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

Indian stock markets rise to three-week high on positive global cues

Indian equities jumped 1 percent on Tuesday to their highest in three weeks due to the positive undertone in global markets spurred by the rollback of the fiscal stimulus by the UK. The benchmark Sensex ended at 58,960.60, up 0.94 percent. The 50-share Nifty gained 1.01 percent, crossing a key hurdle of 17,400 points to end the day at 17,486.95. Most Asian indices rose 1-2 percent, while averages in Europe and the US were up 0.9 percent.

Why it’s important: The Volatility Index for Indian markets has dropped, indicating that traders see lower risks of a downside to the market in the near term. It means investors will be buying on dips in stocks as well as indices.

Government raises wheat support price by 5.46 percent; lentils, mustard see higher increases

The central government has hiked the minimum support price for six mandated crops, raising the price for whole wheat by 5.46 percent. The new MSP for wheat will be Rs 2,125 per quintal compared with Rs 2,015 per quintal earlier. The MSP for mustard is now higher by about 8 percent to Rs 5,450 a quintal, and that of masur dal by over 9 percent to Rs 6,000 a quintal. Prime Minister Narendra Modi said the hike will further energize the farm sector.

Why it’s important: Current wheat prices are much higher than the revised MSP. During the spring harvest, farmers preferred to sell to private entities, leading to an almost 57 percent decline in official procurement. As demand for cereals remains high, a similar trend is likely after next year’s harvest as well.

Dollar returns from Nifty in the past decade higher than leading global indices

Dollar returns of the National Stock Exchange’s Nifty have outshone major global indices, including Germany’s Dax, the UK’s FTSE, Hong Kong’s Hang Seng, and China’s Shanghai Composite Index over the past decade. In the 10 years to mid-October, Nifty returns stood at 124 percent against 54.5 percent for the Dax and 33.8 percent for Shanghai Composite. The UK’s FTSE and Hang Seng generated negative returns of 8.4 percent and 12.8 percent, respectively. Only the US market delivered higher returns than the Nifty, is primarily because of the strong dollar.

Why it’s important: As there’s ample quantitative evidence that Indian stocks are outshining major global markets over a sustained period of time, overseas investors can’t afford to ignore India if they want world-beating returns.

M&A activity in India hits new record despite global slowdown in dealmaking

The volume and value of mergers and acquisitions in India has hit new records, defying a global slowdown in dealmaking. Deal value in India rose 58 percent to $148 billion in the nine months to 30 September from $93.5 billion in the year earlier, according to Refinitiv data. It exceeded the full-year figures of $127.6 billion in 2021 and $132.2 billion in 2018. The value was boosted by large transactions like the $60 billion merger of HDFC Bank with HDFC, the $7.1 billion merger of L&T Infotech and Mindtree, and the $6.2 billion acquisition of Ambuja and ACC by Adani. As many as 1,795 deals were struck in nine months, up 21 percent from 1,490 in the same period last year.

Why it’s important: M&A activity in India had seen a consistent upward trend. The Indian M&A market could soon cross $200 billion a year on reasonable valuations, large pools of capital with private equity investors and return of foreign strategic investors.

Corporate top brass saw salary hikes of 4 percent in last fiscal year

CEOs of major Indian companies took home an average 4 percent higher compensation in 2021-22, a moderate increase from the pre-pandemic period. The average rise in compensation of CEOs and managing directors in the previous financial year was a little higher than the 1 percent rise seen in 2020-21, but less than the pre-Covid average hike of 7.5 percent in fiscal 2019-20, according to an Economic Times analysis of 220 of the BSE 500 companies.

Why it’s important: There is an increasing trend in India of linking CEO salaries with outcomes and performance, according to nomination and remuneration committee members at blue-chip firms. CEO salary increases will continue to be moderate on the rising risk of recession in the West.

Japan to continue lending to Delhi Metro despite financial concerns

The Japan International Cooperation Agency, which has been lending to Delhi Metro Rail Corporation since its inception, will continue to consider upcoming metro corridors despite the financial trouble the Metro is facing. JICA is considering the upcoming three corridors under the fourth phase of DMRC’s expansion in the national capital region. Estimated to cost around Rs 24,000 crore, the fourth phase looks to connect several gaps in the city’s transport infrastructure.

Why it’s important: the Delhi Metro has in a recent legal submission said it was reeling from a financial crisis, mainly due to mobility restrictions during the pandemic. Its financial viability is likely to increase as footfalls rise post pandemic.

Government to address concerns of telecom regulator in dilution of authority

The Department of Telecommunications will seek to address Telecom Regulatory Authority of India’s concerns of a possible dilution of its powers by some provisions of the draft telecom bill. The regulator is concerned about some clauses in the bill, including ones that seek to give DoT overriding powers on issues relating to tariffs and quality of service. Currently, these issues fall within Trai’s purview.

Why it’s important: The government is seeking to downplay the prospects of a conflict between the telecom department and the industry watchdog, which is expected to share its concerns with the department.

Energy transition, smart cities make India a key market, says Siemens chief

Germany’s Siemens AG is well-positioned to play a key role in India’s rapid urbanization and energy transformation, according to Matthias Rebellius, chief executive of smart infrastructure at the Munich-headquartered company. The conglomerate will continue investing in India investment, having already spent ₹1 billion in the past five to six years on manufacturing facilities and business expansion.

Why it’s important: The stance of Siemens is in line with other giant multinationals that see a huge opportunity as India grows its cities and transitions to greener energy options in the coming decade.

Air India chief says running in joint venture mode remains a big challenge

Running an airline in a joint venture is more challenging, especially when it comes to issues related to capital contribution by each of the partners, Air India chief Campbell Wilson said in an interview. Vistara, which is a 51:49 partnership between Tata Sons and Singapore Airlines, has been making losses since its launch in 2015.

Why it’s important: The comments come after indications that the Tata group might merge Vistara wit Air India to achieve economies of scale and challenge market leader Indigo. SIA is expected to dilute its stake, giving Tata more say in running operations.

Cricket regains its footing on TV after worrying viewership fall during IPL

Cricket has regained its footing on television after a dip in viewership during the Indian Premier League, with Asia Cup and India’s series with Australia and South Africa keeping fans interested. Both Asia Cup 2022 and the Australia tour had 13 percent more viewers than similar series in the past, while the South Africa series had 30 percent more viewers than when the two teams played in June, according to BARC data.

Why it’s important: Many large consumer facing companies in India make large advertising investments during cricket matches. They will heave a sigh of relief if viewership climbs after fan fatigue during the IPL.