Amazon, Verizon may invest over $4 billion in Vodafone Idea

 

Business Live: Sensex, Nifty start on cautious note amid tepid global cues; Amazon, Verizon may invest over $4 billion in Vodafone Idea

The benchmark stock indices have opened the day on a flat note with rising economic uncertainty as virus cases mount.

The government's hopes of a V-shaped economic recovery could be dashed as the services sector continues to face troubles in August.

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

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4:30 PM

The gap between growth and value stocks  

4:15 PM

Diesel price cut for first time in close to 6 months; petrol unchanged

A pleasant surprise for fuel consumers.

PTI reports: "Diesel price on Thursday was cut for the first time in close to six months after state-owned fuel retailers reduced retail selling rate by 16 paise per litre.

Diesel now costs Rs 73.40 per litre in the national capital, as against Rs 73.56 a litre previously, according to a price notification of state-owned fuel retailers.

Petrol, which witnessed the second rally in rates beginning mid-August, was unchanged at Rs 82.08 a litre.

This is the first reduction in diesel price since mid-March when Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) froze rates for 82 days to adjust a record hike in excise duty on auto fuels against falling benchmark cost.

Diesel rates had gone up by Rs 12.55 a litre between June 7, when oil firms resumed revising prices in line with cost, and July 25. Diesel price has remained unchanged in the country since July 25, except in Delhi where a reduction in VAT lowered the rate by Rs 8.38 per litre.

Petrol price went up by Rs 9.17 per litre between June 7 and June 29 before hitting a pause. The revision cycle again started on August 16 and rates have gone up by Rs 1.51 since then. In all, the petrol price has risen by Rs 10.68 since June 7.

In Mumbai, petrol comes for Rs 88.73 per litre while diesel is priced at Rs 79.94, as against Rs 80.11 previously, according to the price notification.

In Kolkata, petrol is priced at Rs 83.57, while diesel now costs Rs 76.90 a litre, down from Rs 77.06 previously.

In Chennai, petrol comes for Rs 85.04 a litre and diesel for Rs 78.71, as against Rs 78.86 previously.

State-owned fuel retailers revise rates of petrol and diesel daily based on average price of benchmark fuel in the preceding 15 days."

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4:00 PM

Sensex ends 95 points lower; banking stocks drag

Stocks that opened the day flat ended the day marginally low after a day of choppy trading.

PTI reports: "Domestic equity benchmark Sensex ended 95 points lower on Thursday as losses mainly in baking counters offset gains in shares of IT and consumer durables.

Despite opening on a positive note, the BSE Sensex ended 95.09 points or 0.24 per cent lower at 38,990.94; while the NSE Nifty closed 7.55 points or 0.07 per cent down at 11,527.45.

ICICI Bank was the top loser in the Sensex pack, shedding around 2 per cent, followed by Bharti Airtel, Axis Bank, Kotak Bank and PowerGrid.

On the other hand, Titan, Tech Mahindra, Nestle, Maruti, Sun Pharma and Asian Paints were among the gainers.

Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi said, Indian market opened marginally positive owing to mixed global cues as investors in Asian markets react to a slew of economic data releases for China and European markets.

The market, however, turned negative after the latest IHS Markit Services Purchasing Managers’ Index (PMI) contracted for the sixth successive month in August.

The seasonally adjusted India Services Business Activity Index rose sharply from 34.2 in July to 41.8 in August, the highest since March, before the escalation of the pandemic.

The downturn in India’s services sector activity eased in August but remained in the contraction zone as COVID-19 pandemic-induced restrictions continued to adversely impact client demand and business operations.

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

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

Global oil benchmark Brent crude was trading 1.40 per cent lower at USD 43.81 per barrel.

In the forex market, the rupee depreciated 44 paise and closed at 73.47 against the US dollar."

3:30 PM

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Rupee settles 44 paise lower at 73.47 against US dollar

The rupee depreciated 44 paise and closed at 73.47 (provisional) against the US dollar on Thursday tracking muted domestic equities and strengthening American currency.

