The Nifty and the Sensex opened the day on a positive note with yet another day of strong gains buoyed by news of a successful vaccine for the coronavirus.
Join us as we follow the top business news through the day.
Vaccine triggers rotation in markets
Sensex hits 43,000-mark for first time; Nifty tops 12,600
Yet another bullish day for stocks across the globe.
PTI reports: “Extending its winning streak for the seventh straight session, equity benchmark Sensex soared 680 points to scale another lifetime high on Tuesday, tracking a global market rally driven by Pfizer’s COVID-19 vaccine trials data.
After touching its lifetime peak of 43,316.44 during the day, the 30-share BSE index ended 680.22 points or 1.60 per cent higher at 43,277.65.
The broader NSE Nifty too touched a fresh intra-day high of 12,643.90. It ended at 12,631.10, up 170.05 points or 1.36 per cent.
Bajaj Finance was the top gainer in the Sensex pack, surging around 9 per cent, followed by IndusInd Bank, L&T, Bajaj Finserv, HDFC, SBI, ICICI Bank, HDFC Bank, ONGC and Axis Bank.
On the other hand, Tech Mahindra, HCL Tech, Infosys, Nestle India, Sun Pharma and TCS closed in the red.
“Announcements by BioNTech and Pfizer about successful phase 3 trial of COVID-19 vaccine instilled confidence among investors and possibility of sustained economic recovery led sharp buying in beaten down stocks,” said Arjun Yash Mahajan, Head Institutional Business at Reliance Securities.
Favourable global markets and NDA’s surprising lead in Bihar assembly elections also supported the rally, he added.
However, champions that emerged during pandemic like IT and pharma stocks witnessed sharp profit booking, he noted.
Pfizer and BioNTech on Monday said their vaccine candidate was found to be more than 90 per cent effective in preventing COVID-19.
Elsewhere in Asia, bourses in Hong Kong, Seoul and Tokyo ended with gains, while Shanghai settled lower.
Stock exchanges in Europe were mostly trading on a positive note.
Foreign institutional investors remained net buyers in the capital market as they purchased shares worth Rs 4,548.39 crore on Monday, according to provisional exchange data.
Meanwhile, international oil benchmark Brent crude was trading 1.42 per cent higher at USD 43 per barrel.”
Passenger vehicle retail sales fell 9% in October: FADA
Retail sales of passenger vehicles (PVs) fell nearly 9% in October from a year earlier as factors such as lower discounts and supply chain-related issues dragged down demand, the Federation of Automobile Dealers Associations (FADA) said on Monday.
The numbers are in stark contrast to the strong growth posted by OEMs in dispatches to the dealers anticipating strong demand during Diwali. While market leader Maruti Suzuki had posted an 18% growth in wholesale sales, players such as Hyundai and Hero MotoCorp had witnessed record sales.
FADA said even though the nine-day Navratri period witnessed robust vehicle registrations, October retail sales were in the red compared to October 2019 when both Navratri and Diwali were in the same month.
“While new launches continued to be in demand in the passenger vehicle segment, entry level motorcycles witnessed lean demand in the two-wheeler segment,” FADA president Vinkesh Gulati said.
Oil jumps on vaccine hopes, OPEC+ signals
Oil prices jumped by close to 10% on Monday for its biggest daily gain in almost six months after news of a highly effective vaccine against COVID-19 and Saudi Arabia’s assurance that an OPEC+ oil output deal could be adjusted to balance the market.
Brent crude was up $3.37, or 8.5%, to $42.82 a barrel at 7:32 p.m. IST.
“Oil and other risk assets are reacting positively today to the Pfizer vaccine news,” said BNP Paribas analyst Harry Tchilinguirian. Oil prices also found support from a weaker U.S. dollar on the back of Joe Biden’s victory, said UBS oil analyst Giovanni Staunovo.
India PC market clocks 9.2% growth to 3.4 mn units in Sept qtr: IDC
The pandemic-induced lockdown has turned out to be a blessing in disguise for PC manufacturers.
PTI reports: “E-learning and remote working needs have helped the Indian PC market log its biggest quarter in seven years with shipment rising 9.2 per cent year-on-year to 3.4 million units in July-September, as per research firm IDC.
