BQuick On Jan. 11: Top 10 Stories In Under 10 Minutes

This is a roundup of the day’s top stories in brief.

1. Infosys Raises Guidance, Announces Buyback

Infosys Ltd. raised its revenue growth projection aided by strong deal wins even as India’s second largest IT firm’s profit and margin missed analyst expectations.

• Net profit fell 12.2 percent sequentially to Rs 3,610 crore.
• Operating margin fell 110 basis points to 22.6 percent.
• Infosys raised its full-year constant currency guidance to 8.5-9 percent.
• This is the third straight quarter of deal wins of over $1.5 billion.

Here’s more on why margin fell and the headwinds ahead.

Infosys announced a share buyback and a special dividend as the cash-rich firm rewarded shareholders for the second time in two years.

• It will buy back 10.3 crore shares representing 2.6 percent of the paid-up capital at not more than Rs 800 apiece, a premium of 17 percent to today’s closing price. The repurchase will be worth Rs 8,260 crore.
• Infosys also announced a special dividend of Rs 4 per share and fixed Jan. 25 as the record date, and Jan. 28 as the payment date. The payout will be worth around Rs 2,100 crore.

Here’s why Infosys is returning cash with with mix of buyback and dividend.

2. IIP Growth Hits 17-Month Low

Growth in industrial production in India fell sharply in the month of November, reigniting fears of a slowdown in the economy in the third quarter of the current fiscal year.

• The Index of Industrial Production rose by a meager 0.5 percent in November, compared with 8.5 percent in November 2017, according to data released by the Ministry of Statistics and Programme Implementation.
• Growth came in much lower than expected. A Bloomberg poll of 22 economists had projected a growth rate of 3.6 percent. Industrial output had risen by 8.1 percent in October 2018.
• Growth between April-November 2018 now stands at 5 percent.

Manufacturing output suggests a broad-based slowdown.

3. Ashok Chawla Quits As NSE Chairman

The National Stock Exchange of India Ltd. on Friday said Ashok Chawla has resigned as the chairman with immediate effect in light of recent legal developments.

• In a statement, the bourse said Chawla has resigned as "Public Interest Director/ Chairman of the Board of Directors of the National Stock Exchange of India Ltd with immediate effect in light of recent legal developments"
• The Securities and Exchange Board of India has been probing the alleged lapses in high-frequency trading offered through NSE's co-location facility.
• It was also investigating whether some brokers had unfair access to the exchange's co-location facility.

However, the exchange did not provide specific details.

4. Sensex Falls Again

Indian equity benchmarks declined for second day in a row led by losses in Tata Consultancy Services Ltd. after its operating margin contracted in the December quarter. However, losses were capped as ITC Ltd. and Infosys Ltd. saw buying interest.

• The S&P BSE Sensex Index fell 0.27 percent or 97 points to 36,010.
• The NSE Nifty 50 Index declined 0.25 percent or 27 points to 10,795.
• Sixteen of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Realty Index’s 1.4 percent decline.
• On the flipside, S&P BSE FMCG Index was the top gainer, up 0.54 percent.

Follow the day's trading action here.

U.S. stocks fell Friday after a steady inflation report added to speculation that the Federal Reserve will be slow to hike rates this year and political turmoil surrounding the continuing government shutdown that grows more contentious by the day.

• Oil dropped below $52 a barrel and the dollar was steady, putting it on track for its fourth week of declines.
• The S&P 500 slid as energy shares tumbled more than 1 percent, trimming its third straight weekly advance to 2 percent.
• Gold gained 0.1 percent to $1,288.34 an ounce.

Get your daily fix of global markets.

5. 12 Stocks To Watch This Earnings Season

Crude oil has fallen after hitting a four-year high last year. Still, weaker-than-expected festive season sales and a fluctuating rupee is expected two weigh on India Inc.’s third-quarter earnings season.

Here’s a list of 12 large- and mid-cap stocks compiled by BloombergQuint that could either lead or drag earnings. Brokerages expect these NSE 500 companies to:

• Swing from loss to profit or vice-versa.
• Either register profit growth in at least high teens or post higher losses.
• Post lower profit growth than revenue growth.

Stocks with potential upside include Hindustan Unilever, Avenue Supermarts and ONGC. Find out the others here.

6. Weak Banks Chart Their Comeback

The public sector lenders placed under the central bank’s prompt corrective action framework intend to improve their performance and have suggested revival plans to lawmakers.

• Conversion into retail banks or focusing solely on lending to small businesses or farmers are among the strategies the banks have suggested in their responses to the Parliamentary Standing Committee on Finance.
• Nine banks have apprised the panel about their roadmap for revival and the challenges that they’re facing—including capital constraints, sale of defaulters’ properties and loss of experienced staff.
• Two banks—Bank of India and IDBI Bank Ltd.—haven’t submitted revival plans in their responses.

Here’s a summary of the lenders’ responses to lawmakers.

7. India’s Services Engine Is Stalling

India may be set to see its fastest economic growth in three years but a crucial part of the economy is slowing: services.

• Advance estimates for growth put out by the Government’s statistical office earlier this week show that growth across the three key components of the services sector is likely to fall to a seven-year low in 2018-19.
• The reasons, economists say, range from sector specific issues like the slowdown in financial services to tight government finances.

Services, which were a leading engine of India’s growth for long, are now a cause of worry.

8. A Golden Outlook For Gold

Goldman Sachs Group Inc. is leading a pack of bullish voices cheering for gold.

• The bank’s analysts led by Jeffrey Currie raised their price forecast for gold, predicting that over 12 months the metal will climb to $1,425 an ounce -- a level not seen in more than five years.
• Bullion has benefited as rising geopolitical tensions fuel central bank purchases, while fears of a recession helped boost demand from investors seeking “defensive assets,” they said.
• Gold is also getting a boost from mounting speculation the U.S. Federal Reserve may pause in raising borrowing costs, boosting the appeal of non-interest-bearing metal.

Here’s why you should also expect a resurgence of physical demand of gold.

9. What Precedent Alok Verma’s Sacking Sets

Alok Verma resigned from service a day after he was removed as Central Bureau of Investigation’s director by a high-powered committee. Verma, in his resignation letter, said it was a moment of “collective introspection”.

• Senior Supreme Court Advocate Sidharth Luthra has said that it needs to be considered whether Verma had a right for a hearing or not. "Because natural justice is also an important part of considerations in such a matter."
• Shantonu Sen, former joint director of the CBI said that there has been no loss of CBI's credibility because that does not entirely repose on just the director.
• Supreme Court advocate Sanjay Hegde however warned that a dangerous precedent has now been set.

Read how the three experts have weighed in on the development.

10. Nine Rich Men And The Transience Of Wealth

Vishal Khandlwal tells the story of nine rich businessmen, financiers, and leaders who met in Chicago in 1923. In a matter of 25 years, four died broke, one went insane, two committed suicide, and two were just released from prison after serving cases of fraud.

• It’s not how much money we make that matters, but how much money we keep.
• We think we just need to make a little bit more money. This is a path to bankruptcy, morally if not financially.
• Being stuck in the rat race is not intelligent.

So, get yourself financially educated, learn to keep most of what you make, and prepare to come out of the race sooner than later.