The benchmark stock indices have opened the week on a positive note as the US elections worked out in favor of Democratic candidate Joe Biden.
Join us as we follow the top business news through the day.
OPEC forecasts drop in global oil demand
15th Finance Commission submits its report to President
The 15th Finance Commission said it has taken the unique requirements of each of India’s 28 States on board and come up with State-specific considerations in its report submitted to President Ram Nath Kovind on Monday.
Apart from its main recommendations for the devolution of funds between the Centre and the States for the period 2021-22 to 2025-26, the Commission has addressed all its unique terms of reference such as considering a new non-lapsable fund for financing national security and defence spending, and offering performance incentives for States that deliver on reforms.
Apart from the main report uniquely titled “Finance Commission in Covid Times” which depicts a set of scales on its cover to denote balance between the Union and the States, the Commission has presented two more volumes as part of its submissions.
Rupee rises 4 paise against US dollar in late afternoon deals
The rupee shed some its gains through the day.
PTI reports: “The rupee surrendered most of its early gains to trade just 4 paise higher at 74.04 against the US dollar in late afternoon trade on Monday.
At the interbank foreign exchange (forex), the domestic currency opened sharply higher at 73.95 a dollar and gained further strength to touch a high of 73.83.
It, however, could not hold on to the gains and fell to 74.04 against the greenback in late afternoon deals.
In the previous session, the rupee had gained 28 paise to end at 74.08 against the US dollar.”
Indian demand for COVID-19 drug remdesivir rising sharply – Cipla
Questions over efficacy are not deterring demand for remdesivir.
Reuters reports: “Demand for COVID-19 antiviral drug remdesivir is rising sharply in India, a top executive at drugmaker Cipla Ltd said on Monday, even as experts remain divided over its effectiveness.
Remdesivir was developed by U.S. drugmaker Gilead Sciences Inc, which cut its 2020 revenue forecast last month, citing lower-than-expected demand and difficulty in predicting sales of the treatment. Cipla is among several firms licensed to make and sell generic versions in developing nations.
Cipla’s version, Cipremi, was commercially launched in July and costs just above $50 per 100 mg vial.
“From October onwards, (the company is) seeing very sharp increase in (remdesivir) monthly volumes … there are no constraints on supplies now,” Cipla’s global chief financial officer, Kedar Upadhye, told Reuters.
He said the company had sold more than 300,000 vials of the drug across the country as of September.
Remdesivir has become the standard of care for patients hospitalised with severe COVID-19, with more than 50 countries including the United States approving its use.
But the World Health Organization (WHO) said last month that its global trial of COVID-19 therapies had found that remdesivir did not have a substantial effect on the length of patients’ hospital stays or their chances of survival.
“In India, the protocols (on remdesivir) have not changed, and demand continues,” Cipla’s Upadhye said, adding that the company has also begun export of the drug to “a few countries” in the second quarter, without giving any other details.
Mumbai-based Cipla, which has already been supplying the drug to South Africa since July, posted a 41.2% rise in consolidated net profit on Friday for the quarter ended Sept. 30.”
Gold gains as Biden victory dents dollar, boosts stimulus hopes
Stimulus hopes under Biden boost demand for gold.
Reuters reports: “Gold rose on Monday as Joe Biden’s win in the U.S. presidential race weighed on the dollar and ignited hopes of more monetary stimulus measures to revive an economy battered by COVID-19. Spot gold rose 0.4% to $1,960.11 per ounce by 0817 GMT. Earlier in the session, it hit its highest since Sept. 16 at $1,965.33. U.S. gold futures gained 0.4% to $1,958.80.
“Gold prices are moving up anticipating another stimulus (package) by the U.S. and once that comes, you could see another leg of this rally,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai, India. “Considering the way currency debasement is taking place, further upside should not be ruled out… Prices on COMEX can test the $1,980-$1,985 level in a month’s time.”
The dollar index languished near a 10-week low. Democrat Biden clinched the presidency on Saturday clearing the threshold of 270 Electoral College votes. Republicans appear to have retained control of the Senate, although the final makeup may not be clear until runoff votes in Georgia in January. A potentially divided U.S. congress may mean a smaller fiscal stimulus package, but that could put the spotlight on the Federal Reserve to prop up the economy.
Gold tends to benefit from widespread stimulus as it is considered a hedge against inflation and currency debasement. As the pandemic is shaping the economic backdrop, investors will continue to see low interest rates and a weaker U.S. dollar and that should help gold perform relatively well, said ANZ analyst Daniel Hynes.