The shipment – which includes desktops, notebooks and workstations – stood at 3.1 million units in the third quarter of 2019.
“(About) 3.4 million units (were) shipped during the quarter, as the demand for e-learning and remote working remained strong, resulting in Q3 2020 being the biggest quarter in the last seven years in India,” IDC said on Tuesday.
Although the commercial segment had very few government and education projects, the consumer segment recorded its biggest quarter ever with 2 million shipments, growing 41.7 per cent year-on-year and 167.2 per cent from the previous quarter, it added.
The demand for notebooks remains much higher than the current supply, which is likely to lead to another strong quarter of shipments in October-December, it said.
HP Inc retained the top position in the overall PC market with a share of 28.2 per cent in September 2020 quarter, followed by Lenovo (21.7 per cent), Dell Technologies (21.3 per cent), Acer Group (9.5 per cent) and Asus (7.5 per cent).
IDC said schools and colleges continued to function virtually, leading to a surge in demand for consumer notebooks, especially in large cities. Despite the supply challenges, vendors were able to stock up for the upcoming online festivals.
New entrants like Xiaomi and Avita were able to leverage this opportunity but remained outside of the top five companies in the consumer segment.
Apple shipments also grew 19.4 per cent year-on-year as it ended its biggest quarter of shipments in the country, IDC noted.
“There is still a lot of uncertainty if and when will the schools and colleges return to physical classrooms at full strength. This is forcing students to manage all their learning virtually. This demand is expected to stay strong as India remains under penetrated in PCs,” Bharath Shenoy, market analyst for PC Devices at IDC India, said.
He added that the growing broadband connectivity in the country is making online learning easier for students, and therefore this opportunity will continue to be relevant for PC vendors for at least a few more quarters.
In the commercial segment, enterprises continued investing in PCs under their business continuity planning to manage their remote working requirements.
However, the volume of key big deals has come down in this second wave of enterprise buying as compared to initial orders in the June 2020 quarter.
This led to a marginal 3.1 per cent year-on-year growth in the overall enterprise segment, IDC said.
Notebook shipments grew at a strong 70.1 per cent year-on-year as enterprises preferred them over desktops.
Small and medium businesses (SMBs) resumed their purchases after taking a slight pause as business operations started for most of the sectors with a relaxation in the lockdown restrictions, IDC said.
Shipments to this segment grew 5.5 per cent year-on-year in September quarter 2020, it added.
However, this growth can also be attributed to channel procurement for better control over inventories amid the uncertain supply situation in the ecosystem, it added.
“Anticipating a longer work from home possibility, enterprises are getting ready for a larger mobile workforce and keep reducing their dependency on desktops. Also, SMBs started showing more momentum and will be critical in sustaining the ongoing growth in the commercial segment. Unfortunately, shortages of some key components continue to be a challenge,” IDC India Associate Research Manager Client Devices Jaipal Singh said.
Vendors that will be able to manage the supplies of these components will benefit from this opportunity more as there is still a lot of untapped demand for PCs in the country, he added.”
Japan’s SoftBank back in the black as investments improve
Japanese technology company SoftBank Group Corp. said Monday it restored its profitability in the last quarter as its investments improved in value.
The Tokyo-based company reported a 627 billion yen, or about $6.1 billion, profit in July-September, compared with a loss of 700 billion yen in the same quarter of 2019.
SoftBank said its quarterly sales rose nearly 5% to 1.35 trillion yen, or $ 13 billion, from 1.29 trillion yen.
SoftBank’s Vision Fund also has become profitable recently.
SoftBank, which invests in an array of companies, has sold U.S. carrier Sprint, as well as British IoT company Arm. It has also sold some its stake in Chinese e-commerce company Alibaba to raise cash for more investments.
Wipro’s Premji emerges as most generous Indian in FY20
Azi Premji remains India’s most generous billionaire.
PTI reports: “IT major Wipro’s Azim Premji donated Rs 22 crore a day or Rs 7,904 crore in a year to emerge as the most generous Indian in FY20 and top a list of philanthropy.
