Evening wrap:
Soaring oil prices lifted Saudi Aramco’s valuation, making the oil exporter join the exclusive $2 trillion club, behind Apple and Microsoft.
In India, prices of petrol and diesel touched an all-time high today. And the domestic currency rose against the dollar after suffering its biggest single-day drop in six months yesterday. Equity markets rose as auto stocks gained, led by Tata Motors.
In other developments, British industry group urges the government to take action against rising gas prices. And Russia’s President Vlamidir Putin offered to continue gas supplies to Europe from state-owned Gazprom via Ukraine. – John Xavier
For more on our top stories on economy, business and finance, please read our blog below
Titan shares rally over 9%
Watchmaker Titan’s shares jumped over 9% after the company announced it has witnessed a strong recovery in demand in the September-ended quarter.
Titan’s market valuation crossed the ₹2 trillion-mark, making it the second company after Tata Consultancy Services in the Tata group to cross the valuation milestone.
Fitch cuts India GDP forecast
Credit rating agency Fitch cut India’s economic growth forecast to 8.7% for the current fiscal. However, it has raised the GDP forecast for FY23 to 10%, stating the second wave of COVID-19 infections delayed recovery.
The projections for 2021-22 fiscal compares to a contraction of 7.3% recorded in the last financial year and a 4% growth in 2019-20.
"In our view, however, the impact of the second wave was to delay rather than derail India's economic recovery, reflected in an upward revision of our FY23 (April 2022-March 2023) GDP forecast to 10% from 8.5% in June," Fitch said.
Sensex, Nifty rise as auto stocks gain
Equity indices Sensex and Nifty ended higher on Thursday, led by gains in auto stocks like Tata Motors.
The BSE Sensex ended 0.82% higher at 17,790.35, while NSE Nifty 50 index was up 0.82% at 59,677.83. Nifty’s Auto Index rose nearly 5%, the biggest rise since May.
Meanwhile, the rupee settled 19 paise higher at 74.79 against the U.S. dollar. Separately, gold rose by ₹65 to ₹46,012 per 10 gram.
Tata Motors shares at a four-year high
The shares of Tata Motors surged to the highest levels in nearly four years, after Morgan Stanley Research upgraded the stock’s rating to “overweight” from “equal-weight”. Shares rose nearly 14% in the Nifty 50 index.
The upgrade shows the research firm expects the auto company to earn a full-year profit after eight years of losses.
More companies reporting frauds in market activity: SEBI's Mohanty
Markets regulator SEBI’s whole-time member S.K. Mohanty said the instances of companies reporting frauds are increasing amid an uptick in retail investors’ interest in equity.
Citing a recent survey, Mohanty said 65% of companies in the country have reported fraud this year, and urged companies to mount efforts to curtail them.
SK Mohanty | Photo Credit: File
Development banks’ investments could destroy biodiversity
Investments made by public development banks worldwide could destroy nature worth $800 billion each year, according to think tank Finance for Biodiversity (F4B).
Researchers estimated potential damage to nature from the banks' financing could cost society $800 billion annually - or the equivalent of 7 cents for every dollar they have invested. This includes activities backed by the banks to harm nature, or conversely how their reliance on plants, animals and ecosystems could cut the value of their investments.
The study called for greater testing and transparency of the institutions’ lending to reduce risks to biodiversity.
Aramco hits $2 trillion valuation
Saudi Aramco’s valuation soared to $2 trillion, pushed by sky-high oil prices. The company’s shares rose over 1% in Wednesday’s trading.
Aramco is now one of the world’s most valuable companies, just behind Apple and Microsoft.
Rising gas prices to boost oil demand: Analysts
Soaring gas prices are likely to drive a switch to oil that will boost global crude demand by several hundred thousand barrels per day (bpd), according to analysts’ forecasts.
Speaking at the Energy Intelligence Forum this week, Saudi Aramco CEO Amin Nasser also put the demand boost at 500,000 bpd.
JP Morgan went higher, putting the potential bump in global demand for oil-fired power generation as high as 2 million bpd, but said a 750,000 bpd rise through March is more likely.
Piramal board approves pharma business demerger
Piramal Enterprises (PEL) said its board has approved a composite scheme of arrangement to demerge its pharmaceutical business and simplify its corporate structure.
The pharma business will now be consolidated in Piramal Pharma, while the amalgamation of PHL Fininvest with PEL will create a non-banking financial services entity, according to a regulatory filing.
Energy crisis | British industry group calls for govt action
Britain’s industry group Energy Intensive Users Group has urged the government and regulators to take action on the rising prices of gas and concerns over supply through the winter season.
The country is currently grappling with record wholesale energy prices.
Auto retail sales dip in September
Retail sales of vehicles fell 5% in September compared to last year, hurt by a decline in two-wheeler and tractor dispatches.
Total retail sales last month stood at 12,96,257 units last month, according to data by industry body Federation of Automobile Dealers Association (FADA).
The semiconductor shortage has also started impacting the over 150 cc segment.
Prices of food commodities rise
Prices of agricultural commodities climbed for the second straight month in September, according to data by United Nations agency Food and Agriculture Organisation (FAO). The surge was driven by price increases in cereals and vegetable oils. Food commodities have risen steeply in the past year, fuelled by harvest setbacks and China-induced demand.
