Markets hit fresh highs on positive global cues

Mumbai : Ahead of the long weekend, the key Indian equity indices finished at new highs, after logging fresh gains during intra-day trade, riding on broadly positive global cues and healthy buying in the IT, auto and capital goods stocks. On the National Stock Exchange (NSE), the wider Nifty50 index crossed the 10,500 mark for the first time on an intra-day basis. The index edged higher to a new intra-day level of 10,501.10 points, crossing its previous intra-day high of 10,494.45 points scaled on December 20. On a closing basis, the Nifty50 rose by 52.70 points or 0.50 per cent to a fresh high of 10,493 points, surpassing its previous closing high of 10,463.20 points scaled on Tuesday.

Meanwhile, the barometer 30-scrip Sensitive Index (Sensex) touched a fresh high of 33,964.28 points on an intra-day basis, surpassing December 20’s intra-day high of 33,956.31 points. On a closing basis, the Sensex scaled a new high of 33,940.30 points — up 184.02 points or 0.55 per cent from its previous close – surpassing the December 19 closing high of 33,836.74 points.

The BSE market breadth remained bullish as 1,564 stocks advanced as compared to 1,184 declines. “Markets surged higher on Friday after two sessions of negative closings. Positive Asian markets helped to perk up the sentiments as the Nifty touched the 10,500 mark for the first time ever,” Deepak Jasani, Head, Retail Research, HDFC Securities, told IANS.  The broader market indices also touched fresh intra-day highs. On a closing basis, the S&P BSE mid-cap index was up by 0.11 per cent and the small-cap index by 0.58 per cent. “Market enthusiasm continued on the eve of Christmas with Nifty crossing 10,500 on intra-day basis. Nifty as well as Sensex scaled new highs,” Anita Gandhi, Whole Time Director, Arihant Capital Markets, told the news agency. “Investors were happy with Infosys buyback money credited and sentiment in the stock also improved taking it to 52-week high. Metals and realty sector also did well.” Gandhi added that optimism was expected to continue due to expectation of net asset value (NAV) based buying till December end. Shares of IT major Infosys rose by almost 2.2 per cent to Rs 1,044.20 per share during the day’s trade. Vinod Nair, Head of Research, Geojit Financial Services, said: “Passage of US tax reform bill aimed at reducing the corporate tax rates and strong US Q3 GDP growth of 3.2 per cent led rally in global markets which was extended to domestic market and Nifty hit an all time high of 10,500. The expectation of a good budget and strong H2FY18 earnings is supporting this rally. IT sector was the outperformer today due to big order win by IT major Tata Consultancy Services (TCS). Weak crude prices and strong rupee supported the sentiments.” On the currency front, the Indian rupee closed flat at 64.05 against the US dollar from its Thursday’s close.

   Provisional data with the exchanges showed foreign institutional investors (FIIs) purchased scrips worth Rs 107.87 crore while domestic institutional investors purchased stocks valued at Rs 371.53 crore. Sector-wise, the S&P BSE capital goods index rose by 176.19 points, IT index by 144.29 points and auto index by 115.40 points. On the other hand, the BSE S&P consumer durables index declined by 132.18 points, metal index slipped 8.66 points and realty index was a tad lower by 0.01 points, reports PTI.

Flashback 2017: Year of turmoil for telecom industry, with bleeding balance-sheets under GST shadow

New Delhi: It was a year of turmoil for the hyper-competitive Indian telecom sector as the balance-sheets of many major players kept bleeding, prompting the government to form an panel to chalk out plans to bail out firms.

Reliance Industries’ Jio continued to disrupt the market with its free or low-priced offers while three or four majors fought for the telecom pie tooth and nail. Despite assurances to the sector, the central government’s policy did not help: the Goods and Services Tax (GST) hiked the tax on the sector from 15 per cent to 18 per cent.

Also, the Telecom Regulator Authority of India (TRAI) reduced the Interconnection Usage Charges (IUC) to 6 paise from 14 paise per minute from October 1, 2017, putting additional pressure on the incumbents.

However, a few mergers and acquisitions in the sector sparked hopes of a better tomorrow as consolidation would help the majors to cope with challenges better, even as the cumulative debt of telcos rose to around Rs 4.6 lakh crore and the revenues fell. The sector’s adjusted gross revenue fell to Rs 30,759 crore for the quarter ending September 2017 — a year-on-year decrease of 18.1 per cent.

