The benchmark stock indices opened the day on a positive note, with financial stocks leading the morning rally.
Join us as we follow the top business news through the day.
Equity inflows at record high
Sensex tumbles 531 points; energy, IT stocks play spoilsport
Morning gains didn’t help the stock indices.
PTI reports: “The BSE benchmark Sensex dived nearly 531 points to close at 48,348 on Monday, prolonging its losing streak to the third straight session, weighed down by massive selling particularly in energy and IT stocks.
After swinging nearly 1,000 points during the session, the BSE benchmark settled with a loss of 530.95 points or 1.09 per cent at 48,347.59.
The 30-share index opened over 375 points higher and hit the day’s high of 49,263.15 before succumbing to selling pressure that took the index to the session’s lowest point at 48,274.92.
Likewise, the NSE gauge Nifty plunged 133 points or 0.93 per cent to end the session at 14,238.90.
On the Sensex chart, Reliance Industries fell 5.36 per cent, followed by IndusInd Bank, HCL Tech, Asian Paints, UltraTech Cement and PowerGrid – dropping as much as 4.72 per cent.
Of the Sensex constituents, 21 closed in the red and only 9 in the green.
Among the gainers were Axis Bank, Sun Pharma, Bajaj Auto, Bajaj FinServ, HDFC Bank and Dr Reddy’s.
Analysts are of the view that markets may remain volatile in this holiday-shortened week amid monthly derivatives expiry, quarterly earnings and the upcoming Union Budget.
Indian equity markets will remain closed on Tuesday for the Republic Day.
Asian shares closed higher on Monday.
On the forex front, the rupee ended 3 paise higher at 72.94 against the US dollar.
Meanwhile, Brent crude, the global oil benchmark, was trading 0.56 per cent higher at USD 55.69 per barrel on Monday.”
‘Wages must be paid’: In southern India, age-old custom banned as slavery
Bonded labor forced to an end in a certain Indian village.
Reuters reports: “Indumati Shivaraj’s routine has been the same for more than a decade – at dawn she walks to her “master’s” house, mucks out the cattle shed, cleans the tools and sweeps the yard. Four hours later, she walks home.
Besides a cup of tea each day, Shivaraj, 45, gets about 3,000 Indian rupees ($40) a year and a few sacks of grains for her labour.
She is among thousands of Dalits – considered India’s lowest caste in an ancient social hierarchy – who work for little or no pay in the homes of upper-caste families in Karnataka state under a custom called “bitti chakri” that was recently outlawed.
November’s ban on the long-standing tradition by the government of the southern state came after years of campaigning by anti-slavery groups for bitti chakri to be recognised as bonded labour.
“It’s a rare acknowledgement of the fact that such forms of bonded labour still exist in the country,” said Kiran Kamal Prasad, founder of the Jeevika charity that led the fight against bitti chakri.
India outlawed bonded labour – or debt bondage – in 1975, but it continues to be the most prevalent form of slavery, with people trapped into working without pay in fields, brick kilns and mills to pay off family debts.
Under the abolition of bonded labour law, the offence is punishable with imprisonment for up to three years and a fine.
In bitti chakri, there is not normally a debt to repay – rather a customary obligation to fulfil. Payment is usually in kind, and the expectation of free labour often passes through generations – resulting in decades of slavery, Prasad said.
“This form of slavery is not like debt bondage, where people are forced to work to pay off loans. Here there is no loan, just an understanding that a Dalit person is obligated to work for a landlord, practically for free,” he said.
At the anti-bonded labour department in Karnataka’s state government, director Revanappa K said it was an “age-old practice where landlords used lower-caste people to work and gave them foodgrains in return”.
“In today’s age, we’re recognising it as a form of bonded labour,” he told the Thomson Reuters Foundation.
“Fair wages must be paid, not just grains,” he said.
Jeevika found more than 3,000 Dalit families in 15 Karnataka districts were “working for free”, while a further 10,000 were doing unpaid labour during weddings, funerals and other ceremonies, according to a 2019 report by the charity.
They were given some maize, wheat or pulses in return and, on rare occasions, a token sum of money.
Social worker Indumathi Sagar, 44, regularly visits villages in the Bidar district of Karnataka, stopping at Dalit homes to ask them about where they work and how much they earn.
“There are so, so many still trapped in bitti chakri, too scared to complain against the landlords who live down their street,” Sagar said by phone from her home in Bidar.
“They know they are being exploited, they understand their rights but it is very difficult for them to break free from the tradition.”
