This is a roundup of the day’s top stories in brief.
1. Home Sales In India At A Decadal Low
Housing sales in India’s top eight cities fell to the lowest in a decade in the first half of 2020 as the world's biggest lockdown to contain the Covid-19 outbreak decimated business activity.
- Housing sales declined around 54% year-on year to 59,538 units during the first half, according to Knight Frank India.
- New residential product launches, too, fell nearly 46% over a year ago to 60,489 units during the period, the property consultancy said in its half-yearly report that studied Mumbai, Delhi-National Capital Region, Bengaluru, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad.
- Housing sales tumbled 84% year-on-year to 9,632 units in the second quarter of the calendar year as the lockdown stalled all activities in the real estate industry, it said.
- The number of new launches slumped 90% over the year-ago period to 5,584 units in the second quarter.
The residential real estate sector, which was already going through a rough patch, has got severely hit by the current crisis.
2. ICRA’s Grim Forecast For The Indian Economy
ICRA Ltd. has sharply cut its forecast for the Indian economy in FY21, citing localised lockdowns and rising Covid-19 cases. Its forecast is now the most pessimistic among major institutional forecasters.
- The rating agency now expects FY21 real GDP to contract by 9.5%, a sharp downward revision of its earlier forecast of a 5% contraction.
- The climbing Covid-19 infections have resulted in a spate of localised lockdowns in some states and cities, arresting the nascent recovery that had set in during May-June 2020, it said in a statement on Thursday.
The unabated rise in Covid-19 infections in the unlock phase and re-imposition of localised lockdowns in several states, appear to have interrupted this recovery.Aditi Nayar, Principal Economist, ICRA
The agency said the economic impact would also be more uneven, as different regions move in and out of lockdowns.
3. Nifty’s Last Hour Recovery
Indian equity markets ended higher for the second day, ending the weekly options expiry session on a strong note, led by a last hour recovery in banking and pharma stocks.
- The S&P BSE Sensex ended 1.16% higher at 36,471 while the NSE Nifty 50 index ended at 1.15% higher at 10,739.
- Gains were mostly led by Infosys - which ended 9.5% higher for its biggest single-day gain in four months. BPCL, Cipla also contributed to the recovery, ending 7% and 5.5% higher respectively.
- Among the sectoral indices, the Nifty Bank recovered nearly 600 points from the day's low to end with gains of 1.2%, courtesy a reversal in private lenders like Axis Bank, Kotak Mahindra Bank and IndusInd Bank.
- Broader markets underperformed in today's trade. The Midcap index ended 0.5% higher while the Smallcap index ended 0.1% lower.
Follow the day’s trading action here.
U.S stocks fell as investors parsed mixed economic data and watched earnings roll in.
- The S&P 500 opened lower after two consecutive days of gains, with Bank of America Corp. falling after profits slid.
- The Nasdaq 100 led declines among the main American equity benchmarks, with Twitter Inc. falling after accounts of some prominent political and business leaders were hacked.
- Oil retreated from its highest close in four months after the OPEC+ alliance confirmed it would start tapering output cuts from next month.
Get your fix of global markets update here.
4. Economy Down, Stock Market Up. Why?
How is it possible that the stock market is behaving like it is festival time when the entire nation is in mourning over the economy?
- There is doom and gloom all around. But not in the stock markets.
- The expectation among economists is that India’s economy will shrink and GDP growth will be negative for this year, an event not seen in 50 years.
- But in June, India’s stock markets were among the best-performing markets in the world. The BSE Sensex was up nearly 8%.
Praveen Chakravarty mines months of market data to find out what’s happening.
5. What’s Slowing The $12-Billion Power Sector Lifeline
Two months after India announced a Rs 90,000 crore ($12 billion) loan program to aid power distributors punished by the pandemic, only a fraction has been utilised as many state applications have yet to meet the lending requirements, according to people familiar with the matter.
- The loans, announced by Finance Minister Nirmala Sitharaman, are among a raft of measures aimed at reviving an economy that’s forecast to contract this fiscal year for the first time in more than four decades.
- Meanwhile, India’s electricity sector, already burdened by perennial losses and unpaid bills, is now seeking to recover lost cash flow after efforts to tame the coronavirus pandemic caused a sharp drop in power demand.