“This is a consequence of a number of developments over the years, including the entry of new operators in 2009 and the voice tariff war. This was followed by expensive auctions for spectrum (2016), needed by the telcos to offer communications services,” Rajan S. Mathews, Director General, Cellular Operators’ Association of India (COAI), told IANS.

“In 2018, consolidation in the sector is likely to take shape and the telcos will get the benefit of synergy in operations and the overall costs are likely to come down. Eventually, pricing power could also return, enabling longer-term sustainability overall,” he added.

However, Mahesh Uppal, Director of consultancy firm Com First, feels competition from Reliance Jio would continue to hurt margins of the incumbents.

“With Jio guaranteeing free calls to its subscribers, other players will find it difficult to sustain revenues from voice calls. They will be forced to do the same. They will then compete aggressively in the market for data services, especially by providing larger data packs at even cheaper prices. It is not clear whether players will compete more vigorously on quality of service. This might take more time,” Uppal told IANS.

But Amresh Nandan, Research Director, Gartner, said Jio’s disruption with free voice and data offers would eventually subside and become normal.

“Beyond a point, quality and reliability of service matter most. As that takes centre-stage, which has started to happen, free or even discounted services won’t help. If Jio comes up with products beyond connectivity — that enables greater interaction and transactions for consumers with necessary quality and reliability, then the competitive scenario may change,” he said.

Talking about mergers and acquisitions, Uppal said the sector was in the process of reaching an optimal number of players. “I expect the eventual survivors to be Airtel, Jio, the combination of Idea and Vodafone and the government-owned MTNL-BSNL,” Uppal said.

Nandan said mergers and acquisitions were good for the market from the economic perspective.

“Four telcos are dominant in the market and it should lead to a better scenario. However, real value from these deals will take time. These M&As are yet to reach operational culmination, which in itself will shake-up things a bit more,” he added.

“As far as consolidation is concerned, no market in the world has more than five telecom operators, but in India, there were more than 10. In 2018, the Bharti Airtel-Tata Teleservices-Telenor combine and the Idea Cellular-Vodafone combine would take shape,” said Mathews.

The country saw almost 40 per cent jump in 10 months in the number of wireless broadband users from 217.95 million at the end of December 2016 to 322.18 million users at the end of October 2017.

The regulator also came up with recommendations on net neutrality during the year, largely in agreement with suggestions made by the industry on “no blocking, no throttling, no fast lanes”, while allowing reasonable traffic management.

However, according to Mathews, the industry was disappointed that the authority did not adopt their recommendation “to have a wider approach to net neutrality, where issues of OTT (over-the-top) players, definition of net neutrality to include issues around connecting the next one billion unconnected users and national development priorities.”

The industry is now awaiting norms for in-flight connectivity, which is scheduled to come from the regulator by the year end.

The highlights of the year were:

** Announcement of merger of Vodafone India and Idea Cellular

** Airtel’s MoU with Tata Teleservices & Tata Teleservices Maharashtra to merge their Consumer Mobile Businesses

** JioPhone’s digital empowerment of 50 crore feature phone users at an effective price of zero

** Reliance Communications completion of merger with MTS

The telecom buzzword for 2018 appears to be 5G — smarter, faster communication. But that’s going to take around two to three years for full deployment.

Assembly Elections 2017: Sensex eyes higher ground as BJP pulls ahead in Gujarat poll

Mumbai: The stock market today inched closer to the all-time intra-day high as the BJP sniffed victory in Gujarat and also stayed on course to take power from the Congress in Himachal Pradesh. According to trends available on the Election Commission’s website, the BJP is leading in 101 of the 182assembly segments in Gujarat. As for Himachal Pradesh, it is leading in 40 seats as against the Congress’ 21.

The 30-share BSE index hit a high of 33,724.08 at 1152 hrs, a gain of 261.11 points — 0.78 percent. The reading is closer to the all-time high 33,865.95, reached on November 7. For the 50-share Nifty, the reading was above the key10,400-mark at 10,415.50, up 82.25 points, or 0.80 percent. Early in the beginning of the session, the benchmark BSE Sensex had tanked as much as 867 points to breach below the psychological 33,000-mark while the NSE Nifty plunged 258points within one hour of counting of votes.