In other parts of the country, similar forms of caste-based “customary” labour have faced closer scrutiny in recent years.
In the eastern state of Odisha, Baghambar Pattanaik led a campaign to ensure barbers and workers hired to wash clothes did not have to work for free for upper-caste people – leading the state to include the custom in anti-slavery laws.
As a result of that, more than 2,000 barbers and washermen have been given release certificates by the government since the ban was implemented a decade ago, he said, adding that more remained to be done.
“Implementation of the law has always been a challenge, particularly in cases of free labour, where the usual parameters of bonded labour like confinement and abuse don’t always exist,” Pattanaik said.
“Besides banning, governments have to seriously undertake surveys to identify these people, who are too scared to speak up because of years of oppression they have faced. Otherwise, it will remain a change on paper.”
Shivaraj, who works as a low-paid casual labourer in addition to her daily unpaid toil at her “master’s” house, said she hoped the ban on bitti chakri might give her a way out – allowing the family to earn enough to pay off their debts.
“We have accepted it as our reality but hope that with the new ban, maybe things will change in the future. If we get proper wages, we will not be forced to take loans again.””
Vietnam offers significant opportunities for Indian generic drugmakers: Fitch Solutions
A surprising new market opportunity for Indian drugmakers.
PTI reports: “Indian generic drugmakers have immense potential for growth in Vietnam which currently meets bulk of the domestic demand by importing medicines, Fitch Solutions Country Risk and Industry Research said in a report on Monday.
Vietnam’s domestic pharmaceutical industry is currently able to meet just 53 per cent of the country’s demand, representing significant opportunities for Indian drugmakers as the country is among the leading global producers of generic medicines, the report noted.
“There is an enormous potential for Vietnam to purchase generic medicines from India, but the former is actively trying to get Indian pharmaceutical companies to manufacture in Vietnam instead of importing,” it added.
India is Vietnam’s third largest supplier of pharmaceutical products, with an export turnover of USD 198 million in the first nine months of 2020.
In addition to finished products, the country also provides raw pharmaceutical materials, and generic medicines for the Vietnamese market.
The medicines and raw materials imported from India are reasonably priced and meet the diverse needs of Vietnamese, especially those living in remote areas, Fitch Solutions said.
Vietnamese pharmaceutical firms want to cooperate and call for investment from foreign companies, including those from India to attract capital, technology and high quality human resources, it added.
“Therefore, there is room for cooperation between Vietnamese and Indian businesses in the field,” it added.
Fitch noted that Vietnam’s generic drug market will post robust growth rates over the coming years, driven by the government’s encouragement of the predominant generic-based local industry, as well as the expansion of healthcare services.
Domestic medicine production will remain firmly within the generic drug sector given the lack of scientific expertise for innovative drug development, but primarily due to the significantly higher demand for generic drugs in the country as a whole, it added.
In addition, while the development of healthcare services in Vietnam will increase the ability for patients to access higher quality medicines, affordability levels remain low and as such opportunities for patented drugmakers will remain severely restricted, the report said.
“Generic drugs will continue to account for the majority of prescription drug sales with a value estimated at VND 66trn (USD 2.9 billion) in 2020. We expect this to grow to VND 171trn (USD 6.7 billion) by 2030,” Fitch said.
This is a ten-year compound annual growth rate of 10 per cent in local currency terms and 9 per cent in US dollar terms, it added.”
Once again, TCS becomes the most valued domestic firm
Tata Consultancy Services on January 25 surpassed Reliance Industries Ltd. to become the country’s most valued firm by market capitalisation.
During the afternoon trade, the market valuation of Tata Consultancy Services (TCS) was at ₹12,45,341.44 crore while that of Reliance Industries Ltd. (RIL) was at ₹12,42,593.78 crore on the BSE.
Shares of RIL declined 4.84% to ₹1,950.30 on the BSE after its earnings failed to cheer investors.
In contrast, TCS gained 1.26% to touch its one-year high of ₹3,345.25.
Oxfam urges radical economic rejig for post-COVID world
Anti-poverty campaigner Oxfam on January 25 warned that the fallout of the coronavirus pandemic will lead to the biggest increase in global inequality on record unless governments radically rejig their economies.
In a report geared to inform discussions at the World Economic Forum’s online panels of political and business leaders this week, Oxfam said the richest 1,000 people have already managed to recoup the losses they recorded in the early days of the pandemic because of the bounce back in stock markets.
By contrast, Oxfam said it could take more than a decade for the world’s poorest to recover their losses.
