Share Market Highlights: Core sector growth contracts 5.2% in September; coal, oil see major decline

Ever since the Narendra Modi government reduced the tax burden on corporates in September, there was speculation about a similar cut in personal income tax rates. A newspaper report on Wednesday quoted unnamed government officials denying any such move, dashing the hopes of India’s middle-class taxpayers. Is India’s tax regime biased against salary earners? In September, finance minister Nirmala Sitharaman had announced a cut in the corporate tax rate to 22%. The effective corporate tax rate for Indian companies is 25.17% including all cess and surcharges. The tax rate for manufacturing companies set up after October 1, 2019, is just 15%. The government will lose Rs 1.45 lakh crore in tax revenues because of these cuts.

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Strongly opposing a bailout of telecom companies at taxpayers’ expense, Reliance Jio on Thursday wrote to Telecom Minister Ravi Shankar Prasad saying firms that have been ordered by the Supreme Court to pay past statutory dues have “sufficient” financial capacity to clear their liabilities. It also slammed the Cellular Operators Association of India (COAI) for writing ex-parte to the government on the financial distress in the sector, saying the body was “blackmailing” to “extract relief from the government” after all legal recourse had expired.

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'Yes Bank has rallied 171% from the low of 29 which was made on the 1st of  October month, it was the last day of selling of pledged shares. It rallied about 27% in today's trading session after news that it receives interest from strong global players for equity infusion which is a major requirement for the bank.  Technically 79-81 is a critical resistance zone which is also near the previous QIP price of 87, therefore, it is difficult to see further upside from here in the near term and it will post its Q2 results tomorrow which may cause some selling pressure. In the short term, investors should avoid any long position at the current level while a correction in the 60-55 zone will be a better opportunity to take a risk as a long term bet,' Santosh Meena, Sr. Analyst, TradingBells said.

Amid the ongoing slowdown, former RBI Governor Raghuram Rajan said India needs a new generation of reforms and mere tinkering of rates won’t work. The Indian government has the required political strength and power to undertake reforms, he added in an interview with CNBC. Raghuram Rajan suggested the Narendra Modi-led government to prioritise the cleaning up of Non-Banking Finance Companies and to recapitalise them. He also said that the process of cleaning the NBFCs should be accelerated to improve the country’s financial system.

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There is no one out there to invest in highway projects, except the government. Increased risk aversion among a pool of investors that has anyway been limited, lenders’ chariness, issues related to last-mile land acquisition and cash flow problems of operational projects have all resulted in a drying up of new hybrid annuity model (HAM) projects. Not a single highway project has been awarded under HAM this fiscal, official sources said, sharply down from its 40% share in awards in FY19 (see chart).

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IT major Cognizant on Thursday posted 4.1 per cent increase in net profit to USD 497 million for September 2019 quarter, and said it will slash up to 7,000 jobs in the next few months as part of a cost reduction programme. The US-based company, which has a significant portion of its workforce based in India, had posted a net profit of USD 477 million in the year-ago period. It has also raised its annual revenue growth outlook to 4.6-4.9 per cent for 2019. Its revenue grew 4.2 per cent to USD 4.25 billion in the third quarter, compared to USD 4.07 billion in the year-ago period, Cognizant said in a statement.

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India is placed among the top nations with the most conducive environment for financial inclusion in terms of allowing non-banks to issue e-money, proportionate customer due diligence and effective consumer protection, a report said on Thursday. According to The Economist Intelligence Unit’s 2019 Global Microscope on Financial Inclusion report, the overall environment for financial inclusion has improved globally with India, Colombia, Peru, Uruguay and Mexico having the most favourable conditions for inclusive finance.

A week after SoftBank unveiled $9.5 billion rescue package for co-working company WeWork witnessing among the most dramatic business events in recent history, the global startup fund is perhaps sticking to its formula of investing tonnes of capital in startups to acquire biggest market share and turning them into large technology businesses without much stress on profitability. “Of course we provide the growth capital but that money is available from many other sources. So we are providing the total stimulus for them (entrepreneurs) to grow much bigger (and) quicker,” SoftBank Chairman and CEO Masayoshi Son said at the Future Investment Initiative forum in Riyadh on Wednesday.

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In Global Pension Index 2019, India has been grouped among countries that have desirable pension systems but with major weaknesses that need to be addressed. The efficacy and sustainability of such systems would be in doubt if improvements are not made. About India’s pension system, the Melbourne Mercer Global Pension Index 2019 notes: “India’s retirement income system comprises an earnings-related employee pension scheme, a defined contribution employee provident fund, and supplementary employer managed pension schemes that are largely defined contribution in nature. Government schemes have been launched as part of universal social security program aimed at benefitting the unorganised sector. The National Pension System is gradually gaining popularity.”

