BQuick On Dec. 7: Top 10 Stories In 10 Minutes
1. Exit Polls: Close Fight In MP, Chhattisgarh
Polls in Rajasthan and Telangana marked the end of assembly elections in five states. The votes will be counted on Dec. 12, and the exit polls released today indicate a close fight in two of the three Hindi-heartland states and a clean sweep for the Congress Party in Rajasthan. Here's a detailed breakup:
- Two of five polls show Congress in the lead, while one shows BJP retaining power.
- Two polls predict neck and neck contest.
- Congress looks set to make a comeback in the state.
- Four exit polls show the party winning comfortably, while one poll predicted a close fight.
- Three of the five polls predict a fourth term for the BJP.
- The Ajit Jogi–Mayawati combine seems to have been a non starter.
- K Chandrashekar Rao's gambit of calling early elections seem to have paid off.
- The Congress-TDP alliance is seen falling well short in three of the four exit polls.
- The Mizo National Front is projected to beat the Congress Party.
2. CEA With A Banking Touch
India has named Krishnamurthy Subramanian, an associate professor at Indian School of Business and a banking expert, as the country’s next chief economic adviser.
- The Appointments Committee of Cabinet approved the proposal to appoint Subramanian for three years, according to a statement by the Department of Personnel and Training.
- He will succeed Arvind Subramanian, who stepped down in June 2018 after cutting short an extended term citing personal reasons.
- Subramanian comes to the CEA office with a strong understanding of the banking sector troubles being faced by India.
3. OPEC+ Deal Sends Crude Surging
Oil in London surged by as much as 5.4 percent as OPEC was said to agree on a larger-than-expected deal with its allies to reduce output.
- The producer alliance will collectively curb production by 1.2 million barrels a day, after the Organization of Petroleum Exporting Countries concluded a second day of meetings in Vienna on Friday, more than expected cuts of 1 million barrels a day that had been discussed earlier.
- Russia also agreed to join the proposals, a delegate said. OPEC failed to reach on agreement in its first round of meetings Thursday.
- The deal was reached after Iran was granted an exemption from curbing its output due to U.S. sanctions, which have already sharply reduced the nation’s oil shipments.
4. Indian Markets Rise, U.S. Stocks Fluctuate
Indian equity benchmarks snapped their three-day losing streak led by Kotak Mahindra Bank Ltd., Infosys Ltd., Reliance Industries Ltd. and the HDFC twins ahead of exit polls for state elections due later in the day.
- The S&P BSE Sensex Index rose 1 percent or 361 points to 35,673.
- The NSE Nifty 50 Index climbed 0.9 percent or 93 points to 10,694.
- Thirteen of 19 sector gauges compiled by the BSE ended higher led by the S&P BSE Bankex Index's 1.7 percent gain.
- On the flipside, the S&P BSE Utilities Index was top loser, down percent.
U.S. stocks edged higher, led by gains in energy related companies, and oil surged after OPEC ministers agreed on production curbs.
- Treasuries fluctuated after weaker-than-expected jobs data bolstered speculation the Federal Reserve may have room to slow tightening next year.
- The S&P 500 Index fluctuated between gains and losses in early trading as the data failed to address concern whether the economic growth may be slowing.
- The 10-year Treasury yield slipped as low as 2.86 percent and the dollar slid against major peers as investors assessed whether the report will bolster central-bank doves.
5. Biggest Fall In Equity Mutual Fund Inflows Since March
Inflows into equity mutual funds, including equity-linked savings schemes, fell the most in seven months due to increased market volatility, global trade war tensions and uncertainty over the upcoming state elections.
- Equity inflows fell by nearly 33 percent over the previous month to Rs 8,414 crore in November, according to data released by the Association of Mutual Funds in India.
- Overall across all schemes, the mutual fund industry witnessed a total inflow of Rs 1.42 lakh crore compared with Rs 35,529 crore in October.
- “Equity inflows have slowed down significantly. Systematic Investment Plan inflows for the month at close to Rs 8,000 crore have held up but new inflows have been slowing due to the weak market sentiment,” said Aashish Sommaiyaa, chief executive officer of Motilal Oswal AMC.
6. Investors Don’t Like HCL Tech’s $1.8 Billion Buy
HCL Technologies Ltd. was among the worst-performing stocks in Asia on Friday after the company said it was buying some of International Business Machines Corp.’s software assets for $1.8 billion.
- The shares tumbled as much as 7.7 percent in Mumbai, ranking them among the biggest decliners on the MSCI Asia Pacific Index.
- The slump is also the steepest since May on a day when the broader market is in the green.
- HCL is buying seven products, including Connections that enables streaming from social networks, document authorization, reporting expenses and reviewing emails.
- The planned purchase -- the biggest by an Indian software maker -- has had some investors questioning the price tag in relation to the assets’ return potential.
7. Buffett Deal Buzz Lifts Kotak Mahindra Bank
Shares of Uday Kotak-led Kotak Mahindra Bank Ltd. surged the most in over four years, after CNBC-TV18 reported, quoting unidentified people, that Warren Buffett’s Berkshire Hathaway Inc. is in talks to buy a 10 percent stake in the private sector lender.
- The deal may be valued between $4 billion and $6 billion, the report said.
- BloombergQuint could not independently verify the news.
- In a response to queries from the stock exchanges, Kotak Mahindra Bank said it was unaware of any plans by Berkshire Hathaway to buy a stake.
8. Tougher Days For India Inc. Ahead?
The Reserve Bank of India’s decision to tighten rules for working capital facilities offered by banks could mean tougher days for Indian corporates.
- Banks will be more judicious in sanctioning working capital limits to firms and would most likely provide these facilities at a higher cost. That's according to bankers and analysts who spoke to BloombergQuint.
- The change in the landscape for working capital facilities stems from guidelines released by the Reserve Bank of India on Wednesday.
- Until now, a firm which held a certain cash credit limit with a bank would withdraw money from that account whenever they wanted and repay it whenever they wanted. A rate of interest agreed upon between the lender and the borrower would be charged accordingly.
- While the new rules help banks, they put the onus on firms to manage their cash needs better.
9. ‘I Didn’t Hit Him, He Hit Me’
Former Fortis and Ranbaxy promoters Malvinder Mohan Singh and Shivinder Mohan Singh came to blows in the latest turn to their ongoing feud.
- In a video posted on social media, Malvinder Singh accused Shivinder of assaulting him as he showed off a bruise on his forearm.
- Later, Shivinder called his brother's accusations false, and painted a different picture.
- The incident happened on Wednesday as Shivinder was trying to disrupt the board meeting, according to Malvinder.
- But Shivinder said that he was intervening as some employees were being coerced into giving video statements. And that angered Malvinder, he said.
10. India’s Air Pollution Crisis Revealed
Roughly 1.24 million people died in 2017 from India’s air pollution, according to The Lancet.
- The research released Thursday found 13 percent of India’s deaths -- one out of every eight -- could be attributed to bad air, underscoring the scale of the South Asian nation’s battle with the world’s deadliest air.
- More people died from smog than from household smoke generated by cooking fires. That’s important because Prime Minister Narendra Modi’s government has distributed millions of liquefied petroleum gas canisters to stop people burning dung cakes and wood inside their homes.
- India’s life expectancy would increase by 1.7 years nationally and by two years in north Indian states, such as Uttar Pradesh and Rajasthan, if air quality was at a healthier level.