At the interbank forex market, the rupee opened on a weak note at 73.23, lost further ground during the session and finally settled for the day at 73.47 against the greenback, registering a fall of 44 paise over its last close.

The rupee had closed at 73.03 against the US dollar on Wednesday.

During the session, the domestic unit witnessed an intra-day high of 73.23 and a low of 73.48 against the American currency.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.04% to 92.88.

 

2:30 PM

Isha, Akash Ambani, Byju Raveendran debut on Fortune’s ‘40 Under 40’ influencer list

Billionaire Mukesh Ambani’s twin children Isha and Akash, and edtech startup Byju’s founder Byju Raveendran are among the Indians who have debuted on Fortune’s ‘40 Under 40’ list of influential people around the globe.

Stating that the coronavirus pandemic has fundamentally altered the way people work and socialise, Fortune magazine said executives have moved quickly to support and empower employees while grappling with daunting challenges to the way their businesses operate.

“To reflect this wave of transformation, we decided that we needed to embrace change in this year’s 40 Under 40. We needed to go bigger — and search more widely,” it said.

This year’s list includes 40 influential people under 40 years of age in five categories — finance, technology, healthcare, government and politics, and media and entertainment.

 

2:00 PM

Tencent shares fall over 2% after India bans PUBG game, other mobile apps

Investors expect the Centre's ban on Chinese apps to affect the profits of these companies.

Reuters reports: "Shares of Chinese gaming and social media powerhouse Tencent fell more than 2% on Thursday after India banned 118 mobile apps, including the firm's popular videogame PUBG.

The stock traded 2.2% lower at HK$533 in the afternoon, on track to snap two straight sessions of gain.

The list of 118 mostly Chinese apps also includes those from Baidu and Xiaomi's ShareSave, as India stepped up pressure on Chinese technology firms following a standoff with Beijing at the border."

1:30 PM

China strongly opposes India banning Chinese mobile apps - commerce ministry

China's reaction to the Centre's decision to ban Chinese apps including PUBG.

Reuters reports: "China's commerce ministry said on Thursday it strongly opposed India banning Chinese mobile apps.

Indian actions violate the legal interests of Chinese investors and services providers and China asks India to correct its mistakes, commerce ministry spokesman Gao Feng told a briefing.

India has banned another 118 mostly Chinese mobile apps including Tencent Holdings Ltd's popular videogame PUBG, citing data security concerns."

1:00 PM

Tata Motors reports 13% increase in sales in August

Even as most auto firms report a slide in sales, there are signs of greenshoots in pockets of the industry.

PTI reports: "Tata Motors on Thursday reported a 13.38 per cent increase in total sales at 36,472 units in August.

The company had sold a total of 32,166 units in same period last year, the home-grown auto major said in a statement.

Total domestic sales were up 21.6 per cent to 35,420 units, from 29,140 units in August last year, it added.

Passenger vehicle sales in the domestic market during the last month rose by over two-fold to 18,583 units, as against 7,316 units in the same month last year.

However, the company reported 28 per cent decline in total commercial vehicle sales last month at 17,889 units, as against 24,850 units in the year-ago period."

12:30 PM

Investors go long on Asian currencies, Indian rupee bets at 3-year high

The Indian rupee may benefit as investors go long Asian currencies amid a weakening dollar.

Reuters reports: "Long positions on India's rupee were sharply raised to a three-year high, a Reuters poll found, as the central bank cut back on dollar-buying, while a weaker greenback and encouraging economic recovery signs propped up bullish bets on other Asian currencies.

The fortnightly poll of 13 respondents showed investors held long positions on all nine Asian currencies for the first time since late January, before the COVID-19 pandemic dealt its devastating economic blow. The rupee has appreciated close to 3% over the past two weeks after the central bank cut back on aggressive dollar-buying it has been undertaking in recent months to build reserves and keep the currency in check to help exports and its virus-hit economy.

India's economy shrank 23.9% in the three months to June, much more than forecast, pointing to a longer than previously expected recovery, with analysts calling for further stimulus.

“A sustained rally in the rupee is unlikely,” BofA Global Research said in a note this week, as domestic demand and movement increase and the government pushes local production.