Premji pipped HCL Technologies’ Shiv Nadar, who had earlier topped the list collated by Hurun Report India and Edelgive Foundation, by a wide margin. Nadar’s donations stood at Rs 795 crore for FY20 as against Rs 826 crore in the year-ago period. Premji had donated Rs 426 crore in the previous fiscal.
Richest Indian Mukesh Ambani of Reliance Industries retained the third spot among the list of givers by donating Rs 458 crore as against Rs 402 crore a year ago, it said.
The raging pandemic had the corporate honchos repurposing their donations to fight the COVID infections, and the top giver on this turned out to be Tata Sons with a Rs 1,500- crore commitment, followed by Premji at Rs 1,125 crore and Ambani’s Rs 510 crore.
A bulk of the corporate commitments seemed to be given to the PM-CARES Fund, with Reliance Industries committing Rs 500 crore, and Aditya Birla Group donating Rs 400 crore, the report said. It can be noted that Tatas’ commitment also includes a Rs 500 crore donation to the newly created fund.
Premji’s generosity pulled the total donations up by 175 per cent to Rs 12,050 crore in FY20, the list said.
Azim Premji Endowment Fund owns 13.6 per cent of the promoter’s shareholding in Wipro and has the right to receive all money earned from promoter shares, the report said.
The number of individuals who have donated more than Rs 10 crore increased marginally to 78 from the year-ago period’s 72, the report said.
With a donation of Rs 27 crore, Amit Chandra and Archana Chandra of ATE Chandra foundation are the first and only professional managers to ever enter the list.
The list has three of Infosys’ co-founders with Nandan Nilekani (Rs 159 crore), S Gopalkrishnan (Rs 50 crore) and S D Shibulal (Rs 32 crore).
The list of 109 individuals who have donated over Rs 5 crore has seven women, led by Rohini Nilekani’s Rs 47 crore.
Education is the highest beneficiary sector with 90 philanthropists, led by Premji and Nadar, donating Rs 9,324 crore, the report said, adding healthcare came second with 84 donors and was followed by disaster relief and rehabilitation with 41 donors.
The financial capital led by donor count at 36, followed by New Delhi at 20 and Bengaluru at 10.
E-commerce firm Flipkart’s co-founder Binny Bansal was the youngest donor at 37 with a commitment of Rs 5.3 crore and the average age of the donors on the list was 66 years, it said.”
EU ‘regrettably’ hits U.S. with tariffs, seeks better Biden ties
The European Union will impose tariffs on up to $4 billion of U.S. imports in retaliation for U.S. subsidies for Boeing, but said on Monday it was hopeful of an improvement in trade ties under U.S. President-elect Joe Biden.
The move, given the green light by the World Trade Organization last month, is the latest in a 16-year U.S.-EU dispute over civil aviation subsidies. U.S. tariffs on $7.5 billion of EU products after a parallel WTO case against Airbus have been in place for over a year.
“We have made clear at every stage that we want to settle this long-running issue,” EU Trade Commissioner Valdis Dombrovskis told a news conference after an online meeting of EU trade ministers on Monday.
“Regrettably, despite our best efforts (and) due to lack of progress on the U.S. side, we can confirm that the European Union will later today exercise our rights and impose counter-measures awarded to us by the WTO in respect to Boeing.”
Pfizer shares zoom 20% on vaccine report
No surprise here after Pfizer’s .
PTI reports: “Shares of Pfizer Limited zoomed nearly 20 per cent on Tuesday after Pfizer Inc and BioNTech SE said their vaccine candidate was found to be more than 90 per cent effective in preventing COVID-19.
The stock jumped 16.29 per cent to Rs 5,875 — its record high — on the BSE.
At the NSE, it gained 19.83 per cent to its lifetime high of Rs 5,900.
“The first set of results from our Phase 3 COVID-19 vaccine trial provides the initial evidence of our vaccine’s ability to prevent COVID-19.
“We are reaching this critical milestone in our vaccine development program at a time when the world needs it most with infection rates setting new records, hospitals nearing over-capacity and economies struggling to reopen,” Pfizer Chairman and CEO Albert Bourla said on Monday.