Global coronavirus infections surpassed 50 million on Sunday, a Reuters tally showed. Technically, gold may rise to $1,975, having cleared resistance at $1,951, Reuters technical analyst Wang Tao said. Silver rose 0.8% to $25.79 per ounce. Platinum climbed 1.4% to $901, while palladium fell 1.3% to $2,458.48.”
India’s domestic air passenger traffic reaches over half of pre-COVID levels: MOCA secy
India’s domestic passenger traffic has reached more than half of pre-coronavirus pandemic level operations with the number of daily air travellers crossing over two lakh in November, a top official of the Union Ministry of Civil Aviation (MOCA) said on Saturday.
MOCA Secretary Pradeep Singh Kharola said when flights resumed after a hiatus of two months due to the COVID-19 outbreak, there were only 30,000 air passengers on the first day but the number reached over two lakh on November 2.
He also said almost 100% bookings and check-ins are now happening through the web and hailed the country’s aviation fraternity for adapting very well to the new normal.
BSE Q2 net profit grows 28%, revenue up 15%
No slump in earnings for the stock bourse as retail trading booms.
PTI reports: “Leading stock exchange BSE has reported 28 per cent surge in net profit at Rs 46.81 crore for three months ended September 30.
In comparison, the exchange posted a net profit of Rs 36.69 crore in the corresponding quarter of previous year, BSE said in a statement.
Revenue from operations rose 15 per cent to Rs 125.38 crore in July-September 2020-21 from Rs 108.89 crore in the year-ago period.
The number of transactions processed on StAR Mutual Fund platform increased 60 per cent to 4 crore during the half year ended September 30, 2020 from 2.50 crore transaction processed during the same period a year ago.
The average daily turnover in equity segment climbed 44 per cent to Rs 3,703 crore during April-September this fiscal as compared to Rs 2,563 crore in the same period last year.”
Bigbasket faces potential data breach; details of 2 crore users put on sale on dark web
Grocery e-commerce platform Bigbasket has faced a potential data breach which could have leaked details of its around 2 crore users, according to cyber intelligence firm Cyble.
The company has filed a police complaint in this regard with Cyber Crime Cell in Bengaluru and is verifying claims made by cyber experts.
Cyble said that a hacker has put data allegedly belonging to Bigbasket on sale for around ₹30 lakh.
“In the course of our routine dark web monitoring, the research team at Cyble found the database of Big Basket for sale in a cyber crime market, being sold for over $40,000. The leak contains a database portion; with the table name ‘member_member’ The size of the SQL file is about 15 GB, containing close to 20 million user data,” Cyble said in its blog.
Fixed deposits vs. debt funds: Balancing safety and returns
The falling rates of bank fixed deposits (FDs) have led many retail investors to look for alternatives to fixed income generating higher returns.
While debt mutual funds (MFs) have gained significant traction among retail investors over the last few years due to higher returns, the setbacks suffered by many debt MFs in the corporate debt segment have scared investors. An in-depth comparison between debt funds and bank FDs can help investors make a judicious choice based on their risk appetite.
US dollar continues slump
Rupee rises 14 paise against US dollar in early trade
A great start to the week for the rupee as well.
PTI reports: “The rupee appreciated by 14 paise to 73.94 against the US dollar in opening trade on Monday, tracking a massive rally in domestic equity markets after Joe Biden was declared as the winner of the US presidential election.
Forex dealers said a weak dollar overseas and persistent foreign fund inflows also supported the local unit.
At the interbank forex market, the domestic unit opened strong at 73.95 against the US dollar, then gained a little more to 73.94, registering a rise of 14 paise over its previous close.
In the previous session, the rupee had gained 28 paise to end at 74.08 against the US dollar.
On the equity front, after touching its lifetime peak of 42,566.34 in the opening session, the BSE Sensex was trading 627.21 points or 1.50 per cent higher at 42,520.27.
The broader NSE Nifty too claimed a fresh high of 12,451.80. Later, it was trading with 178 points or 1.45 per cent gain at 12,441.55.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, dipped 0.06 per cent to 92.16.
The greenback weakened against its major rival currencies, as investors started eyeing riskier assets after Biden’s victory.
“Joe Biden has won the US presidential election. Under a Democrat President and a Republican Senate scenario, few would have expected this kind of a risk rally. However, the markets are perhaps viewing a Biden win as restoring stability and reducing uncertainty on various domestic and foreign policy issues,” Abhishek Goenka, Founder and CEO, IFA Global, said.