Long bets on the Chinese yuan, South Korea's won , Singapore's dollar and the Malaysian ringgit were all raised to their highest since early 2018. Data showing the Chinese services sector expanded again last month has added to hopes that the world's second-largest economy was rebounding strongly, and returning to pre-COVID-19 levels of growth.

Long bets on the yuan have been hiked in five consecutive polls, and global investment banks now bet the currency's recent rally will be sustained due to persistent dollar softness and continued capital inflows.

The biggest risk to the yuan and the Chinese recovery comes from worsening relations with the United States. Goldman Sachs said this week that despite tensions, the trade deal the two signed in January looks unlikely to break down this year.

Improving risk sentiment across Asia has been supported by the four months of declines in the dollar, and with the new Federal Reserve approach of achieving maximum employment and not worrying too much about its impact on inflation.

This suggests interest rates will likely remain at near-zero for years to come. Meanwhile, investors turned bullish on the Indonesian rupiah for the first time since June, latching on to improving appetite for risk and interest rate differentials, all in spite of worries about the central bank's independence. The rupiah is an interest rate carry trade favourite.

The Asian currency positioning poll is focused on what analysts and fund managers believe are the current market positions in nine Asian emerging market currencies: the Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit and the Thai baht."

12:00 AM

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Unacademy gets $150 million in SoftBank-led round

Education technology firm Unacademy has raised $150 million in a round led by SoftBank Vision Fund 2i, valuing the company at $1.45 billion.

Existing investors General Atlantic, Sequoia Capital, Nexus Venture Partners, Facebook, and Blume Ventures also participated in the round, it added.

All documents related to the investment had been signed and the final closing was expected in the next few weeks, it said.

“We’re delighted to welcome SoftBank as a partner. We started with test preparation and with this partnership, we will launch other [offerings] on our platform,” said Gaurav Munjal, co-founder and CEO, Unacademy.

11:30 AM

The rise of zombie firms  

11:00 AM

India's services activity shrinks for sixth month in Aug, job losses mount

A serious setback to the government's hopes of a V-shaped economic recovery.

Reuters reports: "Activity in India's crippled services industry fell for a sixth straight month in August as coronavirus restrictions continued to hurt business operations and demand, causing the longest streak of job losses on record, an industry survey showed.

Thursday's survey adds to the gloom in the service sector, an engine of economic growth and jobs, suggesting a long and painful road to recovery after the economy shrank nearly a quarter in April-June.

Although the Nikkei/IHS Markit Services Purchasing Managers' Index increased to 41.8 in August from July's 34.2, it remained well below the 50-mark separating growth from contraction.

August was the sixth straight month the index was sub-50, the longest such stretch since a 10-month run to April 2014.

“August highlights another month of challenging operating conditions in the Indian services sector,” Shreeya Patel, an economist at IHS Markit, said in a release. “Sustained periods of closure and ongoing lockdown restrictions in both domestic and foreign markets have weighed heavily on the health of the industry.”

Hoping to avert more serious economic damage, the government has said it planned to reopen underground train networks and allow sports and religious events in a limited manner despite coronavirus cases growing at the fastest rate in the world's second-most populous country.

Amid the raging pandemic, even if restrictions are eased, economic activity is unlikely to quickly return to pre-COVID-19 levels as fear of getting infected will keep millions of people indoors, avoiding shopping malls, cinemas, restaurants and hotels.

A Reuters poll showed the Indian economy is likely to suffer its worst 12-month performance since 1979 for the fiscal year that ends March 2021, contracting 6.0%, pushing millions more into poverty.

Although improved from July, sub-indexes tracking domestic and foreign demand remained firmly in contraction territory, leading firms to reduce their workforce for the sixth straight month, the longest streak on record.

Expectations for future business activity gave little hope for an imminent turnaround as service firms gave a neutral outlook for the next 12 months.

A composite index, which measures both services and factory activity, improved to 46.0 in August from July's 37.2, cushioned by a better manufacturing performance, but remained well below the neutral 50.0 level.

