Morning Scan: All the big stories to get you started for the day

A round-up of top newspaper stories

India’s benchmark gauges recouped almost all the losses made a day earlier after dovish comments from US Federal Reserve officials and prospects of more economic stimulus by China. The Sensex gained 0.9 percent to 66,079 points, while the Nifty rose by a similar margin to 19,690. The broader markets rose higher, with the Nifty Midcap100 and Nifty Smallcap100 surging 1.4 and 1.2 percent, respectively.

Why it’s important: The bounce back notwithstanding, worries remain that crude prices will jump as the war between Israel and Hamas escalates. Markets are expected to remain volatile in the short term.

The International Monetary Fund in its latest World Economic Outlook has increased its 2023-24 growth forecast for India to 6.3 percent from its July estimate of 6.1 percent, citing stronger-than-expected consumption during the June quarter. The agency expects global growth of 3 percent in 2023 and 2.9 percent in 2024.

Why it’s important: Private consumption expenditure, a proxy for demand, increased 6 percent in the June quarter and could rise even further on festive season sales. GDP growth remains robust in the country.

Net direct tax collection in India increased by 21.82 percent to over Rs 9.57 lakh crore till October 9, helped by good inflow from both corporates and individuals, the finance ministry said. Net collections have reached 52.5 percent of the budget estimate of Rs 18.23 lakh crore. Gross direct tax collections stood at Rs 11.07 lakh crore, which is 17.95 percent higher than a year ago.

Why it’s important: There is every chance that direct tax revenues will exceed budget estimates for the year to March despite moderate growth in corporate tax collection.

Blackstone has begun discussions with the Walt Disney Company to evaluate buying the media giant’s India streaming and television business. The private equity firm is exploring either buying the business partially including a combination of assets including sports properties and media rights, and the Disney+ Hotstar streaming service, or the whole portfolio that also includes its TV franchise such as Star India TV network and a 30 percent stake in Tata Play.

Why it’s important: Walt Disney has been struggling to put up a good financial performance. It remains to be seen whether a deal with Blackstone goes through as current valuations look quite steep.

Differences within the Hamied family, promoters of drugmaker Cipla, over the pricing of the deal and the decision of patriarch Yusuf K. Hamied to sell the firm may threaten to derail the $7 billion sale plan. Any sale may take longer than anticipated since a consensus is yet to emerge within the Hamied family. Some family members have questioned the deal’s pricing of Rs 1,200 per share and the decision to exit the business.

Why it’s important: The younger generation within the family is reluctant to let go of the business unless there is a higher premium to their shareholding. They could scuttle the deal as family members have the right to first refusal.

The board of Religare Enterprises has commissioned an independent valuation report because it believes that the company is worth more than the price the Burman family has offered. The Burman family, which owns Dabur, offered to acquire an additional 5.27 percent stake in the financial services company for Rs 407 crore, leading to a mandatory open offer to buy an additional 26 percent stake from the public.

Why it’s important: The deal is not closed and is awaiting regulatory approval. The current management of the professionally run company wants to retain control, which might not sync with plans of the Burmans.

Sales of FMCG items saw a significant recovery in September after a double-digit decline in August, according to Bizom data. Kirana stores in rural areas stocked up in preparation for the festival season that began in September. Combined with rainfall reaching 113 percent of the long-period average for the month, this contributed to a boost in sales.

Why it’s important: FMCG companies are expected to further push inventory at retailers as the festive season picks up pace, hoping to capture a larger portion of the heightened demand during Diwali.

India and the UK are likely to sign a free trade agreement in the last week of this month. Trade negotiators met in London last week to finalize the contours of the pact. Commerce and industry ministry officials have made a presentation to the Prime Minister’s Office on the agreement. India has invited British Prime Minister Rishi Sunak to visit India on October 28 and ink the ambitious pact.

Why it’s important: It will be New Delhi’s first comprehensive deal with an advanced economy, which seeks to boost bilateral trade beyond the current $20 billion a year.

The Enforcement Directorate has arrested four persons, including the managing director of Lava International mobile company and a Chinese national, in connection with a money-laundering probe against smartphone maker Vivo. The directorate said in its remand papers before a local court that the alleged activities of the four enabled Vivo India to make wrongful gains.

Why it’s important: India’s crackdown on Chinese companies continues with the latest arrests. The financial crimes agency has termed activities at Lava and Vivo as detrimental to India’s economic sovereignty.

Indian companies are keeping a close eye on the war developments in Israel and monitoring the safety of their employees in the West Asian innovation hub. Executives at Indian firms with employees in the conflict-ridden nation said they are advising employees to stay safe and stay away from trouble spots.

Why it’s important: There are indications that the conflict between Israel and Hamas may escalate. Whether it comes to evacuating Indian citizens from that country remains to be seen.