Evening wrap:
India’s central bank left its policy rate unchanged. RBI’s decision slightly lifted the equities market. Sensex rallied 500 points to close at 60,201.83, while Nifty traded 0.84% higher at 17,939.80. Prices of petrol and diesel touched an all-time high as crude oil rates went up. Tata Sons won the bid to take-over state-run Air India. RBI raised IMPS limit to ₹5 lakh.
As the energy crisis worsened, China ordered 72 mines in Inner Mongolia to ramp up coal production. The country’s central bank tightened its grip over online payment firms. – John Xavier
Sensex, Nifty rally after RBI policy announcement
Equity indices Sensex and Nifty rallied 500 points at market close today, after the Reserve Bank of India maintained an accommodative stance and kept interest rates unchanged.
Sensex was up 0.88% at 60,201.83, while Nifty traded 0.84% higher at 17,939.80.
The rupee tumbled 20 paise to close at 74.99 against the U.S. dollar. Gold price rose ₹50 to ₹45,959 per 10 grams amid gains in precious metals and rupee depreciation.
RBI policy | Realtors expect housing sales to rise 40%
The real estate industry welcomed the RBI’s decision to keep policy rates unchanged, and said it will help push up housing sales on account of low home loan interest rates.
NAREDCO-Maharashtra President Ashok Mohanani said the interest rates will continue to be at a record low for some time and this is the best time to buy homes.
Tata wins bid to take over troubled state-run Air India
Tata Sons has been selected as the winning bidder to take over state-run carrier Air India, the government said on Friday, marking the end of years of struggle to privatise the financially troubled airline.
China central bank vows to further regulate fintech industry
China’s central bank said it will strengthen supervision and continue its regulatory crackdown on the online payments industry. Chinese regulators have been tightening its grip on tech behemoths in the country for about a year.
"We will continue to cooperate with anti-monopoly authorities to curb monopolies and actively deal with algorithm discrimination and other new forms of anti-competition behaviours," the central bank governor said.
Commerce Minister pushes for ASEAN free-trade agreement
Commerce and Industry Minister Piyush Goyal called for a renegotiation of the India-ASEAN free trade agreement (FTA), to prevent its misuse by ‘third parties’.
This includes removal of trade restrictions as well as non-tariff barriers that is said to have hurt Indian exports disproportionately since the pact was operationalised in 2010.
Piyush Goyal | Photo Credit: File photo
Energy crisis | China orders rise in coal mine output
China has ordered 72 mines in Inner Mongolia to ramp up coal production by nearly 100 million tonnes, as it battles its worst power crunch and coal shortage in years.
The increase would make up nearly 3% of China’s total thermal coal consumption.
Govt aims for 30% EV sales penetration for private cars: Gadkari
Union Minister Nitin Gadkari said the government intends to have EV sales penetration at 30% for private vehicles, 70% for commercial vehicles and 80% for two- and three-wheelers by 2030. He also added that this could help India reduce crude oil consumption by 156 million tonne worth ₹3.5 trillion.
Nitin Gadkari | Photo Credit: PTI
SEBI approves MobiKwik’s ₹1,900 crore-IPO
Markets regulator Sebi has approved payments company MobiKwik’s initial public offering (IPO) to raise up to ₹1,900 crore. The company had filed the Draft Red Herring Prospectus in July.
“Impossible” for India to become $5 trillion economy by 2025: former RBI Governor
Former Reserve Bank of India Governor C Rangarajan said it is “impossible” for India to become a $5 trillion economy by 2025 due to the pandemic. Moreover, the economy will need to grow at 9% per annum for the next five years to achieve that.
Former RBI Governor C Rangarajan | Photo Credit: File photo
Petrol, diesel prices touch record high
Petrol and diesel prices in the country are at all-time high following another round of rate hike after yesterday’s increase. The third consecutive hike comes as domestic fuel prices witnessed possibly the largest rally in rates. Prices of petrol and diesel were increased, by 30 paise and 35 paise respectively, per litre. In Delhi, Petrol is now sold at ₹103.54 per litre, and diesel at ₹92.12 a litre, both prices touching record high levels.
In the last two weeks, price of diesel and petrol have risen by ₹3.5 and ₹2.35 respectively, per litre.
