Nifty, Sensex looking Weak – Thursday closing report-The Total Investment & Insurance Solutions

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24 January 2019

I had mentioned in Wednesday’s closing report that if Nifty, Sensex might head lower if it breaks today’s low. The major indices of the Indian stock markets were range-bound on Thursday and closed with gains over Wednesday’s close. On the NSE, there were 584 advances, 1,119 declines and 354 unchanged. The major trends of the Indian stock markets are given in the table below:

Major Indices (The Total Investment & Insurance Solutions)

The Sensex declined and the Nifty traded marginally higher on Thursday over concerns of global growth and the ongoing earnings' season. Banking, auto and finance stocks declined while the export-oriented IT (information technology) sector gained as the rupee continued to gain for the second day. The rupee was last trading at Rs71.26 per dollar from its previous close of Rs71.34 as global crude oil prices soothed.

Globally, investors were cautious ahead of the vote on a bill that may end the partial US government shutdown. Foreign institutional investors sold Rs775.82 crore worth of stocks while domestic institutional investors bought Rs583.77 crore. 

Automobile major Tata Motors has launched its new SUV "Harrier" at a starting price of Rs12.69 lakh, ex-showroom Mumbai. According to the company, "Harrier" is powered by "Kryotec 2.0" Diesel engine, which is mated to a 6-speed manual transmission. Commenting on the launch, Tata Motors CEO and MD Guenter Butschek said: "With this product, Tata Motors has rightfully entered the premium mid-size SUV segment. The 'Harrier' is a strong proof point of our Turnaround 2.0 strategy and it will be a game changer in the market," Butschek said. "I am confident that with the 'Harrier', Tata Motors Passenger Vehicle Business Unit will continue to win sustainably in the times to come," Butschek added. Tata Motors shares closed at Rs175.55, down 2.61% on the NSE.

United Spirits Ltd reported Rs192 crore standalone net profit for the third quarter of fiscal 2018-19, registering 42% annual growth from Rs135 crore in the same period a year ago. Sequentially, net profit, however, declined 25.9% from Rs259 crore a quarter ago. In a regulatory filing on the BSE, the Indian arm of the British liquor major Diageo said standalone revenue from operations grew 8.8% annually to Rs7,764 crore from Rs7,137 crore in the like period a year ago and 8.9% sequentially from Rs7,128 crore a quarter ago. Earnings before interest and tax (Ebit) grew 70% yearly to Rs298 crore from Rs184 crore a year ago but declined 21.8% from Rs381 crore a quarter ago. "We delivered double-digit sales growth for a third consecutive quarter this year. Net sales grew 16% in the prestige and above segment and 11% overall, including the popular segment," said Chief Executive Anand Kripalu in a statement later. Though the company had a stable operating environment during the fiscal, it expects the general elections, due in April-May, to impact its sales in the first quarter of fiscal 2019-20. "We will, however, make progress towards strategic priorities to capture the opportunity in spirits market in India," said Kripalu. Within the Scotch portfolio, Johnnie Walker and Black & White showed robust growth. United Spirits shares closed at Rs571.75, down 1.46% on the NSE.

The top gainers and top losers of the major indices are given in the table below:

The closing values of the Asian indices are given in the table below: The Total Investment & Insurance Solutions

In a first, India enters $100 billion M&A club in 2018 -The Total Investment & Insurance Solutions

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24 January 2019

 

merger and acquisition space (The Total Investment & Insurance Solutions)

India has entered the $ 100 billion club in the merger and acquisition space. In a first, 1,200 deals worth around $ 110 billion or Rs 71,000 crore were concluded in India in a year as per Grant Thornton’s (GT) annual Dealtracker. M&A transactions were the growth front runners with deals aggregating to $90 bn and PE reporting deals aggregating to $20 billion, the GT report stated. This was an 80% jump in deal value over 2017. As per the GT report deals worth $ 60 billion were concluded in 2017, and $ 57 billion in 2016. The spurt could also be the result of the change in several regulations, the report stated.

“The ongoing capital market and regulatory reforms, constant amendments to reforms like Goods and Services Tax (GST), Real Estate Regulatory Authority (RERA), Insolvency and Bankruptcy Code (IBC), and efforts to improve ease of doing business in the country are signs of increasing depth and maturity, making the Indian markets more attractive. Furthermore, the surge in the M&A deal activities was mainly driven by the objectives of consolidating by expanding the market share, buying technology and diversifying market presence. Additionally, M&As have also proven to be effective in bridging the gaps in the market, resource and the growth outlook among business partners. Corporates improved their inorganic growth strategy through divestment of non-core assets, expanded into newer business segments, and hunted for bargain purchases following the introduction of IBC during 2018,” the report said.

