Today’s top business news: Stocks flat, fuel prices rise again to reach record highs, Ethereum co-founder donates over $1 billion in cryptocurrency towards India’s COVID-19 relief, and more
The Nifty and the Sensex opened the day on a flat note despite overnight gains in US stocks.
Join us as we follow the top business news through the day.
Sensex ends marginally higher; Nifty stays below 14,700
A flat day for stocks.
PTI reports: “Equity benchmark Sensex ended marginally higher after a choppy session on Friday as concerns over the economic impact of the second wave of COVID-19 and pace of vaccination weighed on investor sentiment.
While the 30-share BSE index ended 41.75 points or 0.09 per cent higher at 48,732.55, the broader NSE Nifty fell 18.70 points or 0.13 per cent to 14,677.80.
Asian Paints was the top gainer in the Sensex pack, rallying over 8 per cent, followed by ITC, Nestle India, L&T, HUL and Reliance Industries.
On the other hand, IndusInd Bank, M&M, Dr Reddy’s, SBI and NTPC were among the laggards.
“Indian equity markets remained largely range bound over the last week. The COVID situation in India is no doubt grim and hence the health issue is something that could keep markets volatile in the near term,” said Shibani Kurian, Senior EVP & Head- Equity Research, Kotak Mahindra AMC.
Going forward, market will likely track the pace of vaccinations, trajectory of active cases curve and management commentary of companies. Rollback of localised lockdowns and trend of inflation in many global commodities like crude oil and steel will be other key factors to watch out for, she noted.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul ended on a positive note. Stock exchanges in Europe were also trading with gains in mid-session deals.
Meanwhile, international oil benchmark Brent crude was trading 0.92 per cent higher at USD 67.67 per barrel.”
Reliance Jio announces offer free talk time for JioPhone users for COVID pandemic
Some respite for Jio customers.
PTI reports: “Reliance Jio on Friday said it is working with Reliance Foundation to provide 300 free minutes of outgoing calls per month, which amounts to 10 minutes per day, for the entire period of the pandemic.
The scheme will be available to JioPhone users who have not been able to recharge due to the ongoing pandemic, the company said in a statement.
Reliance Jio is the first company to announce free talk time for users in the second wave of pandemic wherein many states have imposed lockdowns or lockdown-like restrictions as a desperate measure to restrict the spread of the virus.
“Jio working with Reliance Foundation will provide 300 free minutes of outgoing calls per month (10 minutes per day) for the entire period of the pandemic, to JioPhone users who have not been able to recharge due to the ongoing pandemic,” Jio said in a statement.
In addition to free talk time, Jio has announced that for every JioPhone plan recharged by a JioPhone user, they will get an additional recharge plan of the same value for free.
“In these unprecedented times of the COVID pandemic, we at Jio want to ensure that staying connected remains accessible and affordable for all customers, especially the less-privileged sections of our society,” the statement said.
However, these offers are not applicable on annual or JioPhone device bundled plans.”
Ethereum co-founder donates over $1 billion in cryptocurrency towards India’s COVID-19 relief
Ethereum founder Vitalik Buterin has donated over $1 billion in cryptocurrency to support India’s COVID-19 relief efforts, making it one of the largest philanthropic activities by a single person.
The world’s youngest crypto billionaire extended support in the form of Shiba Inu (SHIB), a meme-based digital currency based on Ethereum. The donation was made to the India Covid Relief Fund, run by co-founder and COO of Polygon Sandeep Nailwal.
“One thing we have learnt from Ethereum and Vitalik Buterin is importance of community. We will not do anything which hurts any community especially the retail community involved with $SHIB. We will act responsibly,” Sandeep said in a tweet thanking Vitalik for the support.
Akshaya Tritiya begins on sombre note; jewellers expect 10-15% sales
A dull day for jewellers.
PTI reports: “Akshaya Tritiya, a highly auspicious day to purchase gold, has started on a sombre note and jewellers are expecting only 10-15 per cent sales as the onset of the COVID-19 second wave, local restrictions and partial lockdowns have affected consumer sentiment.
