Indian equities rise for third straight trading session on positive cues
Indian equities advanced for the third session in a row, led by gains in beaten-down information technology stocks, with investors taking cues from the rebound in the Nasdaq. Sentiment in Asian markets lifted on reports that China may ease Covid restrictions in Shanghai. The Nifty ended 1.89 percent to 16,661.40 points and the benchmark Sensex rose 1.9 percent to 55,925.74 percent. The Nifty IT index rose as much as 3.9 percent.
Why it’s important: The recovery was partly driven by easing commodities prices, analysts said. The early onset of the southwest monsoon also lifted sentiment.
LIC profit drops 18 percent in fiscal fourth quarter, declares first dividend
The March quarter profit at Life Insurance Corporation of India fell 18 percent from a year ago. Quarterly profit fell to Rs 23.72 billion in the fiscal fourth quarter, compared to net profit of Rs 28.93 billion in the corresponding period of the previous fiscal year. The insurer declared a dividend of 15% for the first time.
Why it’s important: Profits declined on higher expenses and bonus payments to policyholders in the insurer’s first earnings release as a publicly traded company. LIC was listed at a discount two weeks ago and had been slipping ever since.
Competition watchdog probing deals between ecommerce firms and preferred sellers
The investigation arm of the Competition Commission of India is reviewing documents that suggest financial dealings between ecommerce companies and their preferred sellers. It has sought more time to review these documents, found during the raids last month.
Why it’s important: The investigation follows allegations of violation of competition law by ecommerce giants Amazon and Flipkart. The probe could open a can of worms and led to regulatory action.
Vodafone Idea in talks with Amazon, others to raise Rs 200 billion
Amazon and a clutch of investors are in talks with the Aditya Birla Group to invest up to Rs 200 billion in struggling telecom operator Vodafone Idea. The proceeds of the sale will be used to bid for the upcoming 5G spectrum auction and capital expenditure for the rollout of services by the end of the year. Besides Amazon, the group is also talking to private equity investors.
Why it’s important: Vodafone Idea is not out of the words yet. However, investors could be interested in putting money in the firm after the government took steps to help the telecom sector.
ShareChat raises $300 million in funding round led by Google
Mohalla Tech, the parent company of ShareChat, has raised nearly $300 million in fresh funding from Google, Times Group and Singapore’s Temasek Holdings, valuing the social media firm at nearly $5 billion. A deal is set to be announced next week.
Why it’s important: Investors see huge business potential in the short videos space in India as smartphone penetration rises in the country and data costs remain low.
India’s domestic crude oil production slips to 28-year low in 2021-22
Domestic crude oil production in India has been declining since 2014-15 financial year, dropping to just 28.4 million tons in 2021-22, the lowest since 1993-94. The production in 2021-22 represented a decline of 11.8 percent from 32.2 million tons in 1994-95.
Why it’s important: The decline in production is increasing the Indian economy’s vulnerability due to rapidly rising global crude oil prices. Production has been declining because of ageing oil wells and the absence of fresh investment.
Overseas investors kept selling equities in May to the tune of $4.6 billion
Foreign portfolio investors sold a net of Indian equities worth over $4.6 billion (Rs 350 billion) in May so far, the highest in emerging markets. This flow included activity both in secondary and primary markets. On stock exchanges, overseas investors pulled over Rs 410 billion out of local stocks, the highest in a month since March 2020, when they had sold shares worth Rs 570 billion amid the pandemic lockdown.
Why it’s important: The outflows from India were highest among the emerging markets due to concerns over a possible recession in the US, rising interest rates and a strong dollar.
Domestic firms continue to buy equities with record purchases in May
Domestic funds have continued their support to stocks by deploying record cash in May. Local fund managers have invested Rs 328.26 billion in May so far, the highest ever monthly investment, and nearly double the average of the last 12 months, data from the Securities and Exchange Board of India showed.
Why it’s important: Local funds have been net buyers of equities for the 14th month in a row. This has helped the market stay in positive territory despite the volatility.
India should subsume fuel taxes in GST regime: Bibek Debroy
Subsuming crude oil and fuels, which attract excise duty and value-added taxes, into the GST regime was desirable in terms of tax reform and will aid in inflation management, according to Bibek Debroy, chairman of the Prime Minister’s Economic Advisory Council.
Why it’s important: Such a step is unlikely in the present scenario in the country as the tax on fuel has become a subject of debate between political leaders at the central and state levels.
Registration rules for GST to be eased for online sellers
Small online sellers may soon be exempted from having to register for GST. Currently, physical sellers need GST registration only if they have annual sales of more than Rs 4 million, while all online sellers compulsorily need GST registration, irrespective of turnover.Why it’s important: This development would mark a structural shift in India’s five-year-old indirect tax regime. Such a move would surely expand the potential reach of small enterprises through e-commerce.