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YES Bank share price surged 38 per cent after the private lender announced that it has received a binding offer from a global investor. The stock touched an intraday high of Rs 78.70 from the previous close after the announcement of an offer from a global investor for an investment of $ 1.2 billion through fresh issuance of equity shares. The bank also said it was in advanced talks with other investors. “The  Bank had informed the exchanges that the Bank had received strong interest from multiple foreign as well as domestic private equity and strategic investors for the capital raise and remains firmly on course to raising growth capital subject to necessary approvals,” YES Bank said in an exchange filing on Thursday.

Also read: YES Bank share price up 38% after announcement of binding offer worth $1.2 billion from global investor

YES Bank on Thursday said that it has received a binding offer from a global investor for an investment of $ 1.2 billion in the Bank through fresh issuance of equity shares, subject to Regulatory approvals, as well as Bank's Board and Shareholders approvals.

"The recent announcement by the government to cut corporate tax rate has definitely lifted the domestic sentiments. Further, global markets have been supportive with dovish monetary policy from US Fed and positive trade developments between US-China. However, sustenance of this rally would be possible if the earning picks up meaningfully. Till now for Q2FY20, the earnings outcome has been on the positive side but it is mainly due to muted expectations. Nonetheless, we believe with recent government announcements on various fronts and lower interest rates would augur well for the economy as well as corporates. Therefore, we maintain our positive view and expect gradual recovery from H2FY20. On the sector front, we expect consumption driven sectors like FMCG, Auto, Banking, Consumer Durables to outperform and are positive on stocks like M&M, Maruti, Marico, Havells, Subros and Voltas,"  Ajit Mishra, VP- Research, Religare Broking told Financial Express Online. 

The Aspirational Districts Programme (ADP) is one of the largest experiments on outcomes-focused governance in the world. Spread across 112 of India’s socio-economically challenged districts, the ADP is Niti Aayog’s flagship initiative to improve health, nutrition, education, and economic outcomes. Initial evidence suggests that the ADP has already contributed towards improving the lakhs of lives. If successful, the ADP can present a new template for governance. It is therefore critical to try and get it right.

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With BSE Sensex hitting record high of 40,345 and Nifty topping 11,900, investors seek a strategy to go ahead in such a rally. Even as the surge continues for the fifth straight trading day, stock markets are expected to see profit booking anytime soon, said analysts. So, the investors should plan accordingly on how to go ahead.  “Going ahead, I expect some profit-taking at current levels anytime soon. With Sep and Oct, both series added, NIFTY is close to over 1000 points up. Any relentless rally with few of the short term indicators mildly overbought may not be healthy,” Milan Vaishnav, CMT, MSTA told Financial Express Online

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One of the Pratt and Whitney engines of an IndiGo A320neo plane that was heading from Kolkata to Pune on Wednesday evening stalled mid-air, forcing the pilot to return to the Kolkata airport, making it the fourth such incident involving PW engines at the low-cost carrier in a week, a source said. On three consecutive days from October 24 to 26, IndiGo had three in-flight PW engine shutdowns, compelling the aviation regulator DGCA to visit the airline’s premises on Monday to review the maintenance and safety data.

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For years India’s state-run companies coughed up hefty dividends when the government needed cash. Now the treasury is being forced to return the favor. Prime Minister Narendra Modi will spend about $9.5 billion to resuscitate telecom firms Bharat Sanchar Nigam Ltd. and Mahanagar Telephone Nigam Ltd., Telecom Minister Ravi Shankar Prasad said at a briefing last week. The government is already pumping 300 billion rupees of tax payers’ money into state-run Air India Ltd., while fighter-jet maker Hindustan Aeronautics Ltd. has been borrowing to pay employees this year after parting with its cash reserves as dividends to the government.

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Gold tends to shine bright during the second half of the year as demand picks up. It is estimated that Diwali accounts for approximately one-fifth of annual gold purchases in India—more than any other time of the year. Jewelers and gold coin dealers in India frequently see a spike of 20%-30% in sales leading up to the festival. India is the second-largest consumer of gold after China, although they are close in size, with each accounting for approximately 30% of net global imports of the yellow metal in 2017. Gold is the second-largest import in India after crude oil, illustrating how important the country is to the global gold market and likewise how important it is for Indian consumers to appreciate the global supply/demand dynamics of gold.