After discussion with the Food and Drug Administration (FDA), the companies recently elected to drop the 32-case interim analysis and conduct the first interim analysis at a minimum of 62 cases, the company said in a statement.
”… we are a significant step closer to providing people around the world with a much-needed breakthrough to help bring an end to this global health crisis. We look forward to sharing additional efficacy and safety data generated from thousands of participants in the coming weeks,” Bourla said.
However, the announcement does not mean a vaccine is imminent. This interim analysis, from an independent data monitoring board, looked at 94 infections recorded so far in a study that has enrolled nearly 44,000 people in the US and five other countries, the AP reported.
Pfizer Inc did not provide any more details about those cases and cautioned the initial protection rate might change by the time the study ends.
The shots made by Pfizer and its German partner BioNTech are among 10 possible vaccine candidates in late-stage testing around the world — four of them so far in huge studies in the US.”
Equity mutual funds continue to see outflow
Equity mutual funds witnessed an outflow of ₹2,725 crore in October, making it the fourth consecutive monthly withdrawal, on profit booking by investors.
All the equity schemes, barring large- and mid-cap and sectoral funds, have seen outflows, data from the Association of Mutual Funds (AMFI) in India showed on Monday.
However, investors put in over ₹1.1 lakh crore from debt MFs last month after pulling out over ₹51,900 crore in September.
Overall, the MF industry witnessed a net inflow of ₹98,576 crore across all segments during the period under review, against an outflow of a little over ₹52,000 crore in September.
India’s antitrust body orders investigation into Google payments app, in-app billing
More scrutiny of Google’s payments business by India’s competition watchdog.
Reuters reports: “India’s antitrust body on Monday ordered an investigation into allegations that Alphabet Inc’s Google was abusing its market position to promote its payments app as well as forcing app developers to use its in-app payment system.
Reuters reported in May that the Competition Commission of India (CCI) was looking into a complaint that alleged Google was hurting competition by unfairly promoting its Google Pay app, which allows inter-bank fund transfers and other payment services.
In its 39-page order, the CCI said Google’s agreements with some smartphone makers to have the Google Pay app pre-installed might “disturb the level playing field” and should be investigated.
The probe has been handed over to the CCI’s investigation unit. The case has been filed by an informant whose identity has been kept anonymous.
The CCI said there was no merit in investigating some other allegations against the Google Pay app.
In a statement, Google said it was pleased that the CCI had rejected several allegations, and remained confident the watchdog will find Google Pay operates in an “extremely competitive environment”.
However, in its order the CCI said that Google Play Store’s in-app billing system – that will from March 31, 2022 force app developers to use it and pay a 30% commission – should be investigated.
Google, whose Android operating system powers nearly 99% of India’s roughly 500 million smartphones, has faced criticism from several Indian startups in recent weeks who have publicly voiced concerns about the 30% commission they say is too high.
The mandatory use of Google’s payment system “restricts the choice available to the app developers”, the CCI said in its order.
Google’s statement said its billing system helps ensure its continued investment “in the many important things needed to make developers successful.”
The case is one of several antitrust challenges that Google faces in India, including a case on alleged abuse of dominance in the smart TV market as well as in its mobile Android operating system segment.”
US junk bond yields plunge to new record low
Rupee rises 10 paise against US dollar in early trade
The rupee mirrored the rise in stocks this morning.
PTI reports: “The rupee appreciated by 10 paise to 74.05 against the US dollar in opening trade on Tuesday, as intense buying in domestic equities amid positive COVID-19 vaccine news strengthened investor sentiment.
Besides, constant foreign fund inflow and weak American currency also supported the local unit, forex dealers said.
At the interbank forex market, the domestic currency opened up at 74.04 against the US dollar, then edged slightly lower to 74.05 in early deals, a rise of 10 paise over its last close.
In the previous session, the rupee had settled 7 paise lower at 74.15 against the US dollar.
After touching its lifetime peak of 42,959.25 in the opening session, BSE Sensex was trading 216.15 points or 0.51 per cent higher at 42,813.58.
The broader NSE Nifty too claimed a fresh high of 12,557.05. Later, it was trading with 51.65 points or 0.41 per cent gain at 12,512.70.
