BQuick On Oct. 28: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. U.S. Stocks Plunge; Crude Crashes
Stocks tumbled in the U.S. and Europe as rising coronavirus infections and tougher lockdowns added to worries about the economic hit from the pandemic.
The S&P 500 Index fell more than 2% amid a surge in Covid-19 hospitalizations, especially in the Midwest.
Energy shares sank as oil prices declined, and technology stocks were also among the worst performers.
The Stoxx Europe 600 Index fell to a five-month low and sank as much as 3% after German Chancellor Angela Merkel proposed closing bars and restaurants for a month to curb the spread of the virus.
West Texas Intermediate crude sank 5.6% to $37.37 a barrel.
Get your daily fix of global markets.
2. How The Compound Interest Waiver Affects Your Loans, Credit Cards
The Indian government released details of its scheme to offer relief to individuals and small businesses with outstanding loans of up to Rs 2 crore last week, with the Reserve Bank of India operationalising it on Tuesday. Lenders have a short window until Nov. 5 to compensate borrowers for the compound interest that may have accrued over a six-month period starting March.
According to the scheme, borrowers in loan categories including MSME loans and a variety of retail loans, that availed of the Reserve Bank of India’s moratorium on loan repayments, will not have to pay the compound interest or the interest-on-interest that banks were accruing over the six months of the moratorium.
Those borrowers that had continued repaying their loans as per schedule will also stand to benefit.
For such borrowers, it will be assumed that they had availed of the moratorium, and the compound interest that would have accrued will be adjusted against their outstanding loans.
How can consumers compute the amount due to them to ensure banks compensate them adequately? BQ explains...
3. L&T's Q2 Profit, Order Inflow Decline
Larsen & Toubro Ltd.’s quarterly profit and revenue fell, and order inflows slowed, even as the nation eased the lockdown curbs.
Net profit before exceptional item fell 41.8% year-on-year to Rs 1,462.84 crore.
Including exceptional item, it reported a loss of Rs 2,322.1 crore.
L&T reported a one-time cost of Rs 3,732 crore as impairment of funded exposure in the heavy forgings facility joint venture and assets in power development business.
L&T’s order inflow during the quarter also fell 23%.
Find out more on the outlook of capital spending and project pipeline.
4. How Axis Bank, Dr. Reddy’s And Titan Fared In Q2
Axis Bank Ltd. returned to profitability in the quarter ended September aided by an increase in its core income.
Net profit stood at Rs 1,682 crore compared with a loss of Rs 112 crore a year ago.
Net interest income rose 20% year-on-year to Rs 7,326 crore.
Asset quality improved in the second quarter.
Get complete details on the private lender’s results here.
Dr. Reddy’s Laboratories Ltd.’s quarterly profit fell as higher raw material costs and impairment charges offset the increase in sales across all major markets.
Net profit dropped 30% year-on-year to Rs 772 crore.
India revenue rose 21% aided by new acquisition and Covid-related launches Avigan or Favipiravir and Remdesivir.
Globally too, it was helped by new launches and increase in volumes of existing products.
Titan Co.’s net profit fell because of pre-closure of hedging contracts even as sales rose for its mainstay jewellery business.
Net profit declined 38% year-on-year to Rs 199 crore.
The company recognised a loss of Rs 484 crore due to pre-closure of hedging contracts originally designed against sales.
Here’s what the Tata Group firm said about customer demand.
5. As Bihar Votes, All The Key Stats You Need To Know
Over 51% voter turnout has been recorded till 5 p.m. in the first phase of Bihar assembly polls on Wednesday, the Election Commission said in its provisional data.
Voting for the 71 assembly seats out of the state’s total 243, ended at 6 p.m.
More details here.
A Three-Way Tie
Picture the elections as a cricket match. There are in-form players on both sides, others struggling with form retained in the team due to legacy issues, and then some debutants, writes Amitabh Tiwari.
The constant change of partners in Bihar has led to a shift in the voter base of parties who have been hopping sides.
With a ceiling of 31% support, Tejashwi Yadav knows well that he can’t win the battle in a primarily bipolar contest.
Who then is Chirag Paswan a Trojan Horse for? Will the LJP hurt Nitish Kumar, or divide the opposition vote?
Meanwhile, Nitish faces double anti-incumbency of another kind. That against the executive and the legislator.
6. Nifty Slumps As Banks Take A Beating
Indian stocks fell after a volatile session as concern over the increasing spread of the pandemic in some parts of the world weighed on sentiment.
The S&P BSE Sensex ended 1.5% or 600 points lower at 39,922.
The NSE Nifty 50 index managed to defend the 11,700 mark despite shedding 160 points.
Broader markets moved in tandem with the benchmarks with both Midcap and Smallcap index ending with losses of 1% each.
Follow the day’s trading action here.
7. Demand Is Back For Cement Makers, But...
Cost cuts and pricing discipline aided the earnings of pan-India cement makers in the second quarter. Yet, as demand in the economy returns to pre-Covid levels, the focus will be back on the core business.
Fuel and logistics costs are rising again and could impact pricing power.
It comes at a time when cement consumption in urban areas is also returning to normalcy along with a pick up in rural consumption.
The cement makers’ earnings are indicating demand recovery for the industry.
Here’s how pan-Indian cement firms fared in the quarter ended September.
8. Indian Economy: Animal Spirits Soar
India’s economy picked up speed in September as a revival in demand and business activity helped drive the South Asian nation toward recovery from the pandemic-induced slump.
Five of the eight high-frequency indicators, including exports, tracked by Bloomberg News improved last month, while three were steady.
That helped move the needle on a dial measuring the so-called ‘Animal Spirits’ to 5 from 4 in August -- a level arrived at by using the three-month weighted average to smooth out volatility in the single-month readings.
Manufacturing sector activity is back at pre-pandemic levels.
9. Covid-19: India's Curve Flattens As U.S., Europe Battle Second Wave
India’s coronavirus tally hovered just below the 80-lakh mark, even as new cases remained below 50,000 for three straight days.
India added 43,893 new cases taking the total tally to over 79.9 lakh.
India’s minister for textiles and women and child development Smriti Irani has tested positive for Covid-19.
Track all coronavirus related news updates in India, here.
Globally, Covid-19 infections rose past 4.4 crore with over 11.6 lakh dead.
Europe’s resurgent coronavirus outbreak intensified, with Italy’s new cases reaching a record and France reporting the most deaths since April.
Iran saw back-to-back days of record fatalities with 415 deaths in the past 24 hours.
Pakistan is evaluating some actions and restrictions for hotspots to contain a second wave of the virus.
Follow the global spread of the virus here.
10. UPI Ubiquity Will Ease QR Code Standardisation
How will the RBI’s new rules on close-ended QR codes impact payment platforms, merchants and customers? Fintech veteran Deepak Abbot explains what changes.
Platforms that ran closed-loop QR codes won’t be staring at a dead-end.
Rare is the merchant who has not yet been approached by UPI-based platforms.
A few merchants may switch to printing their own QR if they have latent demand from their customers.
We are likely to see a lot more adoption of QR with easier online KYC and faster adoption of smartphones and 4G.