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Private sector lender Bandhan Bank raced past the crucial Rs 1 lakh crore market capitalisation, days after completing the merger with Gruh Finance. Bandhan Bank share price closed 1.5% lower at Rs 614.35 on BSE. Bandhan Bank is now the 6th biggest bank by market capitalisation. HDFC Bank (Rs 6.82 lakh crore), ICICI Bank (Rs 3.04 lakh crore), Kotak Mahindra Bank (Rs 3.01 lakh crore), State Bank of India (Rs 2.58 lakh crore), Axis Bank (Rs 2.10 lakh crore) are the top 5 banks by market cap. 

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Despite the pantomime optimism that government functionaries and the media have to display, it is becoming impossible to disguise the sense of gloom surrounding the Indian economy. All agencies, from the Economist Intelligence Unit to the IMF are downwardly revising growth figures; the RBI’s consumer confidence index is at a new low. There are learned debates about whether this slowdown is structural or cyclical. There are debates over demand-side or supply-side solutions. There is general global uncertainty: The global economy is slowing, the possibility of geopolitical and trade shocks is still high. But there is one obvious fact we are paying less attention to The pervasive loss of credibility in the Indian system.

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The real GDP growth of India in the December-ending quarter is expected to be the highest among G7 and BRICS nations. Even in the quarter that ended September, where most of the world’s biggest economies are expected to show weak results, only India and the UK are expected to post results that show an acceleration from the previous quarter, says a report by the Economist Intelligence Unit. The global economy is going through a slowdown and since the 2008 financial crisis, it is set to grow at its slowest pace this year. The International Monetary Fund has predicted global growth of just 3 per cent, down 0.2 percent from the previous forecast in July.

Ratan Tata, former chairman of the Tata Group, has joined photo and video sharing platform Instagram. Announcing his Instagram debut, he wrote, “I don’t know about breaking the internet, but I am so excited to join all of you on Instagram! After a long absence from public life, I look forward to exchanging stories and creating something special with such a diverse community”. The low-key philanthropist already has many fan-operated accounts and has already garnered over 2,500 followers. Many followers were quick to welcome him on board the Facebook-owned platform. 

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The Sensex surpassed its earlier high of 40,312 hit on June 4th. The new peak was created at 40,344.99. The 30-share Sensex soared to a fresh record high in the morning trade on Thursday, tracking favourable cues after US Fed rate cut propelled the S&P 500 to record highs yesterday. A look at LIVE Sensex heatmap.

While the Sensex soared to a fresh record high on Thursday mornimg, the broader Nifty 50 is about 200 points away from its all-time high of 12,103. The Nifty is trading at around 82 points higher at 11,925. The 30-share Sensex soared to a fresh record high in the morning trade on Thursday, tracking favourable cues after US Fed rate cut propelled the S&P 500 to record highs yesterday. The Sensex was soared more than 276 points to hit a new all-time high of 40,328.89. Infosys, SBI shares were the biggest gainers, jumping more than 4% each. 

The 30-share Sensex soared to a fresh record high in the morning trade on Thursday, tracking favourable cues after US Fed rate cut propelled the S&P 500 to record highs yesterday. The Sensex was soared more than 276 points to hit a new all-time high of 40,328.89. Infosys, SBI shares were the biggest gainers, jumping more than 4% each. A look at LIVE Sensex heatmap.

After showing some revival in the last couple of years, India’s agricultural exports are faltering again. Total farm exports during April-September, at $ 17.29 billion, stood 9.1% lower than the $ 19.02 billion for the same period of 2018-19. The worst hit has been raw cotton, with shipments in the first half of 2019-20 nearly 76% down over the levels of April-September 2018-19. Moreover, the value of exports, at $ 226.6 million, is below the imports of $ 990.6 million, which are up 136%. This is the first time since 2004-05 that the country has turned net importer of the natural fibre.

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After showing some revival in the last couple of years, India’s agricultural exports are faltering again. Total farm exports during April-September, at $ 17.29 billion, stood 9.1% lower than the $ 19.02 billion for the same period of 2018-19. The worst hit has been raw cotton, with shipments in the first half of 2019-20 nearly 76% down over the levels of April-September 2018-19. Moreover, the value of exports, at $ 226.6 million, is below the imports of $ 990.6 million, which are up 136%. This is the first time since 2004-05 that the country has turned net importer of the natural fibre.

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Alibaba Group Holding Ltd is eyeing a listing in Hong Kong as early as November to raise up to $15 billion, after political unrest put the move on ice earlier this year, people familiar with the matter said on Wednesday. Alibaba’s listing would boost Hong Kong’s status as a major capital markets hub. After topping global rankings in 2018 for funds raised through IPOs, the city’s bourse fell behind the New York Stock Exchange and Nasdaq this year amid months of anti-government protests that have roiled the Asian financial hub.