On the price front, both input costs and prices charged rose in August, suggesting Asia's third-largest economy could enter a period of stagflation - a phase with lofty inflation, high unemployment and stagnant demand."

10:40 AM

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Rupee slumps 29 paise to 73.32 against U.S. dollar in early trade

The rupee depreciated 29 paise to 73.32 against the U.S. dollar in opening trade on Thursday tracking muted domestic equities and strengthening American currency.

At the interbank forex market, the rupee opened on a weak note at 73.23, then fell further to 73.32, registering a fall of 29 paise over its last close.

The rupee depreciated 16 paise to close at 73.03 against the U.S. dollar on Wednesday.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.07% to 92.91.

Forex traders said strong dollar and muted domestic equities weighed on investor sentiment. However, sustained foreign fund inflows supported the rupee and restricted the decline.

 

10:20 AM

Amazon, Verizon may invest over $4 billion in Vodafone Idea

Looks like things may begin to heat up again in the country's telecom sector.

Reuters reports: "U.S. wireless carrier Verizon Communications Inc and Amazon.com Inc may invest more than $4 billion for a stake in India's Vodafone Idea Ltd , the Mint newspaper reported on Thursday, sending shares in the struggling Indian telecom firm up 10%.

Vodafone Idea's stake-sale talks had been paused pending the outcome of a court hearing in India, which created uncertainty and could have threatened Vodafone Idea's survival, Mint reported, citing two unnamed people aware of the negotiations.

But Amazon and Verizon are set to resume discussions following a Supreme Court ruling on Tuesday which gave mobile carriers 10 years to settle government dues.

Vodafone Idea did not immediately respond to Reuters request for comment. Amazon and Verizon did not return emails seeking comment outside regular U.S. business hours.

Heavily indebted Vodafone Idea - a joint venture between Britain's Vodafone Group Plc and India's Idea Cellular - had previously said its ability to continue as a going concern rested on a positive outcome of the hearing.

It has paid the Indian government 78.5 billion rupees ($1.1 billion) in telecoms dues, according to regulatory filings, but still owes roughly 500 billion rupees ($6.8 billion) more.

Shares in Vodafone Idea, which ended 13% lower after Tuesday's court ruling, were up 8% at 10.70 rupees on the NSE index by 0405 GMT."

10:00 AM

Sensex, Nifty start on cautious note amid tepid global cues

A slow start to the day for stocks.

PTI reports: "Domestic equity benchmarks Sensex and Nifty turned cautious in early trade on Thursday amid lack of directional cues from global markets.

After opening 150.33 points higher, the BSE Sensex pared most gains to trade 12.69 points or 0.03 per cent higher at 39,098.72; while the NSE Nifty was up 13.80 points or 0.12 per cent at 11,548.80.

M&M was the top gainer in the Sensex pack, rising around 2 per cent, followed by Maruti, TCS, L&T, Titan, Bajaj Auto and Sun Pharma.

On the other hand, Bajaj Finance, ICICI Bank, IndusInd Bank and PowerGrid were among the laggards.

In the previous session, Sensex settled 185.23 points or 0.48 per cent higher at 39,086.03, while Nifty climbed 64.75 points or 0.56 per cent to close at 11,535.

Exchange data showed that foreign institutional investors bought equities worth Rs 990.57 crore on a net basis on Wednesday.

According to traders, domestic equities turned choppy amid lack of directional cues from global markets.

Concerns of India-China border tensions too weighed on investor sentiment, they said.

Bourses in Shanghai and Hong Kong were in the red in mid-day deals, while Tokyo and Seoul was trading with gains.

Stock exchanges on Wall Street ended significantly higher in overnight session.

Global oil benchmark Brent crude was trading 0.09 per cent higher at USD 44.47 per barrel."

 

9:30 AM

FM to meet heads of banks, NBFCs

Finance Minister Nirmala Sitharaman will hold a review meeting with heads of banks and NBFCs on Thursday for the smooth and speedy implementation of the one-time debt recast for resolution of COVID-19-related stress in bank loans.

The Reserve Bank of India (RBI) last month permitted a one-time restructuring of both corporate and retail loans without getting classified as a non-performing asset (NPA).

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