“Rigged economies are funnelling wealth to a rich elite who are riding out the pandemic in luxury, while those on the frontline of the pandemic — shop assistants, healthcare workers, and market vendors — are struggling to pay the bills and put food on the table,” said Gabriela Bucher, executive director of Oxfam International.
Reliance Industries shares decline 5%
RIL pulls down the indices.
PTI reports: “Shares of Reliance Industries Ltd on Monday declined almost 5 per cent after the company reported a drop in earnings from oil-to-chemical business on yearly basis.
The index heavyweight stock opened the day on a positive note but failed to hold the ground and dipped 4.69 per cent to Rs 1,953.40 on the BSE.
On the NSE, it declined 4.97 per cent to Rs 1,952.55.
Reliance Industries Ltd on Friday reported a better-than-expected 12 per cent rise in December quarter net profit on improving oil-to-chemical business, strong continued momentum in retail and steady telecom unit Jio.
Consolidated net profit in October-December stood at Rs 13,101 crore, compared to Rs 11,640 crore net earning in the same period a year back, the company said in a statement.
While oil-to-chemical or O2C business improved quarter-on-quarter, it was lower than year-ago earnings but this was more than made good by a spurt in consumer-facing businesses of telecom and retail which now contribute to 51 per cent of earnings as compared to 37 per cent a year back.
About 56 per cent of the pre-tax profit (EBITDA) of Rs 8,483 comes from Jio and Reliance Retail.
Net income increase was further aided by a 20 per cent year-on-year decline in finance expenses due to cash coming in the digital unit, Jio Platforms and Reliance Retail from Google/financial investors respectively. Revenue was down 18.6 per cent at Rs 137,829 crore.
Jio, the telecom arm, posted a 15.5 per cent quarter-on-quarter rise in net profit to Rs 3,489 crore as it added over 25 million subscribers and per user income rose to Rs 151 per month. It had 410.8 million subscribers at the end of December.”
Jayati Ghosh named by U.N. to high-level advisory board on economic, social affairs
Indian development economist Jayati Ghosh is among 20 prominent personalities appointed by the United Nations to a high-level advisory board that will provide recommendations for the U.N. Secretary-General to respond to the current and future socio-economic challenges in the post-COVID-19 world.
Ms. Ghosh, 65, is a professor of economics at University of Massachusetts Amherst. She has taught economics at Jawaharlal Nehru University for nearly 35 years and has authored several books.
The U.N. Department of Economic and Social Affairs (UNDESA) announced that the 20 “prominent personalities, globally renowned for their intellectual leadership in economic and social fields, will form the second United Nations High-level Advisory Board (HLAB) on Economic and Social Affairs.” Over the next two years, the board will strengthen the United Nations thought leadership on sustainable development and reinforce its impact on policies at every level — from global to local, it said.
Asset quality stress touches ‘peak’, GNPAs may rise after SC order, says Yes Bank
Yes Bank has reached the “peak” of asset quality stress after reporting heightened challenges in the December quarter earnings, even though there can be a jump in the gross non-performing assets (GNPA) ratio in the March quarter, a top official has said.
The GNPA ratio may shoot up to touch 20% of the overall assets once the Supreme Court order on bad asset recognition comes in, the official said.
In the results released over the weekend, the bank reported a GNPA ratio of 15.36%, but admitted that if one were to include the standstill NPAs (ones which were not recognised due to SC order) and the restructured assets, the overall stressed assets would be higher.
“The stress we saw is a peak and there are many positives on the asset quality like collections being improving, cheque bounce rates coming down to industry averages and the recoveries being high,” its managing director and chief executive Prashant Kumar told PTI.
Tata in talks to launch Moderna COVID-19 vaccine in India – ET
Vaccine availability in India could get a boost soon.
Reuters reports: “Tata Medical & Diagnostics is said to have started initial discussions with Moderna Inc for a partnership to launch its COVID-19 vaccine in India, the Economic Times reported on Monday.
Tata could team up with the India’s Council of Scientific & Industrial Research (CSIR) to carry out clinical trials of Moderna’s vaccine candidate in India, the report https://bit.ly/2Yd8E2B added, citing officials familiar with the matter.
The Indian government this month gave emergency-use approval to a COVID-19 vaccine developed by Bharat Biotech International Ltd and state-run Indian Council of Medical Research, and another licensed from Oxford University and AstraZeneca PLC that is being manufactured by the Serum Institute of India.
Moderna did not respond to Reuters’ request for a comment outside business hours, while Tata Medical & Diagnostics did not immediately respond.”
