BQuick On Jan. 15: Top 10 Stories In Under 10 Minutes

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

1. Trade Deficit At 10-Month Low

India’s trade deficit narrowed to the lowest in 10 months in December as lower crude oil prices and falling gold demand reduced the burden on the import bill.

• The gap between exports and imports stood at $13.08 billion, compared with $14.2 billion in the same month last year.
• India’s imports dipped 2.44 percent to $41.01 billion in December from $42.03 billion last year.
• Exports last month grew marginally to $27.93 billion compared with the same period last year, with increased shipments of petroleum products, electronic goods and plastic and linoleum.

Softer crude prices have helped contain imports.

2. Jet’s Lenders To Meet Tomorrow

Lenders to Jet Airways (India) Ltd., led by State Bank of India, will meet on Wednesday to discuss a resolution plan prepared by the lead lender, two bankers in the know confirmed.

• The plan includes selling further equity to Etihad Airways PJSC and reducing promoter Naresh Goyal’s stake from the current 51 percent to about 22 percent, said one of the bankers quoted above.
• Removing Goyal from the air carrier’s board and allowing his son Vihaan Goyal to take over his seat will also be part of the discussions.
• The basics of the plan have been circulated to all the lenders involved and it will be further discussed at the meeting, the two bankers quoted above said.
• The lenders are looking to close discussions soon so that a resolution plan for the account is in place before March 2019.
• India’s second largest air carrier owes Rs 8,000 crore to its lenders and defaulted on dues last month.

The plan, if approved, will allow lenders to extend fresh credit to the airline.

3. Indian Markets Rally On Rate Cut Hopes

Indian equity benchmarks rallied on rate cut hopes after inflation cooled to the lowest level in eighteen months in December.

• The S&P BSE Sensex rose 1.30 percent or 465 points to 36,318.
• The NSE Nifty 50 Index jumped 1.39 percent or 149 points to 10,887.
• Consumer price inflation fell to its lowest in 18 months in December, stoking predictions of a rate cut.
• All the 19 sector gauges compiled by BSE ended higher led by the S&P BSE Information Technology Index’s 3 percent gain.

Follow the day’s trading action here.

U.S. technology shares gained, buoying major indexes, after China ratcheted up stimulus measures to combat slowing growth.

• The S&P 500 edged higher as senior Chinese officials vowed to cut taxes to boost the economy, lifting technology companies battered by concerns about the rising impact of the U.S.-China trade war.
• Banking shares weighed on benchmarks after JPMorgan Chase & Co. reported its worst quarter for bond trading in a decade.
• Adding to caution, the bank’s head Jamie Dimon warned that the ongoing government shutdown could cause a recession.
• The 10-year Treasury yield fell below 2.70 percent, while the dollar gained against major peers.
• In Europe, stocks declined and the euro dropped after German data confirmed the weakest year for growth since 2013.
• The pound fell as U.K. politicians prepared for a vote on Brexit.

Get your daily dose of global markets.

4. Q3 Results: Zee Entertainment’s Profit Soars

Zee Entertainment Enterprises Ltd.’s profit rose the most in five quarters, led by strong growth across all its segments.

• Net profit of India’s largest broadcaster rose 50.3 percent year-on-year to Rs 562.4 crore in the October-December period.
• Revenue rose 17.9 percent to Rs 2,166.8 crore, in line with Rs 2,085-crore estimate.
• Ebitda rose 43.3 percent to Rs 792 crore.
• Operating margin expanded to 36.6 percent from 30.1 percent.

Growth has come from Zee’s improved market share.

5. What Foreign Investors Bought And Sold In December

Foreign investors remained net buyers of Indian equities in December. This even as they sold bank stocks for the sixth consecutive month.

• The foreign portfolio investors sold $497 million in the banking shares during December, according to the National Securities Depository Ltd. data.
• This was the highest outflow among other sectors. This was followed by software services sector and pharmaceutical sectors with outflows of $244 million and $119 million, respectively.

Here’s how banks bore the brunt.

6. Morgan Stanley Downgrades Indian IT

Morgan Stanley has turned cautious on Indian information technology stocks going into the new year.

• The brokerage house downgraded its rating on the sector to ‘In-Line’ from earlier ‘Attractive’ and advised investors to adopt ‘defensiveness’ and go selectively on IT services stocks.
• The downgrade comes at a time when two of India’s biggest software exporters —Tata Consultancy Services Ltd. and Infosys Ltd.—indicated a pickup in deal win momentum.
• The flagship of the Tata Group bagged new orders worth $1 billion in the third quarter and while Infosys’ large deal signings stood at $1.5 billion during the December quarter.
• It says there is a possibility of the Indian rupee appreciating against the U.S. dollar, which can in turn hamper margins since most of the large Indian IT companies realise revenues in currencies other than the local unit.

Here’s the second reason why there’s a concern about the sector’s profitability.

7. Card Companies Start Falling In Line

Card companies and payments services providers hope to be fully compliant with the Reserve Bank of India’s data localisation norms by September 2019, two people in the know confirmed.

• Despite their initial reluctance, these companies have already started complying with the data localisation norms and hope to complete the process of storing data of Indian transactions ‘only in India’ over the next nine months.
• According to the people quoted above, global payments firms like MasterCard and Visa have already set up servers in India to store data for all new transactions emanating from India.
• The next step is to delete data of Indian transactions from global servers.
• Visa and Mastercard have submitted a road map to the RBI on the time frame over which this process will be completed, said people familiar with the matter.

A select set of large payments service providers had approached the RBI to ease the guidelines.

8. Brexit Judgment Day

Theresa May’s Brexit deal finally goes to vote in the U.K. Parliament, with defeat all but certain. The scale, though, will determine the prime minister’s next step and her options for ending the impasse.

• Voting on amendments starts after 7 p.m. in London (12:30 a.m. IST).
• Four amendments have been selected so the final vote on the motion should be about 8 p.m.
• Two of the amendments call on the government to change the much-loathed Irish backstop; if those amendments are approved, then Parliament will no longer be voting on a motion that fully reflects the deal May negotiated in Brussels.

Follow live updates here.

10. Kumbh Mela Kicks Off

More than 16 lakh devotees took a holy dip at the Sangam – the confluence of Ganga, Yamuna and Saraswati on the auspicious occasion of Makar Sankranti, marking the start of the Kumbh Mela.

• The mela that commenced on Jan. 15 will conclude on March 4.
• Traditional akharas, five-star tents, and high-tech lost-and-found centres are set up along the river banks of Uttar Pradesh's Prayagraj for the Kumbh Mela.
• This year’s mela, known as ‘Ardh Kumbh Mela,’ is being held after six years.

In pictures: Sadhus take 'holy dip' in Sangam.