BQuick On Oct. 12: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. New Measures To Front-Load Consumer Spending, Capex
The Indian government has announced a set of measures in the hope of front-loading consumer spending and capital expenditure. This is the second fiscal support package announced to revive the economy that's expected to see its worst recession in at least four decades.
Finance Minister Nirmala Sitharaman announced measures in two buckets — schemes intended to boost spending by central government employees, and those intended to push states’ capital expenditure.
The total estimated boost to the economy may add up to Rs 1 lakh crore if the private sector matches the provisions introduced by the government for its employees, said Sitharaman.
Find out in detail about the individual schemes for government employees here.
Interest Free Loans For States
Interest-free loans could help states clear supplier dues even as the stimulus measure is unlikely to provide any meaningful push to fresh capex.
Along with other steps to boost demand ahead of the festive season, Finance Minister Nirmala Sitharaman announced Monday special interest-free 50-year loans to states for capital expenditure worth Rs 12,000 crore.
While 50% will be disbursed initially, the rest will be given after the first instalment is used.
The total amount will have to be spent by the end of the ongoing financial year ending March 2021.
The announcement is unlikely to spur capex, say economists.
2. CPI Jumps, IIP Contracts
Retail inflation jumped to its highest in eight months in September on the back of rising food prices.
The CPI inflation stood at 7.34% last month compared with 6.69% in August.
Inflation in the food and beverages category stood at 9.73% in September against 8.29% in August, led by higher prices of pulses, meat and fish.
Get inflation internals here.
India’s industrial output contracted for the sixth straight month in August, with mining and manufacturing witnessing a steep fall in output over a year ago.
The Index of Industrial Production contracted 8% in August compared with a fall 10.77% in July.
Mining output fell 9.8%, while manufacturing output declined 8.6%. Electricity generation was down 1.8% in August.
Industrial output showed a fall in output across all categories.
3. Mumbai Returns To Normal After Massive Blackout
Power supply was restored in most parts of India’s financial capital after its worst blackout in decades disrupted transport networks and briefly hit trading volume in bond markets.
Mumbai witnessed a power failure at around 10 a.m. local time.
Power tripping -- or an overload in the circuit that forces the system to shut down automatically -- was the reason for the grid’s collapse, according to local power utility Tata Power Ltd.
Power supply was restored to essential services such as trains and hospitals by about 2 p.m., according to local authorities.
Mumbai hasn’t seen a power outage as wide as Monday’s in decades.
4. Sensex Subdued; U.S. Stocks Advance
India’s stock benchmark ended the day with gains, even after large parts of the country’s financial capital saw its worst blackout in decades.
The S&P BSE Sensex closed up 0.2%, eroding an advance of as much as 1% after a power outage in Mumbai disrupted trading activity although the nation’s biggest stock exchanges continued to function normally.
The NSE Nifty 50 Index rose 0.1%. Both measures are close to erasing year-to-date losses.
Trading volumes in the fixed-income market dropped as many traders, sheltering from the coronavirus pandemic at home, failed to complete trades.
Follow the day’s trading action here.
U.S. stocks climbed to an almost six-week high amid a rally in giant technology companies as traders awaited earnings from banks and news on a fresh round of economic stimulus.
The S&P 500 extended gains into a fourth day, while the NYSE FANG+ Index of megacap tech shares rose 2.2%.
Amazon.com Inc. surged before its Prime Day event, Apple Inc. jumped as its price target was raised by RBC Capital Markets while Twitter Inc. rallied after Deutsche Bank recommended buying the stock.
West Texas Intermediate crude fell 2.8% to $39.47 a barrel.
Get your daily fix of global markets.
5. Hoax Bids Behind Vedanta’s Delisting Failure?
Vedanta Ltd.’s delisting failed because of 12.3 crore shares offered in invalid bids. And these remained unconfirmed even after a four-hour extension.
According to proxy advisory firm SES, that raises a question if these bids were real and backed by shares or hoax bids to give a false sense that the required 90% threshold is met.
The Securities and Exchange Board of India must call for data and examine who placed these bids and why they remained unconfirmed, Stakeholders Empowerment Services said in a report.
The answer, it said, will be crucial for other companies, namely Adani Power Ltd., Hexaware Technologies Ltd., Allcargo Logistics Ltd., which are also queued up for delisting from the exchanges.
The proxy advisory firm has made another interesting observation in its report.
6. Stock Broking Leaderboard: Rising Star
Discount brokers are strengthening their hold on India’s highly competitive stock broking industry, with another such firm surpassing all the traditional rivals amid the coronavirus pandemic-related restrictions.
Tiger Global Management-backed RKSV Securities India Pvt. became the second-biggest broker in the country after nearly doubling the number of its customers to 1.2 million in the six months through September, data compiled by National Stock Exchange of India Ltd. shows.
Top online broker Zerodha Broking Ltd. also grew the number of clients by 75% to 2.5 million.
The 11-year company is hopeful that its “golden days” are still ahead.
7. Anil Ambani Bankruptcy Case: Latest Twist
An Indian court has reached out to a group of Chinese banks that are trying to recover money from Anil Ambani, in the latest twist in a personal bankruptcy case against the former billionaire.
The trio of Chinese lenders won a ruling in a London court in May after pursuing Ambani for more than $700 million in a dispute over defaulted loans.
Ambani has requested that the banks be included in his challenge to a separate bankruptcy case against him in India, and the Delhi High Court is asking for their views on that. It did not identify the banks by name.
The Delhi High Court also ordered a moratorium on recoveries from any sale of Ambani’s personal assets.
8. Bollywood Producers Sue Two TV News Channels
Four Hindi film industry associations and 34 top producers have approached the Delhi High Court against English news channels Republic TV and Times Now, and their key anchors Arnab Goswami and Navika Kumar, to refrain them from a smear campaign against Bollywood.
The suit seeks to refrain the two channels “from making or publishing irresponsible, derogatory and defamatory remarks against Bollywood as a whole and members of Bollywood, and restraining them from conducting media trials of Bollywood personalities and interfering with the right to privacy of persons associated with Bollywood.”
Law firm DSK Legal told BloombergQuint it has filed the suit on behalf of the Bollywood associations. The date of hearing isn’t known yet.
The plaintiffs of the suits include the production houses of Shah Rukh Khan, Salman Khan, Karan Johar and Aamir Khan.
9. Duo Behind Modern Auctions Win Nobel
Two Stanford University academics who helped design the U.S. auction that allocates mobile-phone frequencies will share the 2020 Nobel Prize in economics.
Paul Milgrom and Robert B. Wilson, who won’t be traveling to Stockholm to receive the award due to the Covid-19 crisis, have had their ideas applied to sales of everything from aircraft landing slots to fishing quotas.
Their theories are even evolving to encompass renewable energy markets.
Their insights have helped design new auction formats for things that are hard to sell in a traditional way.
10. Covid-19: India's Active Caseload Drops Again
Covid-19 cases in India crossed 71 lakh, even as the active caseload dropped for the ninth straight day.
India added over 66,000 fresh cases in 24 hours taking the total tally to more than 71 lakh, according to health ministry data.
Active cases are below the 8.7-lakh-mark after reaching as high as 10.17 lakh in mid-September.
Still, India is on track to overtake the U.S. as the country with the most cases.
Track the latest updates on the Covid-19 pandemic in India, here.
Globally, total Covid-19 confirmed cases have topped 3.73 crore with over 10.7 lakh of them dead.
The coronavirus continued its unrelenting spread, with resurgences across Europe and North America.
China recorded its first locally transmitted infections in 17 days.
Follow the global spread of the virus here.