“As most of the states are under lockdown to curb the infections there is almost no business activity. The day of Akshaya Tritiya has begun on a slow note and whatever booking or enquiries are happening it is only through tele or digital medium,” All-India Gems & Jewellery Domestic Council (GJC) chairman Ashish Pethe told PTI.
He said, jewellers are expecting only 10-15 per cent sales this Akshaya Tritiya in places where the lockdown is not imposed or there are partial shutdowns.
The second wave of the pandemic is turning out to be much worse than last year with huge loss of life across the country causing an overall negative consumer sentiment, Pethe said.
India’s COVID-19 tally of cases climbed to 2,40,46,809, while the death toll rose to 2,62,317 with 4,000 fresh fatalities, according to the Union Health Ministry data updated on Friday.
During the ongoing second wave of the COVID-19 infections, many states have imposed lockdowns or lockdown-like restrictions as a desperate measure to restrict the spread of the virus.
PNG Jewellers Chairman and Managing Director Saurabh Gadgil said the day has begun with enquiries and bookings, however, as delivery is not possible due to lockdowns the sales during this Akshaya Tritiya is likely to be tamed and muted.
Usually, 30-40 tonne gold is sold on the auspicious occasion of Akshaya Tritiya. However, this time sales are not likely to reach even 1 tonne.
“We are urging customers to place orders for later delivery. As last year the base was very low, this year will be better, that is 10-15 per cent more than 2020. However, sales are not likely to reach even 1 tonne. Usually on a normal Akshaya Tritiya 25-30 tonne gold is sold across the country,” he noted.
Retail stores are closed in several major cities like Mumbai, Delhi, Pune, and in gold consuming states like Kerala, Andhra Pradesh and Maharashtra.
Kalyan Jewellers Executive Director Ramesh Kalyanaraman said Akshaya Tritiya 2021 is going to be different from last year as 20 per cent of our showrooms are functioning but with regionalised timing restrictions.
“However, with the evolving on-ground situation and individual concerns, the overall sentiment in India is not favourable with customers hesitating to step out of their homes. Therefore, the Kalyan Jewellers Gold Ownership Certificate, launched during last year’s lockdown continues to see traction this season,” he said.
Further, he stated that there is no global shutdown, and therefore 100 per cent of the company’s Middle East showrooms are operational.
“In the Middle East, business has not reached pre-COVID levels yet. With the newly imposed travel and flight, tourism from South Asia is affected, and that naturally has an impact on the jewellery sector. Considering the very low base of 2020, this year’s Akshaya Tritiya will naturally be better, but the numbers will not be comparable to the pre-COVID situation of 2019 or earlier,” he added.”
Sputnik V to cost Rs.995.40 a dose in India
Sputnik V joined India’s immunisation programme against COVID-19 when the first dose of the Russian vaccine was administered in Hyderabad on Friday.
The maximum retail price of the imported vaccine is Rs.995.40 per dose.
“As part of a limited pilot, the soft launch of the vaccine has commenced and the first dose was administered in Hyderabad on May 14,” said Dr. Reddy’s Laboratories, the marketing partner in India for the vaccine of the Russian Direct Investment Fund (RDIF).
It follows the imported doses of Sputnik V that arrived in the country on May 1 receiving regulatory clearance from the Central Drugs Laboratory, Kasauli, on May 13.
Petrol, diesel prices rise again, reach record highs
Fuel price inflation continues unabated.
PTI reports: “Petrol and diesel prices on Friday touched record high levels across the country after rates were increased for the fourth time this week.
Petrol price was hiked by 29 paise per litre and diesel by 34 paise a litre, according to a price notification by state-owned fuel retailers.
The increase propelled rates in Delhi to climb to an all-time high of Rs 92.34 a litre for petrol and Rs 82.95 per litre for diesel.
Rates had already crossed the Rs 100-mark in several cities in Rajasthan, Madhya Pradesh and Maharashtra and with the latest increase, prices in Mumbai too were inching towards that level.