The growth in the deal space however could come down in the current year, the report cautioned. The outlook for 2019 may be tepid for the first two quarters, but it should eventually pick up and end on a positive note, given the strong fundamentals and deal pipelines. However, a lot will depend on the continuing reforms, new policies and pace of reforms post general elections, the report said.The Total Investment & Insurance Solutions

70% organisations to assist workers with AI by 2021: Gartner-The Total Investment & Insurance Solutions

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24 January 2019

 

Gartner (The Total Investment & Insurance Solutions)

With virtual personal assistants (VPAs) and other chatbots augmenting human performance in many organisations, about 70 per cent institutions would integrate Artificial Intelligence (AI) at workplaces by 2021 to assist their employees, market research firm Gartner said on Thursday.

"Digital workplace leaders will pro-actively implement AI-based technologies such as virtual assistants or other NLP-based conversational agents and robots to support and augment employees' tasks and productivity," said Helen Poitevin, Senior Research Director, Gartner.

However, past incidents have shown that poorly designed assistants cause frustration among employees that has at times prompted bad behaviour and abusive language toward the VPA. "AI agents must be properly monitored to prevent digital harassment and frustrating user experiences otherwise it could create a toxic work environment," Poitevin added.

Recent experiments have also shown that people's abusive behaviour toward AI technologies can translate into how they treat the humans around them hence organisations should train the VPAs to respond appropriately to aggressive language, Gartner noted. Hence, this increasing involvement of AI, VPAs and chatbots in work spaces is expected to prompt 10 per cent of organisations to add a digital harassment policy to workplace regulations.

Additionally, since applied AI and automation to routine work across banks have been successful, the research firm predicts that by 2020, about 20 per cent of operational bank staff engaged in back office activities will rely on AI to do non-routine work, the research firm noted.The Total Investment & Insurance Solutions

India's GDP likely to grow 7.4% this fiscal, at 7.6% in 2019-20: UN Report-The Total Investment & Insurance Solutions

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24 January 2019

 

GDP (The Total Investment & Insurance Solutions)

The Indian economy is expected to grow at 7.4 per cent in the current fiscal and its GDP growth will rise to 7.6 per cent in 2019-20, before tapering down to 7.4 per cent in 2020-21, according to a UN report released on Wednesday.

The report United Nations' World Economic Situation and Prospects (WESP) 2019 said that India's growth continues to be underpinned by robust private consumption, a more expansionary fiscal stance and benefits from earlier reforms.

 "Yet, a more robust and sustained recovery of private investment remains crucial to lift medium-term growth," the report said, referring to the sustained slowdown in domestic private investment owing to various factors such as the massive accumulated non-performing assets (NPAs or bad loans) of banks, highly leveraged corporates and a general credit crunch. 

"There is very little controversy about India's growth potential and there is a consensus about the country being poised on the 7.4-7.5 per cent gross domestic product (GDP) growth rate," UNESCAP's Director and Head South and South-West Asia Office, Nagesh Kumar, told reporters here at the launch of the report. Noting that India's growth currently is fuelled by private consumption with the potential of expanding on the back of "pent-up demand", Kumar said that a revival of private investment could help push the country's growth trajectory above the 8 per cent level.

He said the downside risks to these growth projections are posed by political uncertainty bearing on the pace of reforms, global oil price volatility and financial instability created by a tightening in global financial markets. On the global economic prospects, the report said it would continue to grow at a steady pace of around 3 per cent in 2019 and 2020, after expanding by 3.1 per cent in 2019, "amid signs that growth has peaked." "However, a worrisome combination of development challenges could further undermine growth," it said.

The risks to the outlook are building, economic growth is uneven and is often failing to reach the regions and individuals where it is most needed, it added. "These risks include waning support for multilateral approaches; the escalation of trade policy disputes; financial instabilities linked to elevated levels of debt; and rising climate risks, as the world experiences an increasing number of extreme weather events," the report said.