FAO raised its projection of global cereal production in 2021 to 2.8 billion tonnes from 2.788 billion tonnes estimated last month.
Petrol, diesel prices at an all-time high
Petrol and diesel prices in the country are at all-time high following another round of rate hike. The hike comes on a day when global oil prices marginally dropped. Prices of petrol and diesel were increased, by 30 paise and 35 paise respectively, per litre. In Delhi, Petrol is now sold at ₹103.24 per litre, and diesel at ₹91.42 a litre.
In Lucknow and Gandhinagar, price of petrol crossed the ₹100-a-litre mark for the first time. The two cities were the last state capitals that sold petrol at less than ₹100-a-litre.
India to grow at 8.3%: World Bank
World Bank estimates India’s GDP to grow by 8.3% in the current fiscal year. The multi-lateral agency bases its forecast on the country’s surge in public investment, which in turn will boost domestic demand.
Update on Zee Entertainment
Zee Group founder Subhash Chandra
Zee’s minority shareholder Invesco is making an attempt to take over the company, Chairman Emeritus Subhash Chandra, noted. He asked Invesco to make an open offer and take over the company if it wants.
“You are an 18% shareholder but not the owner, you need to follow the laws of the country. Make an open offer to 75% shareholders and take over the company if you want,” he said.
Invesco has been pushing for an Extraordinary General Meeting to discuss the removal of Zee CEO and MD Punit Goenka and appointment one of its nominees to the board.
Energy crisis | Natural gas transit to Europe via Ukraine to continue
Russia’s President Vladimir Putin has asked state-owned natural gas supplier Gazprom to continue gas supplies to Europe via Ukraine. Putin also noted that Russia was acting as a reliable partner, and that the EU erred when it shifted to spot market earlier.
Meanwhile, Russia’s Deputy Prime Minister Alexander Novak said that certification of the Nord Stream 2 undersea gas pipeline could cool soaring gas prices in Europe.
Oil edges down
After hitting a multi-year high yesterday, prices of oil drew back. The drop came after an unexpected rise in U.S. crude inventories. Brent crude slid 0.5% to $80.69 a barrel, off its three-year high of $83.47. Similarly, WTI fell 0.93% to $76.71 a barrel.
Rupee rises against U.S. dollar
After suffering its biggest single-day drop in six months yesterday, the Indian rupee rose against the U.S. dollar in early trade today. The domestic unit opened at 74.77 against the greenback, then inched higher to 74.76 registering a rise of 22 paise over its previous close.
The domestic unit gained following a positive trend in the equities market. Forex traders say market participants continue to remain cautious, and are awaiting RBI’s policy statement, which is scheduled to be released on Friday.
7-Eleven stores in India
Reliance Retail has entered into a master franchise agreement with the American retail major 7-Eleven for the introduction of 7-Eleven convenience stores in India. The first 7-Eleven store will open on October 9 in Andheri East, Mumbai.
The retail giant said it plans to expand in key neighbourhoods and commercial areas, across the Greater Mumbai cluster to start with.
IMF chief says she was ‘mischaracterised’
International Monetary Fund (IMF) chief Kristalina Georgieva denies she pressured World Bank staff (while serving as the institution’s CEO) to alter data to change China’s ranking in the ‘Doing Business 2018’ report.
She said the law firm that conducted the investigation, WilmerHale, mischaracterised her actions, and that she had been told she was not a subject of the investigation.
“The idea that after nearly 20 years at the World Bank, I would suddenly start pressuring Bank staff inappropriately to change information in a Report is outrageous and untrue,” Georgieva told the IMF board. “The Bank and the Fund live by our data and our analysis. To corrupt these is simply unacceptable.”
The World Bank data scandal has dented the reputation of both multi-lateral institutions.
IMF’s executive board plans to meet again on Friday to discuss the matter.
India shares open higher
Indian indices opened higher today on positive global cues. The BSE Sensex opened at 59,632.81, up 443.08 points, after shedding over 550 points in the previous session. Similarly, NSE Nifty opened at 17,810.55, up 164.55 points.
Asian market update
Asian shares opened in green, and rallied in early trade, following a late recovery in the U.S. market. Japan’s Nikkei opened at 27,665.97, up 137.1 points.
South Korea’s Kospi opened at 2,936.87, up 28.56 points. Hong Kong’s Hang Seng, opened at 24,339.32, up 372.83 points.
Chinese mainland markets were closed today for the holidays.
In U.S., the three major indices showed late recovery and closed in green after the country’s politicians appeared near to a temporary agreement to prevent a federal debt default.
Morning note:
After a round of sell-offs yesterday, major Asian indices are trading up this morning. We’ll be tracking the unfolding energy crisis, rising government bond yields and the effect of China’s Evergrande.
India’s Finance Minister Nirmala Sitharaman downplayed risks from the Chinese property giant. She also noted that the RBI and the finance ministry are closely watching the U.S. Federal Reserve’s for any possible policy shift.
In other global development, IMF’s Managing Director Kristalina Georgieva says she was misled by a law firm in connection with ‘Doing Business’ reports probe. – John Xavier
---- Edited by John Xavier
(With inputs from Reuters, PTI and other news agencies.)
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