The benchmark stock indices opened the day on a flat note as index heavyweights failed to impress.
Join us as we follow the top business news through the day.
India rice rates remain at 3-year peak on strong export demand
Rice export prices in India, the top exporter of the staple, remained anchored near a three-year high this week as other Asian and African buyers continued purchases, shrugging off the uptick in rates in recent weeks.
India’s 5% broken parboiled variety was quoted at $402-$408 per tonne this week, unchanged from last week, which was the highest since May 2018.
“In the last two weeks prices have gone up, but buyers are still making decent purchases,” said an exporter based at Kakinada in Andhra Pradesh.
Andhra Pradesh will use a deepwater port to export rice for the first time in decades amid a global shortage of the grain, according to a government order seen by Reuters, which could raise shipments this year by a fifth.
A revision to neighbouring Bangladesh’s import policy in part helped lift global rice prices to a seven-month high in January, according to the latest report of Food and Agricultural Organisation (FAO).
Oil’s losses deepen as OPEC, IEA caution ends rally
More pain for oil investors.
Reuters reports: “Oil prices fell a second day on Friday, extending losses after OPEC cut its demand forecast and the International Energy Agency said the market was still over-supplied.
Brent crude was down 47 cents, or 0.8% at $60.67 a barrel by 0309 GMT, having dropped half a percent the previous session. U.S. oil was down 53 cents, or 0.9% at $57.71 a barrel, after falling by 0.8% on Thursday.
Both benchmarks closed on Wednesday at their highest levels since January 2020 after a nearly record-setting run of consecutive daily gains.
Oil prices have risen over the last few weeks as OPEC and other producers in the group known as OPEC+ cut production, while Saudi Arabia also promised unilateral reductions in output that started this month.
“OPEC production is likely to fall this month led by declines in Saudi Arabia and Libya. This should deepen the global market deficit and support prices,” said Capital Economics.
Before the declines, U.S. crude’s relative strength index was at the most overbought level since the second Iraq war, said Bob Yawger, director of energy futures at Mizuho Securities.
“There are some signs that the market is setting up for a pullback,” he said. Oil demand around the world in 2021 will recover more slowly than earlier thought, the Organization of the Petroleum Exporting Countries (OPEC) said.
Previously, the International Energy Agency (IEA) said oil supply was still outstripping demand globally, although COVID-19 vaccines are expected to help demand recover.
U.S. crude inventories dropped unexpectedly last week, declining by more than 6 million barrels as refiners increased output to pre-pandemic levels, according to the Energy Information Administration.
Analysts in a Reuters poll had forecast a rise of nearly 1 million barrels.
Still, gasoline inventories increased more than expected, gaining by 4.3 million barrels in the last week, against forecasts of a 1.8 million rise.
Gasoline demand over the last four weeks is 10% below the same time last year.”
SC upholds validity of e-voting for winding up of six mutual fund schemes of Franklin Templeton
The Supreme Court on Friday upheld the validity of e-voting process for winding up of six mutual fund schemes of Franklin Templeton, and said disbursal of funds to unit holders will continue.
A bench of justices S.A.Nazeer and Sanjiv Khanna, while rejecting the opposition by some unit holders to the e-voting process, said disbursal of funds has to be done as per the earlier order of the apex court.
The top court had on February 2 ordered that ₹9,122 crore be disbursed within three weeks to the unit holders of Franklin Templeton’s six mutual fund schemes which are proposed to be wound up.
It had said that disbursal of money would be done in proportion to unit holders’ interest in the assets.
Ashok Leyland tanks 8% after Q3 net loss
A poor quarter for the heavy automobiles manufacturer.
PTI reports: “Shares of Ashok Leyland on Friday tumbled 8 per cent after the company reported a net loss of Rs 19 crore for the third quarter ended December 31, 2020.
The stock tanked 8 per cent to Rs 124.10 on BSE.
On NSE, it plunged 6.77 per cent to Rs 125.90.
The company had reported a net profit of Rs 28 crore in October-December quarter of 2019-20.
The revenues for the third quarter on a standalone basis stood at Rs 4,814 crore as compared with Rs 4,016 crore in the year-ago period, Ashok Leyland said in a statement.
The company said its domestic light commercial vehicle (LCV) volumes during the third quarter stood at 15,991 units, up 3 per cent from 12,574 units in the same period of previous fiscal.
Export volumes during the period under review stood at 2,941 units, up 24 per cent from 2,371 units in October-December period of 2019-20.”
Bitcoin soars to all-time high after BNY Mellon announces crypto venture
Bitcoin on Thursday jumped to a fresh all-time high after BNY Mellon said it formed a new unit to help clients hold, transfer, and issue digital assets.
The new unit at BNY Mellon is expected to roll out the offerings later this year, the bank said.
Bitcoin hit a record high of $48,481.45 earlier on Thursday and was last up 6.9% at $47,932. The largest virtual currency in terms of market capitalization has gained about 66% so far this year and soared roughly 1,200% since mid-March 2020.
The BNY Mellon announcement came just days after Elon Musk’s Tesla revealed it had bought $1.5 billion worth of the cryptocurrency and would soon accept it as a form of payment for its cars.
SoftBank pulls out of Latin America partnership with Oyo Hotels
Another setback for the Indian startup.
