The benchmark stock indices opened the day on a positive note, scaling fresh record highs in the process.
Join us as we follow the top business news through the day.
India’s high priority for now should be to grow at 7-8%: Former RBI guv Jalan
Words of advice from the former RBI Governor.
PTI reports: “Describing the Budget 2021-22 as “extremely good”, former RBI governor Bimal Jalan on Tuesday said that India’s high priority for now should be to grow at 7-8 per cent, and then give a “great preference” for employment rather than only investment.
In an interview with PTI, Jalan further said it does not seem that India will be able to achieve a USD 5-trillion economy target by 2024-25.
“This year’s Budget is extremely good… I think the rate of growth in India should be 7-8 per cent,” he said.
The Economic Survey 2020-21 has projected an 11 per cent growth for 2021-22, aided by V-shaped recovery and a 7.7 per cent contraction for the current year.
“That is the high priority (7-8 per cent growth rate). Once you have 7-8 per cent growth then there are issues about employment, and we should give a great preference for employment rather than only investment,” Jalan said.
The former RBI governor said in the next 18 months, India’s economic growth will hopefully bounce back to pre-COVID-19 levels.
Asked whether India will be able achieve a USD 5-trillion economy target by 2024-25, he said, “We are in 2021. So, four years are there and as of now, it does not seem that we will be able to reach that target.” The former RBI governor also said he does not think it is essential to fix a target.
Sensex, Nifty end marginally lower; PowerGrid rallies 6%
A flat day for stocks.
PTI reports: “Equity benchmarks Sensex and Nifty ended marginally lower on Tuesday as investors booked profits at higher levels amid a mixed trend in global markets.
After touching a lifetime high of 52,516.76 in opening session, the 30-share BSE Sensex settled 49.96 points or 0.10 per cent lower at 52,104.17.
Similarly, the broader NSE Nifty inched 1.25 points or 0.01 per cent lower to 15,313.45.
Axis Bank was the top laggard in the Sensex pack, shedding around 2 per cent, followed by ICICI Bank, Nestle India, Infosys, SBI and HUL.
On the other hand, PowerGrid rallied over 6 per cent. ONGC, NTPC, Kotak Bank and Reliance Industries were also among the gainers.
Domestic equities witnessed some amount of pullback after a brisk opening, said Binod Modi, Head – Strategy at Reliance Securities.
“PSU Banks and Metals remained in focus. However, selling pressure in Financials, IT and FMCG dragged index. Volatility index also surged almost 2 per cent. Notably, midcap and smallcap stocks remained in focus as improved earnings visibility has started attracting investors in this space,” he added.
Elsewhere in Asia, bourses in Hong Kong, Tokyo and Seoul ended on a positive note. Stock exchanges in Europe were trading on a mixed note in mid-session deals.
Meanwhile, the global oil benchmark Brent crude was trading 0.09 per cent lower at USD 63.24 per barrel.”
EPFO likely to declare rate of interest on EPF deposits for 2020-21 on March 4
Retirement fund body EPFO is likely to announce the rate of interest on provident fund deposits for financial year 2020-21, on March 4, when its Central Board of Trustees will meet at Srinagar.
The Employees’ Provident Fund Organisation (EPFO) is likely to take up the proposal to announce rate of interest for 2020-21 at its Central Board of Trustees (CBT) meeting scheduled on March 4, source said.
Talking to PTI, K.E. Raghunathan, an EPFO trustee said that on February 15 he received the intimation that the next CBT meeting is scheduled to be held on March 4, at Srinagar and that the agenda papers are likely to be sent soon.
He said that there is no mention about discussion on interest rate for 2020-21 in the intimation mail.
Speculation is rife that the EPFO may lower interest on provident fund deposits for this fiscal (2020-21), from 8.5% it provided for 2019-20,in view of more withdrawals and lesser contribution by members during this fiscal mainly due to the COVID-19 pandemic.
Amazon to make Fire TV Stick devices in India
U.S.-headquartered e-commerce giant Amazon on Tuesday announced plans to manufacture devices such as Fire TV stick in India.
