Business News at 05:30 pm on 7th February 2023

After Budget 2023 failed to provide any relief to homebuyers, all eyes of home loan borrowers are on the outcome of the ongoing RBI MPC Meeting to be announced tomorrow. Increasing the pain of home loan borrowers, the Reserve Bank of India has raised the repo rate by 225 points since last year. The rising repo rate has directly impacted home loan borrowers, whose EMIs have shot up amid inflation and job uncertainties. Most experts are of the view that either the RBI will hike the repo rate by at least 25 basis points or maintain the status quo. The current repo rate in 2023 stands at 6.25%. SBI Research believes that the RBI will pause rate hikes in its February Policy. Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser at SBI writes in ‘Prelude to MPC Meeting’ report, quote, “In the current rate cycle, rate actions, both hikes and cuts, have been largely synchronized. We find evidence that synchronized rate actions have resulted in increased market volatility and financial stability in both the period post global financial crisis and the current regime,” unquote.

Next to Industry, Adani Ports on Tuesday reported consolidated net profit at Rs 1,315 crore, down 16% on-year as opposed to the expectation of a 25% growth for the quarter ended 31 December 2022. The company’s net revenue for the quarter also failed to street estimates. Revenue for the Dec quarter came in at Rs 4,786 crore, up 17.5% on-year from Rs 4,071 crore reported in the same quarter a year ago. The Q3 earnings come amid Adani group-Hindenburg Research row, which has wiped off $120 billion or 50% of the combined market capitalisation of Adani group companies. Adani Ports shares recovered as much as 26% from its lows despite a downgrade by S&P Global Ratings to negative from stable. Adani Ports was expected to report 24-25% on-year growth in net profit for the quarter ended December 2022. Brokerages expected Adani Ports to report around 30% on-year rise in revenue. EBITDA was expected to rise 24-28% on-year, and EBIT margin seen at 60-63% for the quarter. According to analysts, subdued container volume was expected. The quarterly numbers were expected to see the impact of lower volume and higher operating companies.

Speaking of Economy, S&P Global Ratings said core inflation in India has been declining sequentially, and an elevated 6.25 per cent policy rate limits the need for further rate hikes. The Reserve Bank has increased the short-term lending rate by 225 basis points since May last year to contain inflation, mostly driven by external factors, especially global supply chain disruption, following the Russia-Ukraine war outbreak. The policy rate now stands at 6.25 per cent. The RBI‘s rate-setting panel – Monetary Policy Committee – will decide on the interest rate on Wednesday. S&P said in a report said quote, “In India, core inflation has been elevated for longer; however, it eased sequentially in the second half of 2022. An already elevated 6.25 per cent policy rate limits the need for further increases,” unquote. The RBI has been tasked to ensure that retail inflation remains at 4 per cent with a margin of 2 per cent. However, external factors have led retail inflation to remain above the upper tolerance limit for 11 months in a row. In November 2022, the retail inflation came below the 6 per cent level and declined further in December at 5.72 per cent.

Let us have talk on technology, Google has announced the launch of its AI technology Bard which is being positioned as a rival to OpenAI’s popular language model, ChatGPT-3. Google CEO Sundar Pichai, in an official blog post, calls Bard a “conversational AI service” that can give high-quality responses, simplify complex topics, and more. Bard is currently available to trusted testers with plans to make it more widely available to the public in the coming weeks. Pichai says, quote, “Bard can be an outlet for creativity, and a launchpad for curiosity, helping you to explain new discoveries from NASA’s James Webb Space Telescope to a 9-year-old, or learn more about the best strikers in football right now, and then get drills to build your skills,” unquote. The full range of Bard’s capabilities is yet to be determined, but it appears the chatbot will be similar to OpenAI’s ChatGPT.

Lastly, Domestic equity indices ended Tuesday’s session in the red. The Bombay Stock Exchange Sensex fell 220.86 points or 0.37% to 60,286.04 and NSE Nifty 50 dipped 43.10 pts or 0.24% to 17,721.50. The top gainers on the Nifty 50 were Adani Enterprises, Dr Reddy, and Adani Ports while the losers were Tata Steel, Hindalco and ITC.