A litre of petrol in Mumbai now comes for Rs 98.65 and diesel is priced at Rs 90.11 per litre.
Fuel prices differ from state to state depending on the incidence of local taxes such as VAT and freight charges. Rajasthan levies the highest value-added tax (VAT) on petrol in the country, followed by Madhya Pradesh.
This was the fourth increase in prices this week and eighth hike since May 4, when the state-owned oil firms ended an 18-hiatus in rate revision they observed during assembly elections in states like West Bengal.
Sri Ganganagar district of Rajasthan had the costliest petrol and diesel in the country at Rs 103.27 per litre and Rs 95.70 a litre respectively.
In eight increases, petrol price has risen by Rs 1.95 per litre and diesel by Rs 2.22.
Since March last year when the government raised excise duty on fuel to an all-time high, petrol price has increased by a record Rs 22.75 per litre (after accounting for a handful of occasions when rates fell) and diesel by Rs 20.66.
Oil companies, who have in recent months resorted to unexplained freeze in rate revision, had hit a pause button after cutting prices marginally on April 15. This coincided with electioneering hitting a peak to elect new governments in five states including West Bengal.
No sooner had voting ended, oil companies indicated an impending increase in retail prices in view of firming trends in international oil markets.
Central and state taxes make up for 60 per cent of the retail selling price of petrol and over 54 per cent of diesel. The union government levies Rs 32.90 per litre of excise duty on petrol and Rs 31.80 on diesel.”
PM releases 8th installment worth over Rs 20,000 cr to 9.5 cr farmers under PM-KISAN
Some relief measures from the Centre amid the pandemic.
PTI reports: “Prime Minister Narendra Modi on Friday released the eighth installment of over Rs 20,000 crore to more than 9.5 crore farmer beneficiaries under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme on Friday via video-conferencing.
Agriculture Minister Narendra Singh Tomar, who was present on the occasion, said West bengal has joined the scheme with more than 7 lakh farmers of the state getting the benefit today.
Under the PM-KISAN scheme, the government is providing Rs 6,000 in three equal installments to 14 crore farmers annually. The amount is directly transferred into the bank accounts of the beneficiaries through direct benefit transfer (DBT) mode.
An amount of over Rs 1.15 lakh crore has been transferred to farmer beneficiaries so far under the PM-KISAN scheme, launched on February 24, 2019.
PM Modi will also interact with five farmers from states like Uttar Pradesh, Maharashtra, Andhra Pradesh, Meghalaya, Jammu and Kashmir and Andaman and Nicobar on the occasion.”
IEX clocks highest trade volume of 22.42 BU in March quarter
Another milestone for the energy exchange.
PTI reports: “The Indian Energy Exchange (IEX) recorded the highest power trade volume or sales of 22.42 billion units (BU) in the March quarter with year-on-year growth of 62.1 per cent.
The power trade volume was 13.83 BU in the January-March quarter last year, IEX said in a statement.
According to the statement, the Q4FY’21 ended on March 31, 2021, saw the highest-ever quarterly electricity volume at 22.4 BU and also highest-ever year-on-year (YoY) growth of 62.1 per cent.
Fiscal 2021, saw the highest-ever yearly volume of 73.9 BU traded at the IEX since 2008, resulting in 37.3 per cent YoY growth. The power trade volume was 53.86 BU in 2019-20.
The growth was driven by the competitive power prices, growing consumption of electricity, availability of adequate domestic coal, besides commencement of the new and much awaited market segments such as the real-time market and the green market, it said.
The day-ahead market saw an average market clearing price of Rs 2.82 per unit in the fiscal year 2021, about 6 per cent lower than the previous year price, it stated.
Low power prices, and ample sell-side liquidity through the year helped the distribution utilities and industrial consumers to optimize their power procurement and maintain good financial liquidity amidst the COVID crisis, it added.
The real-time electricity market which commenced trading on June 1, 2020 has received an incredible response from the market participants. The market crossed the 1-BU benchmark for four consecutive months — from December 2020 to March 2021.