“This is the first Amazon manufacturing line in India…” the company said in a blog post and added that it will commence its manufacturing efforts with contract manufacturer Cloud Network Technology, a subsidiary of Foxconn in Chennai, and start production later this year.
The device manufacturing programme will be able to produce hundreds of thousands of Fire TV Stick devices every year, catering to the demands of customers in India. Amazon will continuously evaluate scaling capacity to additional marketplaces/cities, depending on the domestic demand, it added.
Communications and IT Minister Ravi Shankar Prasad, who was briefed on the initiative by the company, said, “India is an attractive investment destination and is poised to become a major player in the global supply chain in the electronics and IT products industry…We welcome Amazon’s decision to set up a manufacturing line in Chennai, as it will enhance domestic production capacities, and create jobs as well.”
Govt to bring amendments to two Acts to enable privatisation of PSU banks
The Centre goes ahead with its privatisation plans.
PTI reports: “To facilitate privatisation of public sector banks, the government is likely to bring amendments to two legislations later this year.
Amendments would be required in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 for privatisation, sources said.
These Acts led to nationalisation of banks in two phases and provisions of these laws have to be changed for privatisation of banks, they said.
As the government has already announced the list of legislative business for the Budget session, it is expected that these amendments may be introduced in the Monsoon session or later during the year, sources added.
The ongoing Budget session is scheduled to take up as many as 38 Bills including the Finance Bill 2021, Supplementary Demands for Grants for 2020-21 and related Appropriation Bill, National Bank for Financing Infrastructure and Development (NaBFID) Bill, 2021, and Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.
Finance Minister Nirmala Sitharaman while presenting Budget 2021-22 earlier this month had announced privatisation of Public Sector Banks (PSBs) as part of disinvestment drive to garner Rs 1.75 lakh crore.
“Other than IDBI Bank, we propose to take up the privatization of two Public Sector Banks and one General Insurance company in the year 2021-22,” she had said.
Later in one of the post Budget interactions, the Finance Minister had said the government will work with the Reserve Bank for execution of the bank privatisation plan announced in the Union Budget 2021-22.
“The details are being worked out. I have made the announcement but we are working together with the RBI,” she had said, when asked about the proposal.
The government last year consolidated 10 public sector banks into four and as a result the total number of PSBs came down to 12 from 27 in March 2017.
As per the amalgamation plan, United Bank of India and Oriental Bank of Commerce were merged with Punjab National Bank, making the proposed entity the second largest PSB.
Syndicate Bank was merged with Canara Bank, while Allahabad Bank was subsumed in Indian Bank. Andhra Bank and Corporation Bank were amalgamated with Union Bank of India.
In a first three-way merger, Bank of Baroda merged Vijaya Bank and Dena Bank with itself in 2019. SBI had merged five of its associate banks – State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore and State Bank of Hyderabad- and also Bharatiya Mahila Bank effective April 2017.”
Petrol at Rs 99.87 in Rajasthan; LPG, ATF prices up
Petrol prices approach the century mark.
PTI reports: “Petrol price on Tuesday soared to Rs 99.87 per litre in Rajasthan – the highest level India has ever seen – as fuel prices were hiked for the eighth day in a row.
Petrol price was raised by 30 paise per litre and diesel by 35 paise, according to a price notification of state-owned fuel retailers.
Simultaneously, the oil firms hiked cooking gas (LPG) price by Rs 50 per cylinder and that of jet fuel (ATF) by 3.6 per cent.
LPG now comes for Rs 769 per 14.2-kg cylinder in the national capital.
The increase in petrol and diesel priced pushed retail rates, which differ from state to state depending on the incidence of local sales tax or VAT and freight charges, to their highest level.
In Delhi, petrol now comes for Rs 89.29 per litre and diesel for Rs 79.70.
Rates are higher in states that levy higher VAT.
In Mumbai, petrol price rose to Rs 95.75 a litre and diesel was priced at Rs 86.72.
Rajasthan, which levies the highest VAT on fuel in the country, had the highest petrol and diesel prices. In Sriganganagar town of the state, petrol soared to Rs 99.87 and diesel jumped to Rs 91.86 per litre.