However, evolving equations showed that the BJP is pushing ahead in both the states. Metal, auto, healthcare, realty, and banks all showed up in the green. The big mover was M&M 2.93 percent, with SBI and Adani ports closely following the leader. Foreign portfolio investors (FPIs) net sold shares worth Rs 921.03 crore last Friday. But domestic institutional investors (DIIs) offloaded equities to the tune of Rs 635.44crore. Asian stocks were mixed. US stocks rose to all-time highs last Friday, as prospects of the passage of a Republican tax bill increased.

Apple hikes iPhone prices in India post-customs duty hike

New Delhi, After the government hiked the customs duty from 10 per cent to 15 per cent for mobile handsets last week, Apple on Monday became the first manufacturer to raise prices (on MRP) across iPhone models, except iPhone SE that the company assembles in the country.

“As expected, Apple has increased the iPhone prices. The interesting thing now is to see how the Indian Apple community react to this,” Tarun Pathak, Associate Director, Mobile Devices and Ecosystems, Counterpoint Research, told IANS. iPhone X lovers will have to shell out Rs 92,430 for the 64GB variant, which was earlier available for Rs 89,000. The 256GB variant will now cost Rs 1,05,720 from the earlier price of Rs 1,02,000.

An Apple official had told IANS last week that the government’s decision to hike the customs duty from 10 per cent to 15 per cent for mobile handsets, is a statutory industry-wise hike. The iPhone 8 will now be available for Rs 66,120 (64GB variant) and Rs 79,420 for the 256GB variant. The iPhone 8 Plus will cost Rs 75,450 for 64GB variant and Rs 88,750 for the 256GB varient.

The Cupertino-based iPhone maker is also seeking tax relief and other incentives from the government to begin assembling more handsets in the country. Industry analysts had said that Apple had two choices after the customs duty hike — either to increase the prices or start assembling more in the country.

Apple is currently assembling iPhone SE model at its Bengaluru facility with Wistron Corporation, its Taiwanese manufacturing partner. Domestic and some China-based manufacturers will not be affected as much as most of them are assembling a lot in the country and just need to rev up their assembly lines, Pathak added.

More skyscrapers built in 2017, than any other year in history: Report

Washington: More skyscrapers were built in 2017 than during any other year in history, according to a report released by the Council of Tall Buildings and Urban Habitat (CTBUH).

A total of 144 buildings measuring 656 feet or taller were completed in the world this year, up on 2016’s record by more than 13 per cent, CNN quoted the report as saying on Wednesday. China dominated the list accounting for more than half of this year’s global total, with 77 of the structures located in 36 different cities, the Chicago-based CTBUH said in the report.

Of them, the southern metropolis of Shenzhen was responsible for the highest number of new skyscrapers. Topping the CTBUH’s list for the second consecutive year, the city saw the completion of 12 such buildings in 2017 — more than the entire US.   Shenzhen is also home to this year’s biggest new skyscraper, the 1,966-foot Ping An Finance Centre, now the fourth tallest building in the world.

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The city of Nanning in CGuangxi province, was ranked second, having completed seven new tall structures, while Chengdu tied with Indonesia’s capital, Jakarta, on five. The Chinese cities of Changsha and Wuhan were joined by New York, Toronto, South Korea’s Busan and the North Korean capital, Pyongyang, with four each.  But while the global trend is headed skywards, the market for high-rises is changing, according to Shawn Ursini, editor of the CTBUH’s Skyscraper Center database.

“Residential is taking up an increasingly big share of buildings measuring at least 200 meters in height,” he told CNN.   “If you go back to the latter end of the 20th century, you could almost assume that any building of that magnitude would be an office building.”  Of this year’s 10 tallest new structures, five have provisions for residential use, including Dubai’s 1,394-foot Marina 101.  A total of 23 countries were represented in the list, with places like Sri Lanka and Kenya completing buildings over 200 metres tall for the first time.

GDP growth to rise to 7.5% in 2018: Report

New Delhi : The Indian economy is expected to witness cyclical growth recovery, with real GDP growth likely to accelerate from 6.4 per cent this year to 7.5 per cent in 2018 and further to 7.7 per cent in 2019, says a report.

