BQuick On Aug. 10: Top 10 Stories In Under 10 Minutes
racks 5. This is a roundup of the day’s top stories in brief.
1. Good Time To Take A Home Loan
India’s Monetary Policy Committee may have kept rates on hold at its meet last week but home loan rates continue to be at their lowest in at least 15 years, pulled down by a sharp cuts in benchmark policy rates in India and a recent change in regulations.
MPC has cut policy rates by 115 basis points since the Covid crisis began in March and lenders, now mandated to offer external benchmark linked home loans, have passed those on fully to borrowers.
Lenders are offering home loans at rates as low as 6.65% with the final interest cost depending on the credit profile of a borrower.
To be sure, when the interest rate cycle reverses, customers will see their home loan rates go up commensurately.
But are consumers buying homes despite lower rates?
2. Mutual Fund Investors Cash Out
Equity mutual funds in India witnessed their first monthly net outflows in more than two years as investors continue to cash out to tide over the pandemic-related credit crunch even as the stock market looked past dire economic forecasts and mounting virus cases to jump 50% from its March low.
Equity and equity-linked schemes witnessed an outflow of Rs 2,480 crore in July compared with an inflow of Rs 241 crore in the previous month, according to data released by the Association of Mutual Funds in India.
Net investments into such schemes have been declining for the last three months.
Nine out of the 10 equity fund categories witnessed net outflows compared to four in June.
While investors pulled out from large- and multi-cap schemes for the second straight month, mid and small caps witnessed their first-ever outflow in a year.
3. Nifty Treads Water; U.S. Stocks Near All-Time Highs
Indian equity markets faced pressure at higher levels in today's session. Benchmark indices ended with gains but off the highest point of the day.
The S&P BSE Sensex ended 0.37% higher at 38,182.
The NSE Nifty 50 index ended 0.54% higher at 11,274.
Pharma outperformed once again, with the Nifty Pharma index ending with gains of 5.5%.
Follow the day’s trading action here.
India's defence stocks surged after the nation announced curbs on the import of 101 weapons and military platforms, including light combat helicopters, transport aircraft, conventional submarines and cruise missiles by 2024 — a move aimed at safeguarding the domestic manufacturers.
Find out how much each stock gained in trade today.
U.S. stocks traded near all-time highs, crude oil gained and Treasury yields fell as President Donald Trump took executive action over the weekend to extend economic aid.
The S&P 500 edged higher for a seventh day, approaching the record high set in February before the coronavirus pandemic sent markets tumbling globally.
The S&P 500 Total Return Index, which includes reinvested dividends, rose to an all-time high, exceeding its February peak. The price-only version is less than 1% away from breaking out.
Oil rose after Saudi Aramco said demand will continue to improve.
Get your daily fix of global markets.
4. Liquidity Was The First Vaccine, Says N Jayakumar
People and policymakers all over the world may be waiting for a vaccine for Covid-19 but N Jayakumar thinks liquidity is the first vaccine—at least against the virus’ financial and economic impact.
Liquidity injected into economies by global central banks brings peace of mind to businesses and individuals in the short term which gives medical companies the needed one-two years to work out a medical vaccine, the managing director of Prime Securities told BloombergQuint in an interview.
Central banks globally have introduced unprecedented amounts of liquidity into the economies and slashes rates to cushion the Covid-19 shock.
The excess liquidity in the system has led Jayakumar to his thesis: “The longer the pandemic lasts, the stronger will be the indices.”
Watch the full conversation to see Jayakumar explain why this “low-hanging fruit” has gone now.
5. How Titan And Shree Cements Fared In Q1
Titan Co. suffered a loss in the quarter ended June as stores remained shuttered during the Covid-19 lockdown and consumers spent less on discretionary items.
Net loss of India’s largest branded jewellery maker stood at Rs 270 crore.
Revenue fell 62.3% year-on-year to Rs 1,862 crore.
Ebitda loss stood at Rs 246 crore.
All four verticals of Titan saw revenue decline sharply.
Shree Cement Ltd.’s quarterly profit rose even as the Covid-19 lockdown disrupted operations and sales.