While branded/premium or additive mixed petrol is already over Rs 100-mark at some places in three states of Maharashtra, Madhya Pradesh and Rajasthan, the Rs 99.87 a litre price of regular petrol is the highest that the country has ever seen.
This is despite the Rajasthan government late last month cutting VAT on petrol and diesel by 2 per cent. VAT on petrol at 36 per cent plus Rs 1.5 per litre road cess is still the highest in the country. On diesel, the state levies 26 per cent and Rs 1.75 per litre road cess.
Branded petrol at Sriganganagar was priced at Rs 102.65 a litre and similar grade diesel at Rs 95.52.
Branded petrol is priced at Rs 92.12 per litre in Delhi and same grade diesel at Rs 82.99.
The oil firms raised aviation turbine fuel (ATF) price by Rs 1,942.5 per kilolitre, or 3.6 per cent, to Rs 55,737.91 per kl in the national capital.
While petrol and diesel prices are revised on a daily basis, LPG and ATF rates are revised on 1st and 16th of every month.
In eight straight days, prices have gone up by Rs 2.34 per litre for petrol and Rs 2.57 for diesel.
The relentless hike in prices has been criticised by the opposition parties including Congress that has demanded an immediate cut in taxes to ease the burden on the common man.
Oil Minister Dharmendra Pradhan last week had told Parliament that the government is not considering a reduction in excise duty to cool rates from their record highs.
Central and state taxes make up for 60 per cent of the retail selling price of petrol and over 54 per cent of diesel.
The union government levies Rs 32.90 per litre of excise duty on petrol and Rs Rs 31.80 a litre on diesel.
Retail petrol rates have risen by Rs 19.7 per litre since mid-March 2020 after the government raised taxes by a record margin to mop up gains arising from fall in international oil prices. Diesel rates have gone up by Rs 17.41.”
SAT stays SEBI’s order banning Kishore Biyani, other Future promoters from markets
The Securities Appellate Tribunal (SAT) has stayed the order passed by market regulator SEBI, that had put a one-year ban on Future Retail Chairperson Kishore Biyani and some other promoters from the securities market.
SAT has also directed the Future Group promoters to deposit a sum of ₹11 crore as an interim measure.
“In a hearing held on February 15, 2021, the Securities Appellate Tribunal has stayed the effect and operation of SEBI’s order accusing the promoters of the Future Group of insider trading in the context of purchases of Future Retail shares made in March 2017,” Future Corporate Resources Private Limited (FCRPL) said in a statement.
The case will now come up on April 12, 2021 before SAT for the next hearing.
Earlier on February 3, the Securities and Exchange Board of India (SEBI) had barred Mr. Kishore Biyani and certain other promoters of Future Retail Ltd. from the securities market for one year for indulging in insider trading in the shares of the company.
All JLR cars to be fully electric by 2030; Jaguar all electric by 2025
Jaguar Land Rover’s car range will be fully electric by 2030 as the carmaker joins a global race to develop zero-emission models to get ahead of looming bans on sales of new fossil-fuel vehicles.
JLR, owned by India’s Tata Motors, said on Monday the Jaguar brand will lead the way with a fully electric model range built on a brand-new electric platform by 2025.
Known for its iconic, high-performance E-Type model in the 1960s and 1970s, Jaguar faces the challenge of many other carmakers – making the transition to electric vehicles while retaining the feeling and power of a luxury combustion engine model.
Land Rover will launch six pure electric models in the next five years with the first one coming in 2024, JLR said.
Bank credit grows 5.93%, deposits 11.06%
Bank credit grew 5.93% to ₹107.05 lakh crore, while deposits rose 11.06% to ₹147.98 lakh crore in the fortnight ended January 29, RBI data showed.
In the fortnight ended January 31, 2020, bank credit stood at ₹101.05 lakh crore and deposits at ₹133.24 lakh crore.
In the previous fortnight ended January 15, growth in bank credit was 6.36%, while deposits rose 11.41%.