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The broader Nifty 50 topped the 11,900 mark for the first time since July 5th. The benchmark index has been on a gaining spree in Samvat 20176 which began post-Diwali on the back of favourable domestic and global cues. The Federal Reserve on Wednesday cut interest rates for the third time this year in a move to ensure the US economy weathers a global trade war without slipping into a recession, but signaled its rate-cut cycle might be at a pause. In lowering its policy rate by a quarter of a percentage point to a target range of between 1.50% and 1.75%, the U.S. central bank dropped a previous reference in its policy statement that it "will act as appropriate" to sustain the economic expansion - language that was considered a sign for future rate cuts. A look at top Nifty gainers. 

Alibaba Group Holding Ltd is eyeing a listing in Hong Kong as early as November to raise up to $15 billion, after political unrest put the move on ice earlier this year, people familiar with the matter said on Wednesday. Alibaba’s listing would boost Hong Kong’s status as a major capital markets hub. After topping global rankings in 2018 for funds raised through IPOs, the city’s bourse fell behind the New York Stock Exchange and Nasdaq this year amid months of anti-government protests that have roiled the Asian financial hub.

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The Sensex exteded gains on Thursday, tracking favourable cues after US Fed rate cut propelled the S&P 500 to record highs yesterday. The Sensex was up about 160 points to 40,211 while the Nifty was trading near the 11,900-mark. The Federal Reserve cut interest rates for the third time this year in a bid to ensure the US economy tackles the looming trade war with China, but signaled its rate-cut cycle might be at a pause. Bharti Airtel, Vodafone Idea shares were among major losers on Thursday morning after Reliance Jio’s letter to COAI. A look at LIVE Sensex heatmap.

Oil prices fell for a fourth day on Wednesday, extending losses after a surge in U.S. inventories surprised investors, overshadowing an interest rate cut by the Federal Reserve. Brent crude futures were down 6 cents at $60.55 a barrel by 0033 GMT, having fallen by 1.6% on Wednesday. U.S. West Texas Intermediate (WTI) crude futures were down by 16 cents, 0.3%, at $54.90 a barrel, after declining 0.9%. The Federal Reserve on Wednesday cut interest rates for a third time this year and signalled it plans no further cuts unless the economy takes a turn for the worse. 

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More than a year after the defaults at IL&FS, not too many Non Banking Financial Companies (NBFC) and Housing Finance Companies (HFCs) can be said to be in good health. With access to credit constrained, a couple of them have defaulted, and some remain vulnerable to a default. Given this, it is surprising that an asset quality review, much like it was done for banks by Reserve Bank of India (RBI) in the last quarter of 2015, has not been done for NBFCs. 

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Taking the Cellular Operators Association of India (COAI) head on for writing to telecom minister Ravi Shankar Prasad, late on Tuesday evening, urging his urgent intervention to avert a crisis in the telecom sector, Reliance Jio on Wednesday wrote a scathing letter to the director-general of the industry body. Lambasting the DG, Rajan Mathews, for the undue haste in issuing the letter without waiting for its view, Jio also said that the move was a serious breach of trust on COAI’s part.

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Dealmakers always know when to cut their losses. And, so it is with the self-proclaimed greatest dealmaker of them all: US President Donald Trump. Having promised a Grand Deal with China, the 13th round of bilateral trade negotiations ended on October 11 with barely a whimper, yielding a watered-down partial agreement: the “phase one” accord. This wasn’t supposed to happen. The Trump administration’s three-pronged negotiating strategy has long featured a major reduction in the bilateral trade deficit, a conflict-resolution framework to address problems ranging from alleged intellectual-property theft and forced technology transfer to services reforms and so-called non-tariff barriers, along with a tough enforcement mechanism.

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Gold prices edged higher on Thursday after the U.S. Federal Reserve cut interest rates as expected, even as the central bank dropped a previous reference in its statement that signalled future rate cuts. Spot gold rose 0.3% to $1,499.06 per ounce as of 0137 GMT. U.S. gold futures inched 0.3% higher to $1,501.40 per ounce. The U.S. central bank on Wednesday cut interest rates for the third time this year to help sustain U.S. growth despite a slowdown in other parts of the world, but signalled there would be no further reductions unless the economy takes a turn for the worse.

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GST: If you are a GST registered business then the lowest rate offered by your supplier may not be the best option for you if your supplier has a history of not depositing the GST tax to the government on time. Under the GST law, a supplier is required to file GST return in GSTR-1 form before the 11^th day of the next month, which will have the details of all outward supplies. This information is used by the buyers who will use that to avail input tax credit (ITC).

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