Share Market highlights: Sensex ends 463 points down, Nifty below 11,000; Zee, SBI plunge

After opening lower, the headline indices Sensex and Nifty extended losses in the late morning trade on Thursday, tracking global markets sell-off. The Sensex is down 615 points to 36,865.50 while the Nifty is trading below the 11,000-mark. Zee Entertainment shares slumped by more than 6.3% to Rs 336 after the firm announced that after Oppenheimer Development fund agreed to pick up 11 per cent of promoter stake in the firm for Rs 4,224 crore. A look at LIVE Sensex heatmap.

A new direct tax code is on the brink of being introduced and the government calls it an amendment which will not only reduce the tax but will also reduce the burden of compliance on the assesses. The task force, which was constituted by the finance ministry in Nov 2017, is at its last stage to submit the final report by 16 August 2019. The new direct tax code is aimed to redefine fundamental concepts such as income and the scope of taxation to make it more progressive for the assesses falling in the middle-income tax slabs of 5 per cent and 20 per cent.

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Amazon.com Inc is in exploratory talks with Reliance Industries Ltd’s retail unit to buy an up to 26% stake in India’s biggest brick-and-mortar retailer, the Economic Times (ET) reported on Thursday. The conglomerate, controlled by India’s richest man Mukesh Ambani, was previously in talks with China’s Alibaba to sell a stake in Reliance Retail, but a deal could not be sealed due to differences in valuation, a person familiar with the matter told Reuters. Having an online partner would help strengthen Reliance’s retail business, the person added, declining to be identified as the matter was private. The Amazon-Reliance talks may not lead to a deal, according to the ET report. Reuters could not independently verify the talks.

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The ED on Thursday said it has attached assets worth over Rs 480 crore of REI Agro Ltd, a prominent basmati rice processing company, in connection with an alleged multi-crore bank loan fraud case. The central agency issued a provisional attachment order under the Prevention of Money Laundering Act (PMLA) against the firm, it said in a statement. The Enforcement Directorate (ED), in 2016, had registered a money laundering case against the company, which claims to be the world’s largest basmati rice processing firm. The alleged bank fraud is pegged at Rs 3,871.71 crore.

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Mukesh Ambani’s Reliance Retail and Kishore Biyani’s Future Group are the only two Indian companies in Asia Pacific’s top 100 Retailers list, a report said. US-based Walmart and Jeff Bezos’ Amazon also feature in the India segment of Euromonitor International’s 2019 list of top 100 retailers in Asia-Pacific. Future Group leads Reliance Retail by eight ranks on the list. The Asian Pacific list, however, is topped by Jack Ma’s Alibaba Group Holding Limited, followed by JD.com inc, Seven and I Holdings Co Ltd, AEON Group. Amazon is ranked fifth on the list.

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The sentiment of Indian equity market can revamp when the domestic economy improves by the second half of the fiscal year subject to the development of monsoon, ease in oil prices and start of post-election business activities. At the same time, global market also needs to improve, led by reduction in interest rates & quantitative easing measures as indicated by key world central banks.  In India, the RBI has lowered its policy interest rate by 25 bps to 5.75% in its June policy meet and changed its monetary policy stance to "accommodative" from "neutral".

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HDFC has announced a cut of 10 basis points in its Retail Prime Lending Rate (RPLR) on housing loans effective August 1,2019. The flexible or Adjustable Rate Home Loan (ARHL) is linked to HDFC’s RPLR and, therefore, an impact will be seen in the home loan EMIs. Unlike banks, where the home loans are linked to the bank’s Marginal Cost of Funds based Lending Rate (MCLR), in the case of housing finance companies such as HDFC, the interest rate is linked to an institution’s internal benchmark taking its own cost of funds into account.