 UN Secretary-General Antonio Guterres cautioned that while global economic indicators remain largely favourable, "they do not tell the whole story". He also said the UN report raises concern over the sustainability of global economic growth in the face of rising financial, social and environmental challenges.The Total Investment & Insurance Solutions

World Markets Cautious On Worries Over US-China Talks-The Total Investment & Insurance Solutions

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24 January 2019

Financial Markets (The Total Investment & Insurance Solutions)

World stock markets were subdued Wednesday as news of possible hiccups in U.S.-China trade talks ratcheted up growth worries.

KEEPING SCORE: Germany's DAX was up 0.1 percent to 11,102 and the CAC 40 in France rose 0.3 percent to 4,860. Britain's FTSE 100 was 0.3 percent lower at 6,878. Wall Street was expected to open higher following losses the day before. The future contract for the Dow Jones industrial average was 0.5 percent higher while that for the S&P 500 was up 0.3 percent.

THE DAY IN ASIA: Japan's Nikkei 225 index shed 0.1 percent to 20,593.72 after the Bank of Japan kept its short and long term interest rates intact as expected but lowered its inflation forecasts. South Korea's Kospi rose 0.5 percent to 2,127.78. Hong Kong's Hang Seng was almost flat at 27,008.20. The Shanghai Composite index gained 0.1 percent to 2,581.00. Australia's S&P ASX 200 slipped 0.3 percent to 5,843.70. Shares fell in Taiwan, Singapore and Indonesia but rose in Malaysia.

U.S-CHINA RELATIONS: White House economic adviser Larry Kudlow denied reports by media outlets including the Financial Times and CNBC saying the U.S. had turned down an offer by Chinese trade officials to meet in Washington this week, due to a lack of progress on issues such as protection of intellectual property. He said both sides are working toward the higher level talks. The reports, citing unnamed sources close to the matter, said the preparatory discussions were meant to pave the way for meetings between Chinese Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer next week. The news comes after the International Monetary Fund lowered its global growth estimates for 2019 and 2020.

ANALYST'S TAKE: "The U.S. strategy might be to raise pressure on the Chinese ahead of the hard deadline in March, but this makes for uncomfortable interpretation by markets, and could potentially induce excessive volatility in the interim," Chang Wei Liang of Mizuho Bank said in a commentary.

JAPANESE TRADE: On Wednesday, Japan released weaker-than-expected trade data for December. The country said its exports fell by 3.8 percent from a year earlier, its largest drop in two years. It also posted its first full-year trade deficit since 2015. Imports climbed 1.9 percent in December, missing the market estimate of a 3.7 percent rise, and way below November's 12.5 percent surge. Weaker Japanese exports suggest that a slowdown in China, the world's second largest economy, is starting to have an impact on companies elsewhere that rely on it for business.

ENERGY: U.S. crude oil picked up 35 cents to $53.36 per barrel in electronic trading on the New York Mercantile Exchange. The contract closed $1.03 lower on Tuesday. Brent crude, used to price international oils, gained 46 cents to $61.96 per barrel. It dropped $1.24 the day before.

CURRENCIES: The dollar strengthened to 109.67 yen from 109.37 yen late Tuesday. The euro rose to $1.1365 from $1.1361.The Total Investment & Insurance Solutions

If Nifty, Sensex May Head Lower If It Breaks Today’s Low – Wednesday closing report-The Total Investment & Insurance Solutions

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23 January 2019

I had mentioned in Tuesday’s closing report that Nifty, Sensex were directionless. The major indices of the Indian stock markets suffered a correction on Wednesday and closed with losses over Tuesday’s close. On the NSE, there were 682 advances, 1,012 declines and 364 unchanged. The trends of the major indices in the course of Wednesday’s trading are given below:

After a largely choppy trade session for the better part of Wednesday the Sensex closed lower owing to the last hour selling in index heavyweight ITC, which missed estimates in its quarterly result. ITC lost over 4% after it reported its third quarter results on Wednesday. The FMCG (fast moving consumer goods) major reported a 3.85% year-on-year (y-o-y) growth in its standalone net profit. Globally, market sentiments were weak over concerns of a slowing global economy and the ongoing US-China trade tension. 

Metal stocks were back in favour on Wednesday after closing 2% lower on Tuesday, while IT (information technology), FMCG (fast moving consumer goods) and financials came under selling pressure. Markets globally had reversed course after the International Monetary Fund (IMF) revised down its forecast for global growth.