Reuters reports: “The Latin American unit of Indian hotel startup Oyo Corp has ended its joint venture with the SoftBank Latin America Fund, less than six months after they struck a partnership in the region, both companies said on Thursday.
Oyo’s business in Latin America, known as Oyo Latam, on Wednesday said it was moving to a digital-only model, and that the changes would require laying off nearly its entire staff.
SoftBank Group has poured $75 million into Oyo in Latin America, part of its more than $1 billion investment in the parent company.
Although hotels in the region can still operate under Oyo’s brand, operations will now be managed directly from Oyo’s home base in India, an Oyo Latam spokeswoman told Reuters.
“The Latin American joint venture (with SoftBank) has ceased to exist,” she said, adding that did not mean Oyo was completely shutting down in the region. “It was another adaptation due to the pandemic,” she said.
Japan-based SoftBank added the decision was made jointly with Oyo due to challenges brought about by the coronavirus pandemic, and that it would no longer invest in the company in the region.
In September, Reuters reported that SoftBank was taking a more direct role in the virus-hit hospitality startup through a joint venture in Latin America to manage roughly 1,000 hotels.
Oyo has struggled across its markets worldwide as the coronavirus crisis pummeled the tourism industry, and has drastically scaled back its workforce.”
Rupee gains 10 paise to 72.77 against US dollar in early trade
A decent start to the day for the rupee.
PTI reports: “The rupee appreciated by 10 paise to 72.77 against the US dollar in opening trade on Friday supported by positive domestic equities and sustained foreign fund inflows.
At the interbank forex market, the local unit opened at 72.79 against the US dollar, then inched higher to 72.77 against the greenback, registering a rise of 10 paise over its previous close.
On Thursday, the rupee had settled at 72.87 against the American currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, advanced 0.07 per cent to 90.48.
“The US dollar Index has started flat this morning in Asian trade as the markets look to fresh triggers in the market. Upside remained limited as new signs of weakness in the US jobs market dented investor expectations about the pace of a pandemic recovery,” Reliance Securities said in a research note.
Market participants will be keeping an eye on inflation and industrial production numbers and better-than-estimate numbers could extend gains for the currency, forex traders said.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 94.63 points higher at 51,626.15, and the broader NSE Nifty advanced 24.45 points to 15,197.75.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 944.36 crore on Thursday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 0.62 per cent to USD 60.76 per barrel.”
Airfares raised, to be in force till March 31
Air travel has become costlier, with the Union government on Thursday increasing the minimum and maximum fares an airline can levy on a given route.
The minimum fare on a route has gone up by 10% and the maximum by nearly 30%, according to the order issued by the Civil Aviation Ministry. The revised fares come into effect immediately.
The government has been regulating airfares from May 25, 2020, when domestic flights resumed after the nationwide lockdown. There are seven fare bands, which vary according to the duration of a flight.
Indian shares muted as Infosys gains, ITC slides
A slow start to the day for stocks.
Reuters reports: “Indian shares were little changed on Friday as Infosys and other IT services stocks gained after having lagged the broader market for much of this month, while ITC slid after a lacklustre earnings report.
India’s stock benchmarks have climbed more than 11% this month after a range of positive developments, including a high-spending federal budget, strong corporate earnings, and progress on COVID-19 vaccinations.
The NSE Nifty 50 index was up 0.04% at 15,180.00 by 0430 GMT, while the S&P BSE Sensex rose 0.08% to 51,572.31.
The Nifty IT index, tracking India’s software services firms, was up 1%, rising the most among 14 sectoral indexes. Up to Thursday’s close, the index had gained only about 5% in February, a month in which the Nifty 50 and most other sectors have seen double-digit gains.
“We are seeing sectoral rotation, which is part of a bull market … IT has done well already, but after a pause, it is rallying again,” said A.K. Prabhakar, head of research at IDBI Capital in Mumbai.
Prabhakar added that a withdrawal by India and China of some troops from a bitterly contested border area was also aiding sentiment.
Software services giant Infosys was the top boost to the Nifty 50 with a 1.8% gain.
Cigarettes-to-hotels conglomerate ITC fell nearly 4% after it posted lower December-quarter profit.
Bayer Cropscience plunged 6.4% after reporting a quarterly loss, while conglomerate Piramal Enterprises jumped 5.7% after its quarterly profit rose.
Other Asian shares hovered just below a record high as mixed U.S. economic data caused some investors to show restraint.”
17 major OTT players adopt toolkit for regulation
Even as the government is soon expected to come out with regulations for OTT platforms, the Internet and Mobile Association of India (IAMAI) on Thursday said 17 platforms, including Netflix, Disney+ Hotstar and Amazon Prime Video, have adopted a ‘toolkit’ for effective implementation of the self-regulation code introduced in 2020.
The industry body added that it will also set up an ‘IAMAI Secretariat for the Code’, comprising representatives from the signatories to the Code as well as IAMAI.
This will administer the implementation of the Code and the toolkit.
Amit Goenka, Chair, Digital Entertainment Committee, IAMAI said, “This toolkit amplifies all the critical points that were addressed in the Code signed last year and aims to address feedback received from the Ministry of Information and Broadcasting, particularly on strengthening the grievance redressal mechanism. It further sets out clear tent poles that the OCCPs [Online Curated Content Provider] need to undertake to achieve a common goal of entertaining millions of Indians responsibly.”