Though the second US fiscal stimulus package may not be as magnanimous given Republican control of Senate, the US economy has been recovering well, with most economic data beating expectations, he added.
“US dollar index fell this early Monday morning trade as investors heralded Joe Biden’s election as US president by buying trade-exposed currencies on expectations that a calmer White House could boost world commerce and that monetary policy will remain easy,” Reliance Securities said in a report.
Foreign institutional investors remained net buyers in the capital market as they purchased shares worth Rs 4,869.87 crore on Friday, according to provisional exchange data.
Meanwhile, Brent crude futures, the global oil benchmark, rose 2.71 per cent to USD 40.52 per barrel.”
Nasscom offers help to fill STEM skill gap in U.S
Shortage of STEM (science, technology, engineering and mathematics) talent is the key challenge currently faced by the technology sector in the U.S and this is clearly highlighted by the high degree of country’s overall unemployment on one hand, and more than half a million job vacancies in computer occupation on the other, said Nasscom in a note released on Sunday to extend congratulations to President-elect Joe Biden, and Vice-President elect Kamala Harris.
The apex body said it looked forward to working together with the new U.S. administration, to find solutions to the STEM skills gap, and enable America to be more competitive, to grow and create more jobs.
Nasscom member companies have an important history in the U.S.: they work with over three-quarters of the Fortune 500 companies in the country, providing them vital technology services and helping them innovate, compete, and grow. India-U.S. bilateral trade increased by over 400% since 2005, with total increase in value from $37 billion in 2005 to $149 billion in 2019: technology sectors of both countries have played a critical role in driving this, it said.
Indian shares hit record highs as Biden win boosts IT stocks, Asian markets
A great start to the week for Indian shares after the US election results.
Reuters reports: “Indian markets touched record highs on Monday as IT stocks gained after a report said that U.S. President-elect Joe Biden planned to ease policy on work visas, with his victory also boosting broader Asian markets and aiding domestic sentiment.
The NSE Nifty 50 index rose 1.33% by 0430 GMT and the S&P BSE Sensex index gained 1.38%. Both the indexes recorded all-time highs when they scaled 42,474.97 and 12,430.9, respectively.
MSCI’s broadest index of Asia Pacific shares outside of Japan jumped 1.3%, the highest since January 2018, after Biden’s win raised expectations of fewer regulatory changes and more monetary stimulus.
“Investors feel that with this new president, there will be more flexibility on the policy front,” said Anita Gandhi, director at Arihant Capital Markets in Mumbai.
The Nifty IT index rose as much as 2% after news portal Moneycontrol published a report https://www.moneycontrol.com/news/world/us-election-2020-joe-biden-plans-to-increase-h-1b-visa-limit-and-remove-country-quota-for-green-cards-6086831.html sourced from PTI on Sunday which said Biden planned to increase limits on H-1B work visas. Such visas help firms employ Indian workers in the United States.
“This (policy) will help the many Indian IT employees working overseas,” Arihant’s Gandhi said.”
IT sector heavyweight Infosys gained nearly 3%.
Banking stocks were also among the session’s top gainers. The sector’s main sub-index rose about 2.4% and was up for a sixth consecutive session.
Private-sector lender ICICI Bank gained 3.6%, and Axis Bank rose 2.8%.
Drugmaker Divi’s Labs rose as much as 6.11% after the company on Saturday reported https://www.bseindia.com/xml-data/corpfiling/AttachLive/4ee05fd2-333a-4dab-89bd-6dd3650096a2.pdf a higher profit for the September-quarter. The Nifty pharma index jumped 1.6%.
Among the major decliners were drugmaker Cipla and cigarettes-to-hotels conglomerate ITC Ltd. Both the companies reported results on Friday.”
Google, Walmart’s PhonePe hit by India’s move to limit some digital payments players
Global tech giant Google on Friday criticised India’s move to cap the share of transactions some companies within the country’s digital payments space can account for, saying it would hinder the nation’s burgeoning digital payments economy.
Google’s criticism came after India’s flagship payments processor the National Payments Corp of India (NPCI) on Thursday said third-party payments apps, from Jan. 1, will not be allowed to process more than 30% of the total volume of transactions on state-backed United Payments Interface (UPI) framework, which facilitates seamless peer-to-peer money transfers.
The move will likely stymie the growth of payments services offered by Facebook, Alphabet’s Google and Walmart, while boosting the likes of Reliance’s Jio Payments Bank and SoftBank-backed Paytm, which are armed with bank permits.