Business News at 05:30 pm on 25th May 2023

The White House and congressional Republicans on Thursday are expected to resume negotiations on a deal to raise the government’s $31.4 trillion debt ceiling, with as little as a week remaining until a potential economically catastrophic default. Democratic President Joe Biden and House of Representatives Speaker Kevin McCarthy are at odds over spending, taxes and work requirements for anti-poverty programs. But both sides say they believe they can find common ground after hours-long discussions by their negotiating teams on Wednesday that they characterized as productive. Time is running short. The Treasury Department says the United States could run out of money to pay its bills as soon as June 1, seven days from now if the debt ceiling is not raised. A US default could upend global financial markets and push the United States into recession. Ratings agency Fitch said on Wednesday it had put the United States’ “AAA” credit rating on negative watch.

Moving on. Nearly six percent of outsourced contract workers lost jobs in India’s information technology sector in the January-March period compared to the previous quarter following the impact of the global slowdown and Russia-Ukraine war, a recruitment body said. The Indian Staffing Federation, a body of 120 recruitment agencies which provided about 60,000 outsourced workers, said nearly 6% or about 3,600 of these workers lost jobs in the March quarter. India’s IT sector employed nearly 5.1 million workers in the year ending March 2022, according to government estimates, and companies have fired thousands of contract employees while holding on to hiring. “The drop in new employment generation within the IT flexi staffing sector mirrored the global slowdown in IT hiring,” said Lohit Bhatia, president of the Indian Staffing Federation. However, the hiring in the manufacturing, logistics, and retail sectors remained strong, helped by domestic consumer demand, he said.

Now, a major update from overseas. The German economy shrank unexpectedly in the first three months of this year, marking the second quarter of contraction that is one definition of recession. Data released Thursday by the Federal Statistical Office shows Germany’s gross domestic product, or GDP, declined by 0.3 per cent in the period from January to March. This follows a drop of 0.5 per cent in Europe’s biggest economy during the last quarter of 2022. Two consecutive quarters of contraction is a common definition of recession, though economists on the euro area business cycle dating committee use a broader set of data, including employment figures. Germany is one of the 20 countries that use the euro currency.

Meanwhile, a latest analysis says billionaire Mukesh Ambani’s Reliance is the best-positioned player in the USD 150-billion Indian e-commerce market ahead of Amazon and Walmart due to it owning the potent combination of largest retail store network, dominant telecom operations and strong digital media. In a new report, Bernstein Research said India is evolving into a three-player market with Amazon, Walmart and Reliance. The conventional retail business model starts out either offline such as Walmart or online such as Amazon. Reliance has 400,000-plus people in its retail business. It has, since January this year, hired about 69,000 new employees to replenish turnaround. The turnaround in the company is lower than the 30-40 per cent annual churn seen in organised retail in the country.

In other news, the Internet and Mobile Association of India on Thursday announced that Harsh Jain, Co-founder and CEO of Dream Sports has been elected the Chairman of the industry body, following governing council election. Jain replaces Sanjay Gupta, Vice President and Country Manager, Google India, IAMAI said in a statement. Rajesh Magow, Co-Founder and Group CEO, MakeMyTrip, and Satyan Ganjwani, Vice Chairman, Times Internet, have been elected the Vice Chairman and the Treasurer of the association replacing Shivnath Thukral and Harshil Mathur respectively.

And lastly, here’s what happened on Dalal Street today. Domestic indices ended the monthly F&O expiry session in green. The NSE Nifty 50 ended near day’s high, rising 35.75 points or 0.20% to 18,321.15 and BSE Sensex rose 98.84 points or 0.16% to 61,872.62. In sectoral indices, Bank Nifty ended flat at 43,681.40, Nifty FMCG rose 0.61%, Nifty Metal climbed 0.30%, Nifty Realty jumped 1.12% and Nifty PSU Bank fell 0.45%. The top gainers on Nifty 50 were Bajaj Auto, Adani Enterprises, Bharti Airtel, ITC and Divis Lab while the losers were Wipro, Tata Motors, IndusInd Bank, UPL and Hindalco. Additionally, global markets were stuck in US debt ceiling limbo on Thursday, while Europe largely shrugged off news that its biggest economy, Germany, had sagged into recession and that all the wrangling in the United States could cost it an AAA credit rating.