RBI raises IMPS limit to ₹5 lakh
The Reserve Bank of India has proposed to increase the per transaction limit to ₹5 lakh from ₹2 lakh via Immediate Payment Service (IMPS), in an attempt to promote digital transactions in the country.
“In view of the importance of the IMPS system and for enhanced consumer convenience, it is proposed to increase the per transaction limit,” RBI Governor Shaktikanta Das, said.
IMPS is managed by the National Payments Corporation of India and provides 24x7 instant domestic funds transfer facility through several channels.
Evergrande crisis | Chinese property firms hit
Chinese mainland markets returned today after a week-long holiday, opening the trading doors in the country. Chinese property firms straightway took a hit as the shares and bonds issued by them plunged on worries around Evergrande contagion.
Evergrande, one of China’s biggest borrowers, is facing one of the country’s largest defaults as it wrestles with more than $300 billion of debt. It has triggered worries about contagion risks to the property sector.
Bonds issued by property firms such as Kaisa Group, Central China Real Estate and Greenland over China’s National Day break took a hit. Onshore bonds of Xiamen Yuzhou Grand Future Real Estate Development, China Aoyuan Group, Yango Group and Guangzhou R&F Properties also slumped.
Mainland share prices also took a blow, pulling an index tracking the property sector down 1.5% by midday.
Oil rises on switch from gas
Oil price surged today as soaring gas prices have driven some industries to switch to oil from gas and on doubts the U.S. government would release oil from its strategic reserves for now. Brent crude rose 1.1% to $82.88 a barrel, while the U.S. WTI gained 1.3% to $79.32 a barrel.
Both contracts were on track to jump 4% this week, after the U.S. oil hit its highest level since 2014 and Brent reached a three-year high.
Rupee falls against U.S. dollar
After a slight recovery from its biggest single-day drop in six months on Thursday, the Indian rupee fell against the U.S. dollar in early trade today. The domestic unit opened at 75 against the greenback, then slipped to 75.15, registering a decline of 36 paise over its previous close. The rising crude prices and the strength of the U.S. dollar in global markets is weighing on the domestic unit.
RBI leaves rate unchanged
Reserve Bank of India Governor Shaktikanta Das announced the six-member Monetary Policy Committee’s decision today. He said the central bank will retain the prevailing repo rate at 4% and continue with the accommodative stance.
IMF chief’s lawyer claims data probe violated rules
International Monetary Fund (IMF) chief Georgieva’s lawyer claims that the firm, WilmerHale, which probed data irregularities in the World Bank’s Doing Business report, violated the financial institution’s staff rules.
Georgieva has denied the allegations that 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.
The law firm has said it conducted the investigation following all applicable World Bank rules.
The IMF board interviewed Georgieva and WilmerHale this week, and will meet again late today to discuss the matter.
India shares open higher
Indian indices opened higher today on positive global cues. The BSE Sensex opened at 59,960.39, up 282.56 points, after gaining nearly 500 points in the previous session. Similarly, NSE Nifty opened at 17,886.85, up 96.5 points.
Asian market update
Asian shares opened in green, following a rally in the U.S. market. Japan’s Nikkei opened at 28,031.37, up 353.16 points, and gained over 2% in early trade.
South Korea’s Kospi opened at 2,977.82, up 18.36 points from previous close. Hong Kong’s Hang Seng opened at 25,064.80, up 363.07 points.
Chinese mainland markets were open today after a week-long holiday.
In U.S., the three major indices rallied and closed in green on the back of a deal to increase the debt ceiling in the short term. The Nasdaq Composite rose 1.05%, the Dow Jones Industrial Average surged 0.98%, and the S&P 500 was up 0.83% at closing.
Morning note:
Asian markets are tracking a rise in Wall Street as concerns over U.S. debt ceiling eased. Chinese financial markets are set to open first time in a week, which could bring the focus back on the country’s debt woes arising from Evergrande contagion.
Our blog will be tracking RBI’s monetary policy decision, the effect of an oil rebound on domestic fuel prices, among other top developments today. - John Xavier
---- Edited by John Xavier
(With inputs from Reuters, PTI and other news agencies.)
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