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Indian stocks just suffered their worst July in 17 years, and if history is to be believed, there is little hope that August will be much better. The S&P BSE Sensex dropped 4.9% in the month that ended Wednesday, hurt by disappointment with the country’s new budget, muted corporate earnings and the ongoing credit crunch. The benchmark index has performed better in August than July in only five years since 2002, data compiled by Bloomberg show. “We are going into August with low expectations, rather no expectation at all,” said Rajiv Singh, chief executive officer of Mumbai-based Karvy Stock Broking Ltd. “Market should pick up the threads from here and hope it won’t get worse than this.”

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Unenthusiastic market sentiments have lead to the country's leading automobile manufacturer, Maruti Suzuki, observe a substantial decline in its sales for the month of July 2019. The Indo-Japanese automaker sold a total of 1,09,264 units during last month. In comparison, during the same month last year, the sales for the carmaker stood at 1,64,369 units. This translates into an overall decline of 33.5%. In the domestic market, Maruti Suzuki sold a total of 98,210 units last month. However, in July 2018, the company sold 1,54,150 units. This accounts for a decrease of 36.3%.

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India has set a target for itself of becoming a US $ 5 Trillion economy in some years from now. Within the realm of India’s domestic developmental imperatives; poverty alleviation and employment generation are of paramount importance, so is the infrastructure development. Addressing these challenges with a clear-cut strategy can help us achieve the GDP target. Let us see how. In a closed economy, GDP is driven by consumption and investment, both of public and private sectors. In an open economy, both exports and imports contribute to GDP growth. For achieving the US $ 5 Trillion target by 2024 a growth rate of 11 to 12 percent per annum would be required. For the sake of brevity, let us focus just on domestic infrastructure development.

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After opening lower, the headline indices Sensex and Nifty extended losses in the late morning trade on Thursday, tracking global markets sell-off. The Sensex is down 400 points to 37,065, while the Nifty is trading below the 11,000-mark. Zee Entertainment shares slumped by more than 6.3% to Rs 336 after the firm announced that after Oppenheimer Development fund agreed to pick up 11 per cent of promoter stake in the firm for Rs 4,224 crore. A look at LIVE Sensex heatmap.

After opening lower, the headline indices Sensex and Nifty extended losses in the late morning trade on Thursday, tracking global cues. The Sensex is down 400 points to 37,065, while the Nifty is trading below the 11,000-mark. Zee Entertainment shares slumped by more than 6.3% to Rs 336 after the firm announced that after Oppenheimer Development fund agreed to pick up 11 per cent of promoter stake in the firm for Rs 4,224 crore.  A look at LIVE Sensex heatmap.

After billionaire Subhash Chandra-promoted Zee Enterprises announced a deal with Oppenheimer Developing Markets Fund to sell 11% stake for Rs 4,224 crore, analysts note that while the deal allays near-term concerns, more stake sale is likely to to pare Essel promoters’ Rs 11,000 crore debt. Notably, Invesco Oppenheimer has agreed to buy an 11% stake in Zee Entertainment for Rs 4, 224 crore (about one-third of the total group-level share pledge), implying a cost of Rs 400 per share, according to brokerage firm Emkay Securities. Following the deal, Oppenheimer’s stake will rise to 18.3% in Zee Enterprises.

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The headline indices Sensex and Nifty opened lower on Thursday morning, tracking global cues. The Sensex is down 220 points to 37,259, while the Nifty is trading near the 11,050-mark. Zee Entertainment shares slumped by more than 2.2% to Rs 352.20 after the firm announced that after Oppenheimer Development fund agreed to pick up 11 per cent of promoter stake in the firm for Rs 4,224 crore. A look at live Sensex heatmap.

The Centre’s net tax receipts (NTR) in Q1 were just 14.7% of the FY20 target (BE), with annual growth of a mere 6%. This is even as annual NTR growth required to meet the BE is a daunting 29.5%. It may be noted that despite Q1 NTR last year being 16% of the respective BE (with a y-o-y growth of 34%), the year ended with an over 11% shortfall under this head, necessitating a savage spending cut to avoid a big fiscal slippage. 

