Pedestrians are silhouetted as they walk past the Statue of Ismoili Somoni in Dushanbe, Tajikistan, (Photographer: Taylor Weidman/Bloomberg)

BQuick On Nov. 1: Top 10 News Stories In Under 10 Minutes 

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

1. All Eyes On Nov. 19

For the second time in two years, the central board of the Reserve Bank of India finds itself in the eye of a storm.

  • Two years after the government pushed its controversial decision to demonetise 86 percent of the country’s currency through the RBI board, it now appears to be routing its demand for more flexible banking regulations through this body.
  • The board will meet next on Nov. 19 to conclude the unfinished agenda of the Oct. 23 meeting.
  • Among the issues being discussed was a relaxation of the prompt corrective action norms, which has become one the flashpoints between the RBI and the government.

Can the board find a common ground?

2. GST: Rs 1 Lakh Crore Milestone

The goods and services tax collection for September improved from previous month and crossed the Rs 1 lakh crore mark. That compares with the Rs 94,442 crore revenue from GST paid for August, according to a Finance Ministry statement.

Tax collected under various heads:

  • Central GST: Rs 16,464 crore
  • State GST: Rs 22,826 crore
  • Integrated GST: Rs 53,419 crore
  • Compensation cess: Rs 8,000 crore

3. Indian Markets Slip; U.S. Stocks Rise

Indian equity benchmarks paused after Wednesday’s rally and edged lower dragged by weakness in information stocks.

  • The S&P BSE Sensex declined 10 points to 34,432.
  • The NSE Nifty 50 Index slipped 6 points to 10,380.
  • For most part of the day, the benchmarks swung between gains and losses as buying interest in Larsen & Toubro Ltd., Yes Bank Ltd. and Axis Bank Ltd. was offset by selling pressure in Infosys Ltd., ITC Ltd., Tech Mahindra Ltd. and HCL Technologies Ltd.

Follow the day's trading action here.

U.S. stocks turned higher after Donald Trump claimed progress in calming the trade war with China.

  • The S&P 500 Index clung to its first three-day gains since September as it seeks to bounce back from the worst month in seven years.
  • The dollar slipped from a 16-month high, as the 10-year Treasury yield hovered around 3.16 percent.
  • Gold climbed 1.3 percent to $1,230.03 an ounce, the largest increase in three weeks.

4. Q2 Earnings: HDFC, HPCL

Housing Development Finance Corporation Ltd.’s profit for the quarter ended September met estimates.

  • Net profit rose 24 percent on a yearly basis to Rs 2,467 crore, India’s largest mortgage lender said in an exchange filing.
  • HDFC's performance was aided by the profit from the sale of investments that rose to Rs 1,000 crore against Rs 63.1 crore reported in the year-ago period.
  • That included Rs 891 crore from HDFC Asset Management Company Ltd.’s initial public offering.
  • Net interest income rose 16 percent to Rs 2,594 crore, removing income from loans sold.
  • Net interest margin stood at 3.5 percent.

Here are more highlights.

Hindustan Petroleum Corporation Ltd.’s profit fell for the third straight quarter, missing estimates, as gross refining margin dipped to its lowest in nearly two years.

  • Net profit fell 36.5 percent sequentially to Rs 1,092 crore in the quarter-ended September 30.
  • Revenue rose 1 percent to Rs 67,518 crore.
  • Gross refining margin fell to $4.81 a barrel, a two-year low.

Operating margin too fell.

5. FPI Selloff Crosses Rs 1 Lakh Crore

Foreign investors remained net sellers of Indian debt and equity through the month of October, selling the most in nearly two years last month. The continued outflows have kept the rupee weak, although the Indian currency has rebounded from its all-time lows.

  • Foreign portfolio investors have sold over Rs 1 lakh crore across the debt and equity markets, shows data from the National Securities Depository Ltd.
  • Of this, October saw net sales of Rs 38,906 crore - the steepest this year and the most since November 2016.
  • The outflows in October were dominated by equities rather than debt. This, according to Madhavi Arora, economist at Edelweiss Securities, was a reflection of the weak equity risk sentiment globally in the month of October.

Outflow from debt markets were higher than equity.

6. Investment Ideas Ahead Of Election 2019

Investors with a strong political opinion—and who are willing to take a bet on it—can try and invest in mid-cap stocks right now, said Macquarie Capital Securities’ Managing Director Sandeep Bhatia.

  • For others, it is better to wait for the election outcome next year, he said, noting that politics is the main near-term risk for the Indian markets.
  • Post elections, Indian equities should rise to reflect the country’s economic strength, Bhatia said.
  • Until then, he said, quality names among the large-cap stocks are the way to go.

7. India Hit As U.S. Revokes Duty-Free Privileges

The U.S. on Thursday revoked duty-free concessions on import of at least 50 Indian products, mostly from handloom and agriculture sectors, reflecting the Trump administration’s tough stand on trade-related issues.

  • The federal register issued a notification, listing out 90 products which were so far subject to duty-free provisions under the Generalized System of Preferences.
  • Donald Trump issued a presidential proclamation on Tuesday, leading to the removal of these products from the privilege beginning Nov. 1.
  • With India being the largest beneficiary of the GSP, it has been hit the most by the decision.
  • In 2017, India’s duty-free export to the U.S. under GSP was more than $5.6 billion.

Here are the goods that no longer qualify for GSP.

8. NBFCs Move Back Towards Bank Borrowings

As the debt markets turned volatile, non-bank lenders made a beeline back to banks to meet their funding needs, suggests data released by the Reserve Bank of India.

  • The RBI’s sectoral credit data shows that incremental credit by banks to NBFCs rose by Rs 56,500 crore in September, the sharpest month-on-month growth this fiscal year.
  • Non banking financial companies have been borrowing heavily using market instruments, but with rates rising and risk aversion seeping in, good ol’ bank lines of credit came in handy.
  • Bank credit to the NBFC sector stood at Rs 5.46 lakh crore. Among all sectors that banks lent to, NBFCs continued to remain the fastest growing segment.

9. Kill IL&FS’ Toxic Culture By Dismembering It

The $12.8 billion bankruptcy of Infrastructure Leasing & Financial Services Ltd. is starting to offer a glimmer of hope.

It’s about time, writes Andy Mukherjee.

  • The good news is that the new government-appointed board, which can resolve the insolvency without creditors swooping in on assets held across 347 IL&FS firms, has drawn up three sensible approaches.
  • First is to find a group level investor. The second is to sell operating verticals and then look for investment. The third strategy is to find a buyer for each road or power plant separately.
  • These approaches may be mixed and matched to extract the most value.

The stump that would remain would be a pure financier.

10. Sri Lanka Crisis: A Failure Of Institution-Building And Nation-Building

The crisis unleashed in Sri Lanka reflects deep underlying flaws in a country struggling to transition from authoritarianism to democracy and from war to peace, writes Sreeram Chaulia.

  • Sri Lanka has a structural legacy problem of an arbitrary and authoritarian exercise of power that precedes Sirisena, Wickremasinghe, and Rajapaksa.
  • The concept of an ‘Executive Presidency’ since 1978 has vested excess concentration of power in the hands of strong-willed heads of state.
  • As long as the question of the tussle between the French model of an ultra-powerful presidency versus the Westminster model of parliamentary democracy is not settled, Sri Lanka will face repeated bouts of uncertainty and skulduggery.

The old ‘pro-India’ and ‘pro-China’ tags to Wickremasinghe and Rajapaksa may no longer apply.