The benchmark stock indices opened the day on a negative note, snapping a winning streak as coronavirus cases continue to rise.
Join us as we follow the top business news through the day.
Rupee slips for 5th straight session, down 15 paise at 74.73 against USD
The rupee fell for the fifth straight session and settled 15 paise down at 74.73 (provisional) against the US dollar on Friday as rising COVID-19 cases, weak domestic equities and strengthening American currency weighed on investors’ sentiment.
At the interbank forex market, the local unit opened at 74.75 against the greenback and traded in the range of 74.53 to 74.96 during the day.
The rupee finally ended at 74.73 against the American currency, registering a fall of 15 paise over its previous close. On Thursday, the rupee had settled at 74.58 against the American currency.
This is the fifth straight session of loss for the domestic unit, during which it has seen depreciation of 161 paise.
“Rupee traded weak yet again as the weak trend continues on the back of government spending on vaccines and treatment of COVID-19 increasing numbers,” said Jateen Trivedi, Senior Research Analyst at LKP Securities.
Sensex sheds 155 pts; Nifty slips below 14,850
Equity benchmark Sensex dropped 155 points on Friday, tracking losses in index heavyweights ICICI Bank, Reliance Industries and HDFC Bank amid largely negative cues from global markets.
The 30-share BSE index ended 154.89 points or 0.31 % lower at 49,591.32.
Similarly, the broader NSE Nifty slipped 38.95 points or 0.26 % to 14,834.85.
Bajaj Finance was the top loser in the Sensex pack, shedding around 3 %, followed by UltraTech Cement, NTPC, Axis Bank, ICICI Bank, IndusInd Bank, Reliance Industries, L&T and HDFC Bank.
On the other hand, Sun Pharma, HUL, Tech Mahindra and Dr Reddy’s were among the gainers.
Indian consumer goods stocks gain as partial lockdowns return
The lockdown is turning out to be bullish for consumer good stocks.
PTI reports: “Shares of consumer goods companies in India rose as much as 1.3% on Friday, with retailers stocking up on supplies as many states in the country imposed partial lockdowns and curfews to counter a stubborn rise in COVID-19 cases.
India reported a record number of new COVID-19 infections on Friday, prompting states such as Maharashtra, Karnataka and others to either impose night or weekend curfews as the country battles a second wave of infections and states complain of vaccine shortages.
Investors banked on a pickup in demand for consumer staples and personal care items, sending the Nifty subindex for fast-moving consumer goods up as much as 1.3% to record highs, lifting the broader market as well.
Heavyweight Hindustan Unilever Ltd, which sells Lipton teas and Annapurna branded flour, rose as much as 3.0%, while ITC Ltd gained as much as 1.3%.
“We are witnessing some uptick in demand across impacted geographies for our hygiene portfolio under the Savlon brand, as well as food brands including Aashirvaad flour, Yippee noodles and ITC MasterChef frozen snacks among others,” an ITC spokesman said.
Purchase of fruits, vegetables, snacks and personal care items had risen by about 40% in cities such as Mumbai, Pune and Nagpur, said Hari Menon, founder of online grocery retailing website BigBasket.
Analysts, however, said they don’t expect the pickup in demand to be as high as when India went into a country-wide lockdown last March, since the curfews are partial and not as stringent as the last time.
“A pickup in demand and delivery similar to the previous lockdown is now expected for FMCG companies, but the pickup will not be as great as it was last time,” said KK Mittal, investment advisor at Venus India Asset Finance.”
McDonald’s India to operate 24/7 for contactless McDelivery in Mumbai
McDonald’s expands its offering in India.
PTI reports: “Westlife Development, which operates McDonald’s restaurants in southern and western region in India, on Friday said the quick service brand’s restaurants will operate 24/7 for contactless delivery from select stores in Mumbai.
“In wake of the new restrictions announced to curb the spread of COVID-19 infections in Maharashtra, Westlife Development Ltd owned McDonald’s restaurants will operate 24/7 for contactless McDelivery from select stores in Mumbai,” Westlife Development said in a regulatory filing.
The brand will further be doubling up on its convenience channels of McDelivery, takeaway and On-the-Go as the state has announced new set of restrictions to arrest the mounting COVID-19 cases, the company added.
