Business News at 09:30 am on 9th October 2023

Let’s begin. Corporate earnings for the September quarter are expected to grow at a fast clip, driven by good performances by oil marketing companies, automobile manufacturers, banks, capital goods and cement makers, and metals producers. The numbers should be seen against the backdrop of a weak base of the year-ago period. Moreover, the results will appear a lot more subdued if the OMCs are excluded because they reported a loss in the base quarter. Kotak Institutional Equities estimates profit growth for the Sensex set of companies at 19% year-on-year but just 2% quarter-on-quarter. For the Nifty 50, the brokerage estimates profits will grow at 23% year-on-year and remain flat on a sequential basis.

Meanwhile, in a crackdown on illegal use of the Internet, the government has asked telecom operators and Internet service providers to ensure traceability of people who use Wi-Fi hotspots, especially at places like hostels, reading rooms, study centres, libraries and staying facilities, etc. The directive comes after the department of telecommunications noticed that majority of study centres/hostel owners, etc, are using their personal broadband connections for commercial purposes. The data download at such facilities is huge and amounts to terabytes per month, DoT said in a letter to telcos and ISPs last week.

Moving on. Even as intense fighting is underway between Israeli soldiers and Hamas fighters in the streets of southern Israel, its impact on India’s foreign trade may not be material, experts said. They added that it’s important to monitor how the situation unfolds. They said the worry is that a prolonged conflict could affect sentiments when the world trade is already projected to be flat. For merchandise exports of India, the war may lead to higher insurance premiums and shipping costs. In the short term, some volatility in oil prices is expected and there could be some market jitters. If the conflict draws in other countries of the region, the impact could be as big as the oil crisis of the 1970s or closure of key trade routes.

On to property matters. Residential property sales are expected to touch a decadal high this year, but unsold inventory in the September quarter continue to remain almost at last year’s levels. This is mainly because housing launches are also happening in a big way, say analysts. In residential real estate, unsold stock refers to the properties that are in various stages of construction and not delivered to buyers. More than 328,000 units were launched in the top seven cities in the first nine months of this year, according to Anarock Property Consultants. In comparison, about 265,000 units were launched in the first nine months of 2022. Currently, quarters taken to sell, or QTS, stands at 6.5 quarters compared to 7.5 levels a year ago.

In the world of economy, trade negotiators from the UK are in India and on Monday both sides will sit together to sew up any remaining loose ends in the Free Trade Agreement the two countries aim to sign, a senior official said. The UK team’s visit follows commerce secretary Sunil Barthwal’s visit to London last week to push the negotiations further. Both sides have so far concluded 13 rounds of talks. The official said another team from the UK is already in India for further talks on the Bilateral Investment Treaty, to be inked along with the FTA. The official added that everything is at closure level. Last week FE had reported the FTA would be signed by the end of this month.

Next up, market. Prices of crude oil can be trading in the green, again, today as a result of the Israel-Hamas conflict that broke out on Saturday. However, the uptick in the prices will not be sustained, analysts say, as the country is neither a major oil producing country nor a major consumer. An analyst who did not wished to be named said, quote, “Any geopolitical tension in the world can result in an added speculative risk premium to the prices,” unquote. Speculative risk is the price uncertainty and the possibility for losses in an investment. Further, if there is any disruption in the shipping routes near the region, oil prices can further rise on the back of longer routes for the delivery, analysts believe.

Lastly, let’s look at the stocks in focus. These include TCS, TVS Motor, IDFC First Bank, and Biocon among others. TCS has announced that the Board of Directors will meet on October 11, 2023, to consider buying back the company’s equity shares. On the other hand, Adani Energy Solutions has acquired 100% equity shares of Sangod Transmission Service from Rajasthan Rajya Vidyut Prasaran Nigam in a manner consistent with the Share Purchase Agreement and other applicable consents. The proposal was approved by the committee of the Board of Directors of the Company at its meeting held on October 6.