Govt. to set up Digital Intelligence Unit to deal with telecom frauds
Amid rising instances of financial frauds and unsolicited messages, the Telecom Ministry on Monday said it would set up a nodal agency, ‘Digital Intelligence Unit’ (DIU), for speedy investigation and resolution of such cases.
This was announced after a high-level meeting, chaired by Telecom Minister Ravi Shankar Prasad, held to discuss ways to make digital transactions more secure and reliable.
“The main function of DIU will be to coordinate with various LEAs [law enforcement agencies], financial institutions and telecom service providers in investigating any fraudulent activity involving telecom resources. At License Service Area level, Telecom Analytics for Fraud Management and Consumer Protection system will also be created,” an official release said.
Rupee rises 5 paise to 72.63 against US dollar in early trade
A decent start to the day for the rupee against the US dollar.
PTI reports: “The rupee inched up 5 paise to 72.63 against the US dollar in opening trade on Tuesday amid a firm trend in the domestic equity market and subdued American currency.
At the interbank forex market, the domestic unit opened at 72.64 against the US dollar and inched higher to 72.63 against the greenback, registering a rise of 5 paise over its previous close.
On Monday, the rupee had settled at 72.68 against the American currency.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.22 per cent to 90.27.
“The local currency could be buoyed by upbeat risk appetite in the markets amid FPI flows into the domestic markets and subdued dollar,” Reliance Securities said in a research note.
Moreover, Asian currencies are also trading strong this morning and could lift sentiments in the domestic markets. However, the Reserve Bank’s presence could cap gains for the domestic unit, the note added.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 206.28 points higher at 52,360.41, and the broader NSE Nifty advanced 76.30 points to 15,391.00.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,234.15 crore on Monday, according to exchange data.
Brent crude futures, the global oil benchmark, advanced 0.57 per cent to USD 63.66 per barrel.”
Exports surge 6.2%, imports rise 2%
India recorded a 6.2% surge in exports in January 2021, marking the second month in a row that outbound trade recorded positive growth after the COVID-19 pandemic and global lockdowns dampened global trade through most of 2020.
Imports also grew for the second successive month in January, rising 2% as per quick estimates released by the Ministry of Industry and Commerce on Monday.
Non-oil and non-gold imports recorded a sharper growth of 7.5%.
“Exports in January 2021 were $27.45 billion, as compared to $25.85 billion in January 2020, exhibiting a positive growth of 6.16%,” the Ministry said.
Indian shares at record high as financials gain
Yet another record high for the stock indices.
PTI reports: “Indian shares hit a record high on Tuesday, powered by gains in financial stocks as optimism about a swift global economic recovery boosted investor sentiment globally.
The NSE Nifty 50 index was up 0.69% at 15,420.45 by 0400 GMT, while the S&P BSE Sensex was 0.61% higher at 52,473.10. Both indexes hit record highs.
Kotak Mahindra Bank and HDFC Bank were the top boosts to the Nifty 50.
Separately, the Nifty PSU bank index that tracks state-run lenders jumped 2.82% after Reuters reported that the government had shortlisted four banks for potential privatisation.
Adding to optimism about a revival in growth was a S&P report that said India’s economy was on track for a recovery in 2021/22.
Other Asian stock markets were also trading higher, putting world equities on course to extend their bull run for a 12th consecutive session.”
Incoming WTO head warns ‘vaccine nationalism’ could slow pandemic recovery
The World Trade Organization’s incoming chief on Monday warned against “vaccine nationalism’ that would slow progress in ending the COVID-19 pandemic and could erode economic growth for all countries – rich and poor.
Ms. Okonjo-Iweala told Reuters her top priority was to ensure the WTO does more to address the pandemic, saying members should accelerate efforts to lift export restrictions slowing trade in needed medicines and supplies.
The former Nigerian finance minister and senior World Bank executive was appointed on Monday in a consensus process and starts her new job on March 1.
“The WTO can contribute so much more to helping stop the pandemic,” Ms. Okonjo-Iweala said in an interview at her home in a suburb of Washington.