Indian stock markets show resilience despite hawkish tone by US Fed
Indian equities closed weak marginally, avoiding the sharp overnight selloff on Wall Street after the US Federal Reserve squashed hopes of easing monetary tightening anytime soon. The benchmark Sensex closed at 60,836. 41, down 0.11 percent, and the 50-share Nifty declined 0.17 percent after losing more than 100 points at opening. Both gauges oscillated between gains and losses for most of the session. Major Asian shares also showed resilience amid the latest Fed hike.
Why it’s important: Foreign investors have not been selling Indian equities as much as earlier, thus firming up the market. Equities might not rise much further but markets expected to be volatile in the short term.
Retail loans surge 20 percent in September on festival spending
Retail loan growth rose 20 percent in September, the fastest since the covid outbreak in 2020. Loan demand was seen across categories for purchases of vehicles, consumer durables and homes. Home loans, which account for nearly half of all retail loans, grew 16 percent to Rs 18.05 lakh crore between 24 September 2021 and 23 September 2022, Reserve Bank data showed. The other personal loans category, which accounts for 26 percent of total bank loans to individuals, grew an even faster 24.4 percent to Rs 9.73 lakh crore till 23 September.
Why it’s important: The growth in individual loans came despite higher borrowing costs, indicating a robust revival in consumer demand during the festive season.
Online retailers likely to need consumer approval before sharing data
The central government is likely to ask e-commerce companies to seek the consumer’s approval before sharing her personal data. The consumer affairs ministry is working on a detailed set of guidelines regarding seeking consent on data sharing, which will come as part of the much-awaited Consumer Protection (E-commerce) Rules. Besides from the consent factor, e-commerce companies will have to adhere to the personal data protection law, which is being rewritten by the electronics and IT ministry.
Why it’s important: The mandatory consent would help protect a person’s privacy as well as prevent the misuse of information or unauthorized sharing.
European financial regulators disqualify six main Indian counterparties
All European banks in India have been thrown into confusion and are knocking on the doors of the regulators because the European Union financial markets authority and the Bank of England have in the past 48 hours derecognized some of the key institutions like Clearing Corporation of India, NSE Clearing Limited and Indian Clearing Corp through which high volumes of trades on foreign exchange, derivatives, government bonds and securities are settled.
Why it’s important: The disqualification is a result of a standoff between European and Indian regulators. Unless it is resolved, European banks will either need prohibitively high capital requirements or unwind from their existing positions.
Indian electronics companies in joint venture talks with Chinese firms
Domestic companies, including electronics manufacturing services firm Dixon Technologies and mobile device maker Lava International, have started talks with Chinese subassemblies and component firms for setting up joint ventures in the country. Many domestic companies have also had preliminary discussions with original design manufacturers in China to look at joint ventures to manufacture smartphones.
Why it’s important: The developments come after the central government reassured industry stakeholders that there was no ban on Chinese companies, and Indian firms could seek joint ventures with them in key areas of technology. This could lead to higher business growth in local electronics sector.
Indorama joins race to acquire control of PET filmmaker Polyplex
Thailand’s Indorama Ventures has joined the race to acquire control of Noida-based packaging materials maker Polyplex Corporation. The company has also seen interest from Bain Capital and CVC. Polyplex, which had a market value of Rs 5,435 crore, is seeking a valuation of $1 billion, including debt. Polyplex had earlier sold its PET resin plant near Istanbul in Turkey to Indorama Ventures in 2015.
Why it’s important: The promoters of Polyplex, the fifth largest producer of polyester films in the world, are facing succession issues and want to capitalize on investor interest in India’s packaging sector.
Private equity firms Blackstone and Advent in discussions to buy stake in Suven Pharma
Private equity investors Blackstone and Advent International are in separate talks with Suven Pharmaceuticals to buy a controlling stake. The promoters are looking to sell at least half of their stake in the firm, which will trigger an open offer for 26 percent of the public shareholding. Suven Pharma has a market value of Rs 6,378 crore. The sale of at least half of promoter shareholding will make the deal size over Rs 3,000 crore, followed by the open offer, which could see the buyer spend an additional Rs 1,600-1,700 crore.
Why it’s important: There has been high investor interest in India’s pharma and healthcare sectors. Advent has been aggressively buying Indian pharma companies over the past two years. For Blackstone, this could be the first attempt to buy a pharma company.
India’s services activity picks up pace in October no fresh contracts
Services activity in India saw another upturn in October, according to the seasonally adjusted S&P Global India Services PMI Business Activity Index, which rose to 55.1 in October from September’s six month low of 54. 3. October was the fifteenth consecutive month of growth in services sector activity.
Why it’s important: The growth led by stronger gains in new business and increased hiring amid strengthening demand. It indicates a quicker and marked rate of expansion.
iPhone maker Wistron becomes biggest investor in production-linked incentive scheme
Wistron InfoComm, the local arm of one of the largest iPhone contract makers, emerged as the single biggest investor under the government’s production-linked incentives scheme for large-scale electronics manufacturing, bringing in Rs 1,250 crore. Wistron was followed by the domestic units of Samsung and Foxconn, investing Rs 900 crore and Rs 650 crore, respectively. The scheme has attracted a total of Rs 4,200 crore in investments.
Why it’s important: Investment and production under the scheme could surge further as the 5G rollout is expected to create high replacement demand for smartphones.
Hero electric to invest Rs 2,500 crore to produce 4 million two-wheelers by 2026
Hero Electric will invest Rs 2,500 crore to build additional capacity of about 4 million electric two-wheelers by 2026. The first stage of investment will roll out this year for a new factory in Rajasthan, where vendor units will invest another Rs 400 crore. In the second stage, it is scouting for a location of a plant in southern India. Both factories will be of equal size and investment. The company currently has the capacity to manufacture 500,000 vehicles.
Why it’s important: The electric two-wheeler market in India is approaching an inflexion point, beyond which demand is expected to rise rapidly. Hero wants to capitalize on that.
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