Saurabh Kalra, Chief Operating Officer, McDonald’s India West and South said “We have been able to cater to our customers’ demand through our omni-channel strategy making McDonald’s food available for consumers wherever, whenever and however they want.” Westlife Development recently announced vaccination cover for all its 10,000 employees which includes both its corporate office employees as well as the McDonald’s restaurant staff.”
India’s income tax receipts surpass revised budget target for 2020/21 – official
Some good news for the Centre on the tax front.
Reuters reports: “India’s federal net direct tax receipts, mainly comprising corporate and individual income tax, were 9.45 trillion rupees ($126.33 billion) for the fiscal year ending on March 31, surpassing the revised budget target, a government official said.
“Net direct tax collections for the financial year 2020/21 have shown an upswing, despite the inherent challenges brought on by the COVID-19 pandemic,” Pramod Chandra Mody, head of the Central Board of Direct Taxes told reporters on Friday in virtual briefing.”
Facebook sued for failing to remove anti-Muslim hate speech
Muslim Advocates, a civil liberties organisation, has sued Facebook and its executives in Washington, DC, for failing to regulate anti-Muslim hate speech on the platform.
The advocacy group alleges that Facebook CEO Mark Zuckerberg, COO Sheryl Sandberg and other executives have “deceived Congress and consumers by falsely stating that the company removes content that violates its standards and practices,” it said in a statement. The failure has amplified the volume of anti-Muslim hate bombarding Facebook users, it added.
“We do not allow hate speech on our platform and we regularly work with experts, non-profits, and stakeholders to help make sure Facebook is a safe place for everyone,” a Facebook spokesperson told The Hindu.
Cars, SUVs buck retail auto sales drop
Retail sales of passenger vehicles maintained growth in March with more than 2.79 lakh units sold, data released by the Federation of Automobile Dealers Associations (FADA) showed. The figure was not strictly comparable with the year-earlier period, when sales were halted by the nationwide COVID-19 lockdown.
Notwithstanding the lower base, overall vehicle sales slumped 28.6% to about 16.49 lakh units. Two-wheelers sales shrank by more than a third to about 11.95 lakh units, while three-wheeler deliveries halved to 38,034 units. Retail sales of commercial vehicles contracted 42% from a year earlier to 67,372 units in March.
Tractor sales, however, continued to grow, rising 29.2% to 69,082 units.
India’s retail inflation likely rose in March but stayed within target
Inflation is likely to continue being a pain for the RBI.
Reuters reports: “India’s retail inflation edged up to a four-month high in March, led by an increase in food and fuel prices, but remained within the Reserve Bank of India’s target range, a Reuters poll predicted.
The April 5-8 poll of more than 50 economists showed retail inflation rose to 5.40% in March from a year earlier as opposed to 5.03% in February. Forecasts ranged from 4.60% to 6.11%.
“Although India’s core inflation has remained elevated for a while, the recent acceleration in headline inflation largely reflects higher food prices,” said Tuuli McCully, head of Asia-Pacific economics at Scotia Bank.
“I expect the pickup to be a temporary phenomenon, yet there are significant risks surrounding the inflation outlook.”
The RBI raised its inflation projection for the first half of this fiscal year to 5.2% on Wednesday, still within the RBI’s target range of 2%-6%.
“With some cities already under COVID-19 lockdown and maybe more facing the same risk, the panic-buying like a year ago may set in to pressure inflation further up in the months ahead,” said Prakash Sakpal, senior Asia economist at ING.
The RBI kept the key repo rate at record low 4.0% and its monetary policy accommodative amid concerns of rising COVID-19 cases that could derail the nascent recovery.
Asia’s third-largest economy grew 0.4% in the Oct-Dec quarter after contracting for two consecutive quarters, its deepest recession in about four decades.
India reported a record 126,789 COVID-19 cases on Thursday and a few states have renewed restrictions to contain the spread while complaining of vaccine shortages and demanding inoculations for younger people.
A separate Reuters poll last week predicted the biggest risk to economic growth was a surge in coronavirus cases and that the central bank would keep rates on hold this fiscal year.