Meanwhile, pharma major Pfizer has announced that its vaccine, as per preliminary estimates, is 90 per cent effective in preventing COVID-19.
The analysis evaluated 94 confirmed cases of COVID-19 in trial participants, it said.
Positive news on the vaccine also helped investors eye risky assets.
“News of encouraging results (90 per cent of symptomatic infections) on coronavirus vaccine front from trials conducted by Pfizer fuelled a major rally in risk assets,” Abhishek Goenka, Founder and CEO, IFA Global, said.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.05 per cent to 92.66.
Foreign institutional investors remained net buyers in the capital market as they purchased shares worth Rs 4,548.39 crore on Monday, according to provisional exchange data.
Meanwhile, Brent crude futures, the global oil benchmark, fell 0.90 per cent to USD 42.02 per barrel.”
Coffee Day Global revenue drops 12%
Coffee Day Global, the coffee business subsidiary of Coffee Day Enterprises, posted a retail revenue of ₹1,270 crore during fiscal ended March 31, 2020, reporting a year-on-year decline of 12%. During the period, the company posted a net loss of ₹319 crore, as per a regulatory filing of the company on Monday.
In the fourth quarter, Coffee Day Global’s retail net revenue stood at ₹272 crore, down 22% yoy and net loss at ₹80 crore. March- ended fiscal also saw its cafe outlets reduce to 1,192 from 1,752 a year ago while the number of its coffee vending machines has increased to 58,697 from 56797 in the previous year.
Indian shares hit record highs on vaccine cheer
The good news keeps in pouring in for stocks.
Reuters reports: “India’s main stock indexes hit record highs on Tuesday as progress in the development of a coronavirus vaccine raised hopes of a global economic recovery and helped airline and hotels stocks that have been hammered by the pandemic.
The NSE Nifty 50 index rose 0.7% to 12,553.7 by 0512 GMT and the S&P BSE Sensex gained 0.85% to 42,60.09, led by banking and financial stocks.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.12% higher on news that Pfizer Inc’s experimental COVID-19 vaccine showed over 90% effectiveness based on initial trial results.
The U.S. drugmaker’s Indian arm Pfizer Ltd gained as much as 19.8% during the session.
“The vaccine news is a big relief for markets and investors are hoping that the economic recovery will take place sooner,” said Samrat Dasgupta, chief executive officer at Esquire Capital Investment Advisors.
“However, the next six months will be crucial as we see more developments on the vaccine.”
Stocks of IndiGo owner InterGlobe Aviation rose 5.3%, while hotel operators EIH Ltd and Lemon Tree jumped more than 5% each.
Investors hoped that the vaccine would help the travel and hospitality sectors return to normalcy after facing restrictions because of the coronavirus lockdowns, Esquire Capital’s Dasgupta said.
Among other sectors, the Nifty Bank index and the financials index climbed 2.4% each, rising for a seventh consecutive session.
Bajaj Finance gained 4.5% to top the gainers among the Nifty. Lenders ICICI Bank and IndusInd Bank added 3.8% and 4.6%, respectively.
Natural gas explorer GAIL (India) was up 2.3% ahead of its earnings scheduled for later in the day.
The Nifty IT index was the top drag among sectors and fell 2.8%. Tech Mahindra slid about 4%, while Infosys and HCL Technologies slipped around 3% each.”
Amazon Prime Video forays into live sports; bags India rights for New Zealand cricket
Amazon Prime Video on Tuesday announced its debut into live sports in India by acquiring the India territory rights for the New Zealand Cricket through 2025-2026.
With this announcement, Amazon Prime Video becomes the first Indian streaming service to secure exclusive live cricket rights from a major cricketing board.
The multi-year deal between Amazon and the New Zealand Cricket Board will give Prime Video the right to stream all international cricket matches to be played in New Zealand for both men’s and women’s cricket, across ODI, T20 and Tests formats starting late 2021.
The deal also includes Team India’s tour of New Zealand in early 2022, and a second tour, the dates for which will be announced later. The rights for 2020-2021 season starting later this month is intended to be syndicated by Amazon.