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Walmart-owned Flipkart on Wednesday launched Flipkart Samarth, an initiative that aims to help India’s artisans and weavers leverage the reach of the country’s burgeoning e-commerce sector. Flipkart, with its rich base of over 150 million users, will give the artisan community access to national market and boost employment. Flipkart Group CEO Kalyan Krishnamurthy talks to FE’s Asmita Dey on the sidelines of the event.

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SV Ranganath was on Wednesday appointed interim chairman of Coffee Day Enterprises (CDEL), following confirmation of the demise of founder VG Siddhartha. Nitin Bagmane, chairman of Tanglin, took charge as interim chief operating officer. The company informed the stock exchanges that it had taken cognizance of the statements in the letter purportedly written by Siddhartha, relating to financial transactions which he said the senior management, auditors and the board were unaware of.

Zee Enterprises MD & CEO Punit Goenka tells FE’s Malini Bhupta that if the need arises he is open to selling some more stake, but does not want a repeat of Black Friday. Excerpts: What is the road ahead after today’s announcement?

We will get into aggressive negotiations for our non-media assets, which would include the financial services portfolio, solar assets and roads assets. We have non-binding offers for our solar and roads assets. The roads deal can be wrapped up quickly so that we can meet the timeline of September 30, 2019. We had agreed with the lenders to stick to this timeline.

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India’s billionaires are shrinking in numbers as per a Business Standard report. It noted that the number of billionaire-promoters has reduced to a three-year low at 71, from an all-time high of 90 in 2018. The report highlights that 24 Indian billionaire promoters have exited the ‘billionaire club’ as of now, resulting in a combined loss of Rs 1 lakh crore in their net worth. The exiting billionaires include names like Anil Ambani, Motilal Oswal, and Rana Kapoor. 

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A recent article opposes government intervention in the telecom sector reeling under a debt of over Rs 7 trillion. It argues that the root cause of the debt is incompetently run private companies and their greedy promoters, and, therefore, there is no case for the government to review the penalties of over Rs 100 billion facing them. Nor is there any reason to lower the reserve price of Rs 4.92 billion per MHz for the forthcoming auction of the 5G spectrum. Unfortunately, such an approach is short-sighted. It will prevent vital reform, hurt most stakeholders and won’t fix rogue behaviour either.

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Amazon India has announced its annual four-day Freedom Day Sale from 8 August to 11 August 2019. The e-commerce platform will offer deals across various categories such as smartphones, electronics, fashion, large appliances, TVs, daily essentials, among others, the Indian subsidiary of Jeff Bezos’ company said. Kicking off from the midnight of August 08, the sale will be open to the Prime members first who can access the deals starting 12 noon on 7 August 2019. In a bid to promote local artists, the company will also have products from small sellers, artisans and weavers. However, they will be available on hefty discount of 70%.  

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With the core sector growth falling in the monht of June, the Reserve Bank of India (RBI) may cut rates in the upcoming bi-monthly monetary policy, the analysts said. The growth in eight core industries fell to 0.2 per cent largely on account of shrinkage in the oil-related sectors and cement production, the government data released on Wednesday said. In June 2018, the eight core industries namely coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity expanded by 7.8 per cent.  In the April-June quarter, the eight sectors grew by 3.5 per cent as against 5.5 per cent in the corresponding period of the last year.

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With the Essel Group initiating the process of divesting its key assets on order to repay all the lenders by September this year, mutual funds with large exposure to the group may heave a sigh of relief. The development comes as the foreign fund house Invesco Oppenheimer Developing Markets Fund on Wednesday agreed to buy up to 11 per cent of promoter’s stake in Zee Entertainment Enterprises Ltd (ZEEL) for Rs 4,224 crore. It is expected to bring good news for mutual funds that have the biggest exposure to Essel Group at Rs 7,570 crore including Aditya Birla Sun Life Mutual Fund, HDFC Mutual Fund, and Franklin Templeton Mutual Fund, among others. 

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