“The RBI will continue to see through elevated inflation and focus on supporting growth at least until the COVID-19 risk is firmly behind,” added Sakpal.
The latest poll also predicted industrial output contracted 3.0% during February from a year earlier.
Infrastructure output, which accounts for about 40% of total industrial production and comprises eight sectors, contracted 4.6% in February.
Production of all eight core industries – including coal, crude oil, natural gas, petroleum refinery products, fertilizers, steel, cement and electricity – shrank in February.”
Indian shares flat as consumer stocks rise, metals fall
Stock indices stage a recovery.
Reuters reports: “Indian shares were little changed on Friday, as consumer goods stocks jumped after some states imposed new restrictions to combat a resurgence in COVID-19 cases, while investors sold off high-flying metal stocks.
The country’s 10-year bond yield slipped below 6% for the first time in nearly two months, continuing a slide after the central bank announced a secondary market government securities acquisition programme this week.
Surging COVID-19 infections have threatened to disrupt a nascent economic recovery in India and dragged its main stock indexes from record highs hit in February. Total cases in the country jumped by another daily record on Friday.
Still, analysts believe that the impact on the market may not be very significant as a nationwide lockdown of the kind seen last year, which left many thousands jobless, is not expected.
The NSE Nifty 50 index was down 0.03% at 14,871.45, while the S&P BSE Sensex was 0.01% lower at 49,743.85.
Consumer products giant Hindustan Unilever was up 3% and the biggest boost to the Nifty 50. Shares in consumer goods companies were up 0.8%.
“There seems to be a steady return to restocking of staples, as restrictions come into force, and the market is clearly trying to capture that movement when buying into (consumer goods) stocks,” said Saurabh Jain, assistant vice president of research at SMC Securities in New Delhi.
“Overall, the market is not very concerned about the restrictions as they are not likely to be as bad as last time, and the central bank too seems to be more accommodative this time,” he added.
Metals stocks, the best performing sector this year with a 37% advance, slipped 0.73%.
Meanwhile, the southern state of Karnataka late on Thursday became the latest to announce night curfews, imposing curbs in a number of districts with soaring COVID-19 cases, including in the technology hub of Bengaluru.”
Faster global growth driven primarily by U.S., China and India, says World Bank president
There is now a faster global growth driven primarily by the U.S., China and India, World Bank president David Malpass has said even as he expressed concern over growing inequality due to the COVID-19 pandemic.
He said here is also the concern of inequality in terms of vaccinations and median income that’s not going up very fast for some countries.
“But there’s also the concern that there’s inequality. Inequality in terms of vaccinations, in terms of median income that’s not going up very fast for some of the countries and may even be going down. There’s the interest rate differential, where poor countries face much higher interest rates and they haven’t gone down the way global interest rates have done,” he said.
Shares snap winning streak as banks fall
The pandemic strikes back at markets.
Reuters reports: “Indian shares ceded ground on Friday after three sessions of gains, pressured by a fall in private-sector lenders, while shares of consumer goods producers gained amid restrictions in some states after a resurgence in coronavirus cases.
The NSE Nifty 50 index was down 0.08% at 14,863.50, while the S&P BSE Sensex was 0.16% lower at 49,666.27. The two biggest drags on the Nifty 50 were HDFC Bank and ICICI Bank.
India has been reporting record daily increases in COVID-19 cases, prompting some states to declare stringent restrictions.
Shares in consumer goods companies climbed 1.3%, the most among 14 sectoral indexes. Consumer products giant Hindustan Unilever was up 3%.”
India to resume buying oil from Iran once U.S. sanctions ease
India will look to resume buying crude oil from Iran the moment U.S. sanctions are eased, helping it diversify its import basket, a senior government official said.
India stopped importing oil from Iran in mid-2019 following sanctions on the Persian Gulf nation by the Trump administration.
The U.S. and other world powers are meeting in Vienna to revive the Iran nuclear deal.
“Once the sanctions are lifted, we can look to resume oil imports from Iran,” the official, who did not wish to be identified, said.
Indian refiners have begun preparatory work and can swiftly enter into contracts once the sanctions are lifted, he said.