On a cumulative basis in Q4 FY’21, the market traded 3,766 MU. Since its commencement, the market traded 9,468 MU till March 31, 2021.
Another key market segment – the green term ahead market, which commenced trading on August 21, 2020 has cumulatively traded 785 MU since commencement.
The IEX on Thursday posted over 33 per cent rise in its consolidated net profit at Rs 60.85 crore in the March 2021 quarter, mainly on the back of higher revenues.
The company’s consolidated net profit stood at Rs 45.61 crore in the quarter ended on March 31, 2020.
Its total income rose to Rs 100.33 crore in the quarter, from Rs 79.59 crore a year ago.
In the full fiscal 2020-21, the firm’s consolidated net profit rose to Rs 205.43 crore, as compared to Rs 175.71 crore in the 2019-20.
Total income in 2020-21 rose to Rs 356.23 crore, from Rs 297.40 crore in 2019-20.”
‘Lockdowns to dent gold sales on Akshaya Tritiya’
Gold buying on Akshaya Tritiya this year may be muted as stores remain closed following lockdowns in 19-20 cities, according to dealers.
However, demand for digital gold and Gold ETFs is likely to witness a rise, they say.
“Consumer demand, as compared with the previous years, has taken a hit as stores are either closed or are operating only for few hours because of the lockdowns,” said Suvankar Sen, CEO, Senco Gold and Diamonds. “We have started seeing online sales to an extent because of Akshay Tritya and the upcoming wedding season,” he added.
He also said gold prices had increased by almost 5% in the last one month as it had emerged as an instrument of safe investment as also a hedge against inflation.
Oil extends loss on India COVID-19 cases, U.S. pipeline restart
Demand troubles continue even as supply eases.
Reuters reports: “Oil prices fell on Friday after dropping about 3% a day earlier as coronavirus cases remained high in major oil consumer India and as a key fuel pipeline in the United States resumed operations after being shut due to a cyber attack.
Brent crude oil futures were down 26 cents, or 0.4%, at $66.79 a barrel by 0 GMT, while West Texas Intermediate (WTI) was down 20 cents, or 0.3%, at $63.62 a barrel. Both prices are heading for their first weekly loss in three weeks.
“The commodity super cycle rally just hit a hard stop and the energy market doesn’t know what to make of Wall Street’s fixation over inflation and the slow flattening of the curve in India,” said Edward Moya, senior market analyst at OANDA. India is the world’s third biggest oil consumer.
“The crude demand story is still upbeat for the second half of the year and that should prevent any significant dips in oil prices,” he added.
Prices came under pressure as a broader surge in commodity prices, labor shortage and much stronger-than-expected U.S. consumer prices data this week stoked inflation concerns that could force the Federal Reserve to raise interest rates.
Raising rates typically boosts the U.S. dollar, which in turn pressures oil prices because it makes crude more expensive for holders of other currencies.
India on Friday reported 343,144 new coronavirus cases over the past 24 hours, taking its overall caseload past the 24 million mark, while deaths from COVID-19 rose by 4,000.
In the United States, President Joe Biden reassured motorists that fuel supplies should start returning to normal this weekend, even as more filling stations ran out of gasoline across the Southeast nearly a week after a cyber attack on the nation’s top fuel pipeline.
Colonial Pipeline said late on Thursday it had restarted its entire pipeline system and had begun deliveries in all of its markets.
Traders were also watching the situation in the Middle East after Israel fired artillery and mounted more air strikes on Friday against Palestinian militants in the Gaza Strip amid constant rocket fire deep into Israel’s commercial centre.”
Go Airlines files preliminary papers for Rs 3,600 crore-IPO
An airline IPO amid the pandemic.
PTI reports: “Budget carrier Go Airlines, which has rebranded itself as ‘Go First’, has filed preliminary papers for an initial share sale worth Rs 3,600 crore.
The Wadia group-promoted carrier has been operating for 15 years and the proceeds from the initial public offer (IPO) will be primarily utilised for repayment of debt.
