bank had infused ₹3,800 crore in the India branch operations.


1:00 PM

BOJ paying banks to boost pandemic relief, compensates for negative interest rates

Interesting step taken by the Bank of Japan to counter the effects of negative interest rates.

Reuters reports: “As the Bank of Japan tries to pump more funds to companies hit by the coronavirus pandemic, it is offering banks hundreds of millions of dollars in bonuses, a move analysts say is aimed at easing the side-effects of its negative interest rate policy.

Record bank lending in recent months suggests the BOJ’s plan is working — a rare success of late in its battle to revive the economy — but it is also a sign that policymakers’ focus is now more on supporting banks, rather than keeping rates low.

So far, a wall of money printed by the BOJ in recent years has kept a lid on bankruptcies and job losses as the economy tips into a deep recession. But the prolonged battle with COVID-19 is adding to strains on regional banks.

“This is one of the most effective policy moves the BOJ has made in recent years,” said Takehiro Noguchi, senior economist at Mizuho Research.

“The BOJ will likely continue to take steps to alleviate the side-effect of its monetary easing… The BOJ thinks negative interest rates is something it should not have done.”

In March, as COVID-19 clobbered the global economy, the BOJ cobbled together special “coronavirus relief” operations to help keep cash-strapped companies afloat. Under the scheme, the BOJ lends cash to banks against their lending to the private sector, such as loans and bonds, as collateral.

The operation started off quietly but got a major boost after the BOJ decided in April to add a sweetener by giving banks a bonus of 10 basis points (bps) or 0.1% per year, for using the scheme, a bonanza when 10-year government bonds yield 0.04%.

Banks rushed to the plan, gobbling up 27 trillion yen ($250 billion) through the channel by July. That is roughly as much as the amount of banks’ deposits on which the BOJ imposes negative interest rates.

The BOJ went negative in 2016 in an attempt to weaken the yen and lower corporate borrowing costs. But it has imposed a minus 0.1% rate on only a small portion of banks’ deposits, amid concerns the policy could squeeze lenders’ margins and possibly reduce the flow of credit to the economy.

The BOJ has paid 0.1% interest to banks on a total of about 208 trillion yen deposits, while the remainder carries zero interest.”

12:30 PM

Tata Power shares rally 7% after June quarter results

A surprise rally in Tata Power stock.

PTI reports: “Shares of Tata Power on Thursday jumped nearly 7 per cent after the company said its consolidated net profit rose by 10 per cent for quarter ended June.

The stock gained 6.89 per cent to Rs 56.60 on the BSE.

On the NSE, it jumped 5.57 per cent to Rs 55.90.

Tata Power on Wednesday said its consolidated net profit rose by 10 per cent to Rs 268 crore for the quarter ended June on the back of reduced expenses.

The company had posted a net profit of Rs 243 crore during the same period a year ago, it said in a BSE filing.

During April-June, the company reported a total income of Rs 6,540 crore as compared to Rs 7,874 crore in the year-ago quarter.

Total expenses during the quarter under review stood at Rs 6,555 crore as against Rs 7,228 crore in the year-ago period.”

12:00 PM

Sundram Fasteners slips into the red

Sundram Fasteners Ltd., a part of the TVS Group, has reported a standalone net loss of ₹23.48 crore for the first quarter ended June against a net profit of ₹93 crore in the year-earlier period.

Revenue from operations plunged to ₹277 crore from ₹945 crore. Export sales dropped to ₹135 crore from ₹348 crore.

The company recorded positive earnings before depreciation and taxes (EBDT) despite challenging market conditions due to stringent cost control measures. EBDT stood at ₹5 crore (₹167 crore).


11:30 AM

Junk bond issuance hits a high


11:00 AM

China extends anti-dumping tariff on Indian fibre optic product

More economic protectionism on show between India and China.

Reuters reports: “China is extending an anti-dumping tariff on a fibre optic product made in India, the Ministry of Commerce said on Thursday.

The punitive tariff on single-mode optical fibre takes effect from Aug. 14 and lasts for five years, with tariffs ranging between 7.4% and 30.6% depending on the specific Indian manufacturers, the ministry said.

China previously slapped an anti-dumping tariff on the same Indian product for five years until mid-August of 2019 and then had a review of the case.”

10:40 AM

Rupee opens flat at 74.83 against U.S. Dollar

The Rupee opened on a flat note at 74.83 against the U.S. Dollar on Thursday, unchanged from its previous close even as the domestic equity market was trading in the positive territory.

After opening flat, the local unit was later trading at 74.85, down 2 paise over its previous close of 74.83 against U.S. Dollar. The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.17% to 93.28.

Investors are awaiting CPI data scheduled to be released later in the day for further cues, forex traders said.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 86.06 points higher at 38,455.69 and the broader NSE Nifty rose 39.50 points to 11,347.90.


10:20 AM

From carats to peanuts: how a pandemic upended the global diamond industry

As the coronavirus pandemic upended the global diamond industry, shuttering mines from Lesotho to Canada and disrupting supply chains, Rajen Patel swapped diamond polishing for peanut farming.

Mr. Patel, who worked for a decade in Surat where about 80% of the world’s diamonds are polished, joined the exodus of gem workers leaving the city as cases of the virus shot up. After taking up farming in his home village, he has no plans to return in the coming months. “I won’t earn as much I was earning in Surat, but I won’t starve and there is no fear of getting infected with coronavirus,” he said.

Demand for diamonds has plummeted during the pandemic, freezing sales and squeezing prices. With temporary mine closures at risk of becoming permanent, diamond miners are seeking ways to extract more value from their stones.


10:00 AM

Indian shares rise as PSU banks, metals rally

The benchmark stock indices are up this morning on positive global cues.

Reuters reports: “Indian shares inched higher on Thursday, helped by state-run banks and metals stocks, although gains were checked by worries over rising coronavirus cases.

The NSE Nifty 50 index rose 0.3% to 11,343.20 by 0346 GMT, while the S&P BSE Sensex was 0.21% higher at 38,448.56.

The Nifty PSU Bank Index, which tracks state-owned lenders, advanced more than 1%, led by a 1.6% jump in State Bank of India.

The Nifty Metal index, which scaled a more than five-month peak earlier this week, rose nearly 2%.

Shares of Tata Power Company Ltd jumped nearly 4% after the company posted higher quarterly profit on Wednesday.

India’s small-cap and mid-cap shares rose 0.4% and 0.57%, respectively.

Meanwhile, India’s tally of coronavirus cases reached 2.33 million on Wednesday, with the death toll at 46,091. The country has the world’s third highest caseload after the United States and Brazil.”


9:30 AM

Economic disruption to rural economy less severe, says Birla

The economic impact of the lockdown to combat the pandemic has been severe in urban India, while the rural economy appears less badly hit, Aditya Birla Group chairman Kumar Mangalam Birla said on Wednesday.

Observing that the gradual unlocking of the economy was reflecting in improvement in some economic indicators like GST collections and electricity consumption, Mr. Birla told shareholders of the group’s UltraTech Cement Ltd. that these markers were, however, not yet back to pre-COVID-19 levels. “While FY21 will be a challenging year, I remain confident that the economy will revert to the 6-8% growth trajectory in the next fiscal.”

Mr. Birla said the cement maker had used the lockdown period to strengthen its position.


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