The Nifty and the Sensex opened the day on a positive note with gains of nearly 1% as a strong uptrend is in progress.
Join us as we follow the top business news through the day.
Bitcoin battles for support at $50,000
A technical view on bitcoin.
Reuters reports: “Bitcoin dropped below $50,000 on Tuesday, as investors began to get a little nervous about the digital currency’s lofty valuation and some leveraged players took profit.
The cryptocurrency dropped more than 10%, its largest daily drop in a month, to hit $48,575. That extends a sharp withdrawal of more than 16% from a record high hit on Sunday, although bitcoin remains up around 75% for the year.
The drop came despite broad U.S. dollar weakness.
“The market’s rallied almost unimpeded since the beginning of the month and to some degree since the beginning of the year,” said James Quinn, managing director at digital asset platform Q9 Capital in Hong Kong.
“Seeing some selling at all is perfectly healthy and normal,” he said, though adding that some $1.5 billion in liquidation of leveraged positions on crypto exchange Binance was large and suggested retail investors might be selling.
The cryptocurrency market has been running hot this year as big money managers begin to take the asset class seriously and have made large purchases that have driven even more confidence among small-time speculators.
A $1.5 billion investment in the crytocurrency by electric carmaker Tesla this month has helped vault bitcoin above $50,000 but may now lead to pressure on the company’s stock price as it has become sensitive to movements in bitcoin.
U.S. Treasury Secretary Janet Yellen, who has flagged the need to regulate cryptocurrencies more closely also said on Monday that bitcoin is extremely inefficient at conducting transactions and is a highly speculative asset.
Ether, a coin linked to the ethereum blockchain, which often moves in tandem with bitcoin also dropped more than 10% and last bought $1,613, down about 20% from last week’s record peak. Bitcoin bought $49,846 at 0605 GMT.
“They have had a spectacular run and the sharp reversal overnight is really not unexpected,” said Michael McCarthy, chief strategist at brokerage CMC Markets in Sydney.
“But because we’re so lacking in fundamentals, it’s the big figures that have proved to be support and resistance points – so $50,000, $40,000 and $30,000 are the key chart levels at the moment. If we see it heading through $50,000, selling could accelerate.””
Zomato raises $250 million in funding from Tiger Global, Kora and others
Info Edge on Monday said its investee company Zomato has raised $250 million (over ₹1,800 crore) in funding from Tiger Global, Kora and others, valuing the online food ordering platform at $5.4 billion.
“Zomato Pvt Ltd has closed a primary fundraise of $250 million from five different investors…The transactions valued Zomato at a post-money valuation of $5.4 billion (exchange rate of ₹73.5 per U.S. dollar),” Info Edge said in a regulatory filing.
On a fully converted and diluted basis, Info edge’s effective stake in Zomato stands at 18.4%, it added.
Comments from Zomato could not be elicited immediately.
Bitcoin falls as much as 6% as it pulls back from record high
Bitcoin volatility continues.
Reuters reports: “Cryptocurrency bitcoin dropped as much as 6% in Asia trade on Tuesday and was trading around $52,000 as it pulls back from record highs following a long and sharp rally.
Bitcoin hit a low of $50,848 in the session following a wild ride on Monday where it traded in a $10,000 range. It’s up nearly 90% from the year’s low of $27,734.
Ether, the coin linked to the ethereum blockchain, also dropped more than 5% and last bought $1,707, down almost 17% from last week’s record peak.”
Tata Motors confident of sustaining growth amid supply chain concerns
Even as shortage of semiconductors, steel prices and muted macroeconomic indicators pose a challenge for the auto industry as it recovers from the impact of COVID-19, Tata Motors said growth momentum in its passenger vehicles was sustainable, as it was driven by latent demand and its ‘new forever’ range of products, a senior company executive said.
Speaking to The Hindu, Shailesh Chandra, president, Passenger Vehicles Business Unit, Tata Motors, said that he expected the passenger vehicle segment to close the current fiscal year with a decline of about 5%. This, he said, was an improvement given an earlier expectation of a 20% decline. For the coming financial year he expects a double-digit growth for the entire segment.
DHFL auditor Grant Thornton reports further fraud of ₹6,182 crore
Dewan Housing Finance Corporation (DHFL) on Monday said its transaction auditor, Grant Thornton, had reported further fraudulence amounting to ₹6,182 crore in the company.
The administrator of the company received an initial report from the agency appointed as the transaction auditor indicating there were certain transactions that were “undervalued, fraudulent and preferential in nature”, DHFL said in a regulatory filing.
“The monetary impact of the above transactions covered under the application amounts to ₹5,381.90 crore towards outstanding principal, ₹589.36 crore towards accrued interest and ₹210.85 crore towards notional loss of interest on account of charging lower rate of interest,” said the filing about the estimated impact on the company. These transactions happened over a period of time. The management of DHFL is currently being run under an administrator appointed under the Insolvency and Bankruptcy Code after frauds were detected in the company. The administrator later appointed GT as the transaction auditor to conduct an investigation of the affairs of the firm.
‘Growth momentum needs to be strengthened’
The growth momentum needs to be strengthened for a sustained revival of the economy and a quick return to the pre-COVID trajectory, RBI Governor Shaktikanta Das said, pitching for a status quo on rates, at the last meeting of the Monetary Policy Committee (MPC).
All the six members of the MPC had voted for keeping the policy repo rate unchanged at 4% at the three-day meeting which began on February 3, citing similar reasons.
Mr. Das, according to the minutes of the meeting released by the central bank on Monday, had said: “Growth, although uneven, is recovering and gathering momentum, and the outlook has improved significantly with the roll-out of the vaccine programme in the country.”
“The growth momentum, however, needs to strengthen further for a sustained revival of the economy and for a quick return of the level of output to the pre-COVID trajectory,” he added.
India Ratings raises banking sector outlook to ‘stable’
India Ratings and Research on Monday revised its outlook on the overall banking sector to ‘stable’ for the FY22 from ‘negative’ even as it saw higher stress emerging in the retail loan segment, going ahead.
For public sector banks (PSBs), the outlook has been revised to ‘stable’ from ‘negative’ and for private banks, the agency continues to have ‘stable’ outlook.
It estimated that overall stressed assets (gross non-performing assets + restructured assets) could rise 30% for the banking system; the increase is almost 1.7 times in the retail segment in the second half of FY22.
“The last nine months have provided banks the opportunity to beef up their provisions even more for legacy stressed assets, which were existing before the pandemic,” said the agency’s director (financial institutions), Jindal Haria.