Rupee rises 4 paise to 72.93 against US dollar in early trade
The rupee has opened with marginal gains against the dollar.
PTI reports: “The rupee edged 4 paise higher at 72.93 against the US dollar in opening trade on Monday, tracking positive domestic equities and weak American currency.
Traders said the local unit is trading in a narrow range against the US dollar ahead of the US Federal Reserve meeting this week.
At the interbank forex market, the domestic unit opened at 72.95 against the US dollar and inched higher to 72.93 against the greenback, registering a rise of just 4 paise over its previous close.
On Friday, the rupee had settled at 72.97 against the American currency.
“We are likely to see some positioning adjustments across domestic equities, bonds and Rupee in the holiday shortened week, leading up to the budget on 1st February. The economic survey would be tabled a day prior,” Abhishek Goenka, Founder and CEO, IFA Global said.
“On the global front, the focus this week will be on the US Federal Reserve monetary policy due late Wednesday evening,” Goenka said.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.13 per cent to 90.12.
“Asian currencies were mixed against the greenback ahead of the Fed meeting this week,” Reliance Securities said in a research note.
The euro and the sterling have started marginally weaker against the US Dollar this Monday morning in Asian trade. The Japanese yen was marginally weak against the US Dollar in morning trade.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 34.21 points higher at 48,912.75, and the broader NSE Nifty was up 10.05 points at 14,381.95.
Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 635.69 crore on a net basis on Friday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 0.07 per cent to USD 55.37 per barrel.”
Union Budget 2021 | Govt may announce formulation of policy for toys sector
The government may in the Budget next week announce formulation of a dedicated policy for the toys sector to boost domestic manufacturing, sources said.
They said the policy will help in creating a strong ecosystem for the industry in the country and also attract startups.
The Commerce And Industry Ministry is already taking steps to promote domestic manufacturing of toys. It has came out with a quality control order for the sector and had also increased import duty last year on toys.
Quality control order is one of the ways to stop flow of cheap sub-standard toys into the domestic market.
A source said that the country has low share in the international toys industry and India’s exports account for less than 0.5% of global demand, so there are immense opportunities in this segment.
The other areas which could be considered for the sector include promotion of research and development and design centres for toys.
Sensex zooms over 340 points in early trade; financial stocks lead rally
A good start to the week for the stock indices.
PTI reports: “The BSE benchmark Sensex surged 346.55 points in the opening session on Monday, propelled by a rally in financial stocks.
The 30-share index was trading 346.55 points or 0.71 per cent higher at 49,225.09 in opening trade.
Likewise, the NSE barometer Nifty rose 88.40 points or 0.62 per cent to 14,460.30 in early deals.
On the Sensex chart, UltraTech Cement, Bajaj Finance, HDFC, Axis Bank, Bajaj FinServ, HDFC Bank and Mahindra and Mahindra were the prominent gainers.
On the other hand, RIL, PowerGrid, Asian Paints, ONGC and ITC were among the major laggards.
On Friday, the BSE Sensex had tumbled 746.22 points or 1.50 per cent to finish at 48,878.54, posting its largest single-session drop in a month; while, the NSE Nifty had slumped 218.45 points or 1.5 per cent to 14,371.90. However, a day before the Sensex had breached the historic 50,000-level for the first time ever.
Foreign institutional investors offloaded Indian equities worth Rs 635.69 crore on a net basis on Friday.
Analysts are of the view that markets may remain volatile in this holiday-shortened week amid monthly derivatives expiry, quarterly earnings and the upcoming Union Budget.
Indian equity markets would remain closed on Tuesday for the Republic Day holiday.
Asian shares were trading higher in afternoon trade on Monday.
Meanwhile, Brent crude, the global oil benchmark, was trading 0.16 per cent higher at USD 55.30 per barrel on Monday.”
Why SIPs are brain-friendly
Emotions are good for your overall well-being, but those can sometimes get in the way of your financial decision making.
For instance, the possibility of a negative future outcome from an investment could prompt you to not take a decision today even though that investment may be required to achieve your life goal. It is, therefore, important that you distance yourself from your investment decisions.
Here, we discuss how systematic investment plans (SIPs) help moderate emotions and improve your chances of achieving life goals. The possibility of regret in the future because of a bad outcome prompts many to postpone taking a decision today. Suppose you want to accumulate money to make down payment for a house 7 years hence. You know that investing in bank deposits is not enough; lower post-tax returns would mean you have to save more to achieve your goal. But investing in equity could lead to losses.