The loan scheme has progressed slower than expected, mainly because of procedural delays in states and stringent conditions.
6. India Sets Up ‘Air Bubbles’ With France, U.S.
India has established individual bilateral ‘air bubbles’ with France and U.S. that will allow airlines of each country to operate international flights, Civil Aviation Minister Hardeep Singh Puri said on Thursday, adding that similar arrangement with Germany will soon be reached upon.
- Air France will be operating 28 flights between Delhi, Mumbai, Bengaluru and Paris from July 18 to Aug. 1, the minister said at a press conference.
- American carrier United Airlines will be flying 18 flights between India and the U.S. from July 17 to July 31.
- The minister said India is in talks to establish a bubble with the U.K. under which there would be two flights per day between Delhi and London.
Till the pre-Covid situation is established again, air bubbles are the way forward for international aviation.
7. Big Freeze In The Diamond Market
The coronavirus froze up the diamond market so dramatically that the two biggest producers hardly sold any gems at all in the last three months, their combined sales plunging 94% from a year earlier.
- De Beers and Russian rival Alrosa PJSC both reported second-quarter sales figures Thursday, at a total of $130 million in rough diamonds between them.
- A year ago, the two companies sold $2.1 billion.
- The pandemic has devastated the diamond world. With jewellery stores closed, cutters and polishers stuck at home and global travel at a standstill, the entire diamond industry essentially came to a halt.
- That’s piled pressure on the biggest miners who have moved to protect the market by refusing to cut prices.
The outlook for the second half remains uncertain.
8. One Area Where India Will Find It Hard To Cut Ties With China
India looks to eliminate its dependence on Chinese imports following a deadly border skirmish. Yet, its nascent electric vehicle industry needs China, at least in the short term.
- India’s electric vehicle market is localised only to the extent of 40-50%, according to Society of Manufacturers of Electric Vehicles, as it barely comprises 1% of the overall automobile industry.
- “China has a significant play for India’s EV story and they’re strong in battery and in electronics,” Hetal Gandhi, director at the research firm Crisil, told BloombergQuint.
- Apart from cells, battery packs and electric motors, Indian EV makers also import plastic spare parts and headlights.
Can India’s EV industry cut its umbilical cord with China?
9. Can Ambani Take On Tencent, Huawei And Xiaomi?
With the $28 billion he’s raised working from home, India’s richest man wants to step into the breach created by the technology cold war between America and China. The two Silicon Valley tech giants that gave him a third of the money will help put him there.
It’s an audacious plan, writes Andy Mukherjee.
- By building its own 5G technology, Ambani is set to challenge Huawei—a company that many countries are reluctant to deal with as they accuse it of being an instrument of Chinese state.
- The planned assault on handset makers like Xiaomi is clearer with Google and Jio combining to build cheap smartphones for India.
- Through Facebook's Whatsapp, Ambani will look to emulate Tencent's all-in-one ecosystem.
But is Jio ready to be India’s answer to everything?
10. Covid-19: Largest Spike Takes India Closer To 10-Lakh Cases
Total Covid-19 confirmed cases in India rose past 9.66 lakh as authorities reported the largest ever spike in fresh cases.
- Authorities reported over 32,000 cases in just 24 hours, taking the total tally to 9,68,876, according to the Health Ministry’s 8 a.m. update on July 16.
- Of these, more than 6.1 lakh have been cured or discharged, while over 3.3 lakh are active cases.
- Stressing the need for increased Covid-19 testing, Tata group chief N Chandrasekaran has said the pandemic will not be controlled unless tests can be conducted "at scale".
- Bill Gates, too, weighed in saying that India's pharmaceutical industry is capable of producing Covid-19 vaccines for the whole world.
Track news and developments around the outbreak in India here.
Globally, total cases have topped 13.4 million with over 5,80,500 deaths.
- California’s surge continued, with the largest U.S. state reporting near-record increases in cases and deaths.
- The University of Oxford’s vaccine trial will report “positive news,” a U.K. journalist said, boosting AstraZeneca Plc shares.
- British Prime Minister Boris Johnson said the U.K. is striving to avoid a second spike of infections.
Follow the global spread of the virus here.
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