The airline is looking to raise up to Rs 3,600 crore through sale of shares, according to the draft red herring prospectus (DRHP).
The proceeds are planned to be utilised towards “prepayment or scheduled repayment of all or a portion of certain outstanding borrowings” as well as for replacement of letter of credits, which are issued to certain aircraft lessors towards securing lease rental payments and future maintenance of aircrafts, with cash deposit.
Besides, the carrier would look to repay dues of Indian Oil Corporation Ltd, in part or full, for fuel supplied to it, and also use the proceeds for general corporate purposes, as per DRHP.
“Our company expects to receive the benefits of listing of the equity shares, including to enhance our visibility and our brand image among our existing and potential customers and to create a public market for our equity shares in India,” it noted.
In the financial year ended March 2020, the airline had a loss of Rs 1,270.74 crore while total income stood at Rs 7,258.01 crore.
It is now focusing on ultra low cost carrier (ULCC) model. At present, there are two operational scheduled carriers listed on domestic bourses – Indigo and SpiceJet.
After announcing rebranding on Thursday, Go First CEO Kaushik Khona said the airline has stayed resilient during the really tough times of the past 15 months.
“Even as the times continue to be extraordinary, Go First sees opportunities ahead. This rebranding reflects our confidence in the brighter tomorrow,” he had said.”
Indian shares flat, Asian Paints soars after strong results
A flat start to the day for stocks after yesterday’s bull run in US stocks.
Reuters reports: “India’s benchmark Nifty 50 stock index was flat in volatile trading on Friday as losses in heavyweight IT and financial shares offset a surge in Asian Paints following strong quarterly results.
The NSE Nifty 50 index edged down 0.09% to 14,683.2 by 0459 GMT, while the S&P BSE Sensex was 0.03% higher at 48,702.98. Both indexes are set to finish the holiday-shortened week about 1% lower after losses earlier in the week on U.S. inflation worries.
“While there is not much movement on either side of the needle, there is a lot of sector rotation in the market. A lot of money is moving from large banks into sectors like pharmaceuticals and healthcare,” said Siddharth Purohit, Research Analyst at SMC Global Securities.
“Corporate results for the fourth quarter have also not been as bad as expected, and that has helped the market hold on to current levels.”
Paint maker Asian Paints soared nearly 11% after reporting a jump in quarterly profit and was the top boost to the Nifty.
Agrochemical maker UPL surged 9.4% to a near 26-year high after solid quarterly results and upbeat forecast.
The Nifty Pharma index gave up early gains but was headed for its eighth week of gains, while the Nifty Bank index was set for weekly losses of more than 1%.
The Nifty Metal index dropped 3.4% and was on course for a weekly loss as metal prices slid after a record-setting rally, while IT firms Tata Consultancy Services and Infosys fell 1.5% and 1.2%, respectively.
Data released on Wednesday showed Indian inflation eased to a three-month low in April, but experts warned that lockdowns risk creating supply bottlenecks that could fuel price pressures in coming months.
Nifty components Larsen & Toubro, Cipla and Dr Reddy’s Laboratories are scheduled to report results on Friday.”
‘Stalled projects’ completion is stimulus’
Finance Minister Nirmala Sitharaman on Thursday said the government’s efforts to help finish stranded housing projects would serve as a ‘sustained stimulus’ for the ailing real estate sector and drive demand in core sectors including cement and steel.
Speaking at the virtual handing over of apartments to 640 households following the completion of the first stalled residential project funded through the Special Window for Affordable & Mid-Income Housing (SWAMIH) in Mumbai, Ms. Sitharaman said that the project, completed over 18 months despite the COVID-19 pandemic, indicated ‘positivity’ for the realty sector.
“I remember, in 2019, the number of families that kept calling the Prime Minister and the representations that kept coming to us about the bank loans they had taken, the EMIs they had to pay,” the minister said. “2019 was a very testing time for us on this particular score, because the real estate industry was going through a stressed time, they were cash-strapped,” she added.