Net profit rose 2.1% year-on-year to Rs 371 crore.
Revenue declined 23.4% at Rs 2,326 crore.
Operating profit fell 22.3% to Rs 700.6 crore.
Lower raw material prices helped offset some of the lockdown impact.
6. IndiGo's Rs 4,000-Crore Fundraise
IndiGo, India's biggest airline, plans to raise as much as Rs 4,000 crore by selling new shares after the coronavirus pandemic halted air travel across the world, ravaging the cash flow of carriers.
The board of the airline, operated by InterGlobe Aviation Ltd., approved raising cash by selling shares to institutional investors, it said in a statement.
Airlines have found themselves perilously exposed to the pandemic as companies slashes business travel and tourism numbers tumbled.
About 4 lakh workers at airlines around the world have lost their jobs or are facing redundancy.
7. JSW Fast-Tracks U.S. Overhaul
The coronavirus pandemic is accelerating India’s most valuable steelmaker’s plans to overhaul its loss-making U.S. operations.
JSW Steel Ltd. outlined plans two years ago to invest $1 billion in the U.S. to expand its global footprint.
That plan was curtailed by an economic downturn and import tariffs imposed by President Donald Trump, with the situation worsening with the virus outbreak.
The steelmaker has idled its Ohio plant to begin upgrading its electric arc furnace and plans to restart production at the 1.5 million tons facility in March.
It has also shut its pipe mill in Baytown to fix equipment and plans to automate and optimize operations to cut costs.
As part of the shakeup, JSW has also brought it a new chief for its U.S. operations.
8. Will Auto Sales Bounce Back During Festive Season?
Automobile dealers expect a spurt in sales as the festive season kicks off in August, further aiding the revival in retail shipments that has been driven by rural India in the last two months.
“With a caveat of no further lockdowns, especially in auto manufacturing hubs, the outlook for the month is positive in comparison to July,” Ashish Kale, president at the Federation of Automobile Dealers Associations, said in a media statement on Monday.
“August brings with it the beginning of a long festival season. With Onam and Ganesh Chaturthi in the next few days, FADA hopes that the auto industry will start its recovery journey in a linear manner,” he said.
Still, the automakers’ lobby is somewhat cautious.
9. MGNREGA Jobs In Short Supply During Lockdown
Only a fifth of the households surveyed by Gaon Connection saw a family member find employment under India's flagship rural jobs guarantee programme at a time the coronavirus pandemic froze economic activities.
Households in Chhattisgarh, Uttarakhand and Rajasthan availed most work under the Mahatma Gandhi National Rural Employment Guarantee Act, while those in Gujarat reported the least jobs under the scheme, said the survey—one of the first on the impact of the unprecedented lockdown.
Gaon Connection spoke to over 25,300 respondents in 179 districts across 20 states and three union territories.
According to Gaon Connection’s survey, the states under by the ruling Bharatiya Janata Party have not performed as well as those led by the Congress.
Get an overview of the findings here.
10. India Reports More Than 1,000 Covid-19 Deaths; Pranab Mukherjee Tests Positive
Coronavirus infections in India raced past the 22-lakh-mark, adding the latest lakh in two days.
India added more than 62,000 cases in a matter of 24 hours, taking the total tally to 22.1 lakh.
This includes over 44,300 deaths and more than 15 lakh patients who have recovered.
Not only did the country report over 60,000 cases for the fourth straight day, it has also reported over 1,000 deaths for the third time.
Former President Pranab Mukherjee said he has tested positive for Covid-19.
Track news and developments around the Covid-19 outbreak in India here.
The coronavirus pandemic is forcing India’s children out of school and into farms and factories to work, worsening a child-labor problem that was already one of the most dire in the world.
It’s difficult to quantify the number of children affected since the pandemic erupted, but civil society groups are rescuing more of them from forced labor and warn that many others are being compelled to work in cities because of the migrant labor shortage there.
A total of 591 children were rescued from forced work and bonded labor from different parts of India during the lockdown by Bachpan Bachao Andolan, a civil society group on children’s rights, founded by Nobel laureate Kailash Satyarthi.
NGOs point to the fact that the real spike in child labor is yet to come.