Business News at 10:00 am on 16th May, 2024

Let’s begin with the major update, India’s unemployment rate in urban areas fell sharply to 6.6% in FY24 from 7.2% in the previous year, helped by the smart growth in the economy. India’s economy is estimated to have grown at 7.6% last fiscal, as per the National Statistical Office’s (NSO) second advance estimates, up from 7% in FY23. Data from the Periodic Labour Force Survey (PLFS) released on Wednesday showed that the urban unemployment rate fell to 6.7% in Q4FY24 from 6.8% in Q4FY23, although it rose sequentially from 6.5% in the December 2023 quarter. The labour force participation rate (LFPR) improved to 39.5% in Q4 from 38.1% in the year-ago quarter, while the worker population ratio (WPR) went up to 36.9% from 35.6%.

Moving on, Frustrated over the delay in the transfer of three Boeing 777 aircraft operated by long-grounded Jet Airways, Malta-based Challenge Group is considering walking away from the deal. The company also said it would want the $5.6 million deposited by it to be returned with interest. Challenge Group is the parent firm of Malta-based Ace Aviation. Two years after the company signed the deal with the monitoring committee of Jet Airways to take possession of the three aircraft based in Mumbai, there has been no headway. This is despite orders from three courts, including the Supreme Court, to hand over the possession of the planes to the Challenge Group. The JKC consortium is the successful applicant for the bankrupt Jet Airways.

In other news, A new study by Tata Consultancy Services highlights how artificial intelligence (AI) is revolutionising industries by enhancing efficiency, driving innovation and enabling data-driven decision-making. Despite these advancements, the study also reveals a notable reluctance among senior executives to fully embrace generative AI (GenAI). A TCS report, titled TCS AI for Business Study, reveals that over eight out of ten (86%) senior business leaders have already deployed AI to enhance existing revenue streams or create new ones. This widespread adoption is driven by the need to improve operational efficiency, customer experiences and make data-driven decisions. The study indicates that around 69% of businesses are more focused on using AI to spur innovation and increase revenue than on productivity improvement and cost optimisation.

Meanwhile, Negotiators for the India-UK free trade agreement have made substantial progress and the work is on to resolve pending issues as early as possible, a senior official said Wednesday. Officials from both sides had met last month in London and chapterwise textual negotiations are nearly closed and schedules on goods and services are in an advanced stage of negotiations, he said. Work is in progress on resolving pending issues, he added. The FTA has 26 chapters or policy areas and the schedules in FTA deal with tariffs which each side will impose on goods from other countries under the agreement. So far India and Uk have held 13 rounds of negotiations on the FTA and 14th round which started in January is in progress.

Up next, The core CPI (Consumer Price Index) inflation may have come in at 3.2% in April, but going forward it may only increase as prices of several commodities, including crude oil and metals have started to rise, say economists. A likelihood of an uptick in core inflation is likely to push the rate cuts possibility to Q3 of the current fiscal year, they say. Core inflation–which has stayed at 3.2% for two consecutive months–is expected to average around 3.5-3.7% in H1 FY25, and 4.5% in H2, according to economists. The Reserve Bank of India aims to keep the headline retail inflation rate at 4% on a durable basis. According to its projection, CPI inflation is expected to average 4.5% in FY25.

Moving ahead, SBI, the largest lender in the country, on Wednesday hiked the interest rates for retail and bulk fixed deposits by 0.25% to 0.75%, signalling that the fight among banks to mobilise deposits is still not over. The bank has increased rates across various tenures, including FDs maturing within 46 days to 179 days, 180 days to 210 days and 211 days to less than 1 year. After the revision, these deposits are offering 5.5% to 7% interest to the depositors. The lender’s move comes after SBI chairman Dinesh Khara last week said that the bank will step up efforts to mobilise more deposits. Presently, the highest interest rate is available for a tenure of 2 years to less than 3 years.

Lastly, let’s take a look at stocks to watch today. GIFT Nifty traded up by 108.50 points or 0.49% at 22,368 indicating a positive opening for domestic indices NSE Nifty 50 and BSE Sensex on Thursday. Previously, on Wednesday, the NSE Nifty 50 ended down by 17.30 or 0.08% to settle at 22,200.55 while the BSE dropped 117.58 points or 0.16% to 72,987.03. Here’s a look at the key stocks to watch in trade – Titagarh Rail, Berger Paints, PFC, Jindal Stainless, NCC, Dixon Technologies, NLC. Vinod Nair, Head of Research, Geojit Financial Services said the positive results from the capital goods sector and robust growth outlook gained investors’ attention and led the segment to outperform.