According to global financial services major Morgan Stanley, corporate return expectations and balance sheet fundamentals are improving, and a strengthening financial system should be able to meet investment credit demand. “This sets the stage for a fully fledged recovery in 2018, and we expect real GDP growth to accelerate from 6.4 per cent in 2017 to 7.5 per cent in 2018 and further to 7.7 per cent in 2019,” Morgan Stanley said in a research note. The global brokerage is confident about the prospects for a recovery in private capital spending as demand conditions are improving post demonetisation and the goods and services tax (GST) implementation.

  Besides, both consumption and exports are picking up and this in turn should lead to an improvement in corporate revenues. The “…plan to recapitalise the state-owned banks would remove the potential tail risk of the banking system posing a drag on growth, improve the headroom for growth and boost investors’ and domestic corporate sentiment,” Morgan Stanley said, adding “this should help to cement the growth acceleration and capex recovery that we were expecting”.

On prices, the report said the cyclical growth recovery and normalising food prices should drive a pick-up in headline inflation. “Against the backdrop of better macro outlook, we expect the Reserve Bank of India (RBI) to hike in the second half of fiscal 2019,” it noted.

The RBI in its fifth bi-monthly review for the current fiscal, on December 6, kept repo rate unchanged at 6 per cent and reverse repo at 5.75 per cent, citing pressure on prices. Furthermore, the central bank kept its growth projection for the fiscal year — gross value added (GVA) at 6.7% — unchanged from the bank’s October policy announcement.

Earlier in the month, Fitch  cut India’s GDP forecast for the ongoing financial year to 6.7 per cent, from the earlier projected 6.9 per cent. The credit rating agency cited weaker rebound as a reason behind the growth rate cut.

India is losing comparative advantage in export sectors

In a massive relief to Indian exporters, the government announced liberal incentives of Rs 8,450 crore ($1.3 billion) in its mid-term review of the five-year foreign trade policy (FTP) that was rolled out in 2015 and aimed at increasing the export of goods and services to $900 billion by 2020.

 Exports, meanwhile, declined from $468 billion to $437 billion between 2014-15 and 2016-17.

 In fact, India’s external trade performance has grown to be so acute that the current account deficit in the first-quarter of the current fiscal year reached a four-year high of 2.6 percent. What is more worrisome is that this trend is continuing despite favourable trade conditions in the global markets. Only domestic factors can explain the widening trade deficit. Clearly, the uncertainty surrounding the implementation of the Goods and Services tax (GST) has had a major role to play. Data due this month will show whether the situation has improved in the second quarter.

  However, the chances of any significant improvement remain bleak as issues in processing of refunds to exporters under GST has been affecting trading activities. Therefore, the sops given in the mid-term review should help in pumping up exports to an extent.

 Basically, labour-intensive sectors under the Merchandise Exports from India Scheme and Services Export from India Scheme, which were introduced in the FTP, were given an incentive raise of two percent each.

 Additional incentives of two percent are expected to boost the subdued export activity of the last few quarters. However, even though such an incentive was crucial in the short run given the circumstances, it always remains pertinent to ask if we are doing enough.

 After all, no country in history has sustained a growth rate of seven per cent without an export growth of 15 per cent or more and, according to World Bank (WB) data, Indian export growth of goods and services has not even crossed 10 per cent since 2011. Therefore, there seem to be larger structural issues at work that are impeding the growth of India’s external sector. A common argument made to improve India’s trade competitiveness is that the rupee is strong and needs to be depreciated to make exports competitive in the world markets. However, this argument falls flat in the face of recent trends in both the exchange rate and the real effective exchange rate over the last few months.

 Both of these indices have remained stable in the last fiscal and, in fact, fell slightly in August while exports continued to show a downward trend. There was not much strength in the argument anyway, since export competitiveness is not defined by currency but by productivity of the workforce. Indian policymakers need to recognise that the trade challenge for the country is structural in nature and cannot be done away with quick-fix solutions. Cost incentives are an acceptable approach to deal with immediate challenges like the impact of GST, but they need to be supplemented with more long-term solutions.

Jet Airway’s scrip dives after shaky Q2

New Delhi : Shares of Jet Airways settled down nearly five per cent on Friday on the bourses, eroding Rs 354 crore from its market capitalisation, after the private carrier reported weak September quarter earnings.

During the day, the shares of the company opened on a weak note on the BSE at Rs 668.90, then lost further ground to touch an intra-day low of Rs 662, down 4.98 per cent over its previous close. At the end of the trading session, the stock was quoted at Rs 665, down 4.47 per cent on the bourses. Following the decline in the stock, the market capitalisation of the company eroded by Rs 353.96 crore, to Rs 7,561.04 crore.

A similar movement was seen on the NSE, where the stock opened at Rs 669.40, and then declined to an intra-day low of Rs 662.10, down 4.97 per cent. The stock closed the day at Rs 666, down 4.42 per cent. The Naresh Goyal-owned airline posted a 91 per cent drop in standalone net profit at Rs 49.63 crore for the three months to September on account of a deep decline in other income. It had posted a net profit of Rs 549.02 crore in the same period of the previous fiscal.Total sales also declined to Rs 5,758.18 crore in the quarter under review from Rs 5,772.79 crore in the year-ago period, Jet Airways said in a regulatory filing on Thursday.

 Other income, which is generally the non-aeronautical revenue, came down 59 per cent to Rs 131.57 crore in the reporting quarter from Rs 319.58 crore in the year-ago period.

  “The weak demand in the Gulf continues while low fares as well as yields in the domestic market have limited the ability to offset the increase in fuel prices,” Jet Airways Chief Executive Officer Vinay Dube was quoted as saying in a release.

Sensex reclaims 33,000-mark, up 190 points

Mumbai: Benchmark BSE Sensex regained the key 33,000 mark at the start of trading today after buying by retail investors and domestic institutions gathered momentum amid strong global cues.

The broader NSE Nifty too went past the 10,200-level. The 30-share Sensex was trading higher by 190.36 points, or 0.57 per cent, at 33,139.57, with all sectoral indices in the green, led by consumer durables, bank, metal and auto. The gauge had rallied 352.03 points yesterday. The NSE Nifty too rose 60.65 points, or 0.59 per cent, at 10,227.35 in early trade today.

Brokers said unabated buying by retail and domestic institutional investors and a firm trend in other Asian markets influenced sentiment here. Prominent gainers included Tata Motors, Bharti Airtel, Adani Ports, ICICI Bank, Axis Bank, Maruti Suzuki, ONGC, HDFC Bank, HDFC Ltd, Bajaj Auto, Wipro, TCS, Cipla and SBI, gaining up to 1.68 per cent. Japan’s Nikkei was up 1.22 per cent while Hong Kong’s Hang Seng rose 0.57 per cent in early trade today. Shanghai Composite, however, shed 0.08 per cent. The US Dow Jones Industrial Average ended 0.29 per cent higher in yesterday’s trade.

Alibaba could invest $300m in BigBasket

Fund infusion gives online grocer more muscle to take on local rival Grofers, and helps the Chinese firm battle Amazon in India.

Mumbai : Chinese e-commerce major Alibaba will pump up to USD 300 million in online grocery firm, BigBasket, according to industry sources.The deal, which is expected to be announced in the next few weeks, will give BigBasket more muscle to compete against rivals like Grofers and e-tailing giant Amazon, they told PTI. The sources did not wish to be identified as the discussions are private.

  BigBasket declined to comment. Meanwhile, an Alibaba spokesperson said: “As a matter of policy, we do not comment on market speculation”. In November, the Chinese e-commerce firm had sought the approval of the Competition Commission of India (CCI) to acquire a stake in BigBasket.    Investing in BigBasket would help the NYSE-traded Alibaba take on its US-based rival Amazon in India. A deal will also help the Alibaba-backed payments bank Paytm further strengthen its presence in the Indian e-commerce space, PTI added.

  NASDAQ-traded Amazon has received the Indian government’s approval for its proposed USD 500 million investmwent in a food retail business. It is also ramping up its business in the segment with Amazon Pantry and Amazon Now.

 With people becoming comfortable buying even milk and bread online, the online grocery segment is projected to witness  strong growth over the next few years in India. According to a report by Franchise India, the online grocery market is expected to be a Rs 2.7 billion market by 2018-19. Founded in 2014, Gurugram-headquartered Grofers is backed by Tokyo-traded SoftBank and Sequoia Capital. BigBasket, founded in 2011, operates in Bengaluru, Hyderabad, Pune, Mumbai, Chennai, Delhi-NCR, Ahmedabad, Patna, Kolkata, Jaipur, Vijayawada, Indore, Punjab and Lucknow. The firm has raised over $200 million from the Abraaj Group, Bessemer Venture Partners, Growthstory, Helion Venture Partners, IFC and Sands Capital.

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