Analysts said IMF now projects a 3.5% growth rate worldwide for 2019 and 3.6% for 2020 which is 0.2% and 0.1% points below its last forecasts in October 2019, making it the second downturn revision in three months. Investors were also cautious owing to reports that the US turned down an offer to hold preparatory trade talks with China. This was later denied by the US administration.

The Indian rupee, however, gained 17 paise to trade at 71.27 (around 3.30 p.m.,) against the US dollar, providing some support to the overall dismal sentiment. It closed at 71.27 per dollar on Tuesday.

FMCG (fast moving consumer goods) major ITC Ltd reported a 3.85% year-on-year (y-o-y) growth in its standalone net profit to Rs3,209.07 crore for the third quarter ending on December 31, 2018 as compared to Rs3,090.20 crore in the corresponding period last year. Driven mainly by FMCG (fast moving consumer goods), agri business and paperboards, paper and packaging, its gross revenue for the quarter soared to Rs11,340.15 crore, up by 15.1% from Rs9,852.74 crore in the corresponding period last year.

Private life insurer HDFC Life Insurance Co Ltd closed the nine month period with a net profit of about Rs913 crore, said a top company official, against Rs762 crore registered for the earlier corresponding nine month period. HDFC Standard Life Insurance Company shares closed at Rs372.00, down 3.09% on the NSE.

Budget airline IndiGo said its flight from Lucknow to Jaipur returned after take-off after the pilot noticed high vibration in the engine. "The pilot observed high vibration on engine number 2. As a precaution, he returned the aircraft to Lucknow," a company statement added. InterGlobe Aviation shares closed at Rs1,111.00, down 0.86% on the NSE.

Hearing an appeal by ArcelorMittal for early resolution of bankrupt Essar Steel, the National Company Law Appellate Tribunal (NCLAT) on Wednesday ordered its Ahmedabad Bench to pass the verdict in the case by January 31. Failing which, the two-member bench of NCLAT headed by Justice S.J. Mukhopadhyay said it would call the matter and pass an order at its next hearing. The appellate tribunal has asked for the matter to be listed for next hearing on February 4. ArcelorMittal's Rs42,000 crore resolution plan was approved by the Committee of Creditors (CoC) to Essar Steel last October and has been waiting for the Ahmedabad NCLT's approval. The next hearing on the matter by the Ahmedabad Bench is on January 31. Essar Shipping shares closed at Rs12.15, down 0.82% on the NSE.

The top gainers and top losers of the major indices are given in the table below:

The closing values of the major Asian indices are given below: The Total Investment & Insurance Solutions

Major Indices (The Total Investment & Insurance Solutions)

India's GDP growth may improve to 7.3% in FY20: Crisil -The Total Investment & Insurance Solutions

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23 January 2019

 

GDP (The Total Investment & Insurance Solutions)

India's growth rate is likely to inch up to 7.3 per cent in 2019-20, provided that there are normal rains and a stable political outcome of the general elections, Crisil Ratings said Wednesday.

India is expected to clock a growth rate of 7.2 per cent in the current financial year, up from 6.7 per cent in 2017-18. "In fiscal 2020, Crisil expects GDP to grow 7.3 per cent on assumptions- normal rains, oil prices lower than 2018, stable political outcome," the rating agency said in its 'India Outlook FY20'. It said with the government likely to stick to a fiscal consolidation path, the pick-up in growth is expected to be only gradual.

 "A change in the growth mix is on cards, with private sector likely to take over the baton from the government," Crisil said. Stating that fiscal health remains a "key risk", Crisil said the fiscal deficit is likely to be 3.3 per cent of the gross domestic product (GDP) in the next fiscal. The deficit is budgeted at 3.3 per cent in the current fiscal.

Crisil, however, cautioned that if the general elections this year yield a fractured mandate and derail/delay the process of reforms, "the implications on sentiments, investments and growth could be adverse". It said global crude oil prices are expected to soften to settle at around USD 60-65 average per barrel in fiscal 2020, compared with USD 68-72 average per barrel in fiscal 2019 as overall global demand slows.

 "However, some price pressure could be felt in response to the recently announced supply cuts by the Organization of Petroleum Exporting Countries (OPEC)," it said. It said fiscal 2019 would be the second consecutive year of sub-4 per cent Consumer Price Index (CPI)-based inflation. From an average 4.5 per cent in fiscal 2017, CPI inflation fell to 3.6 per cent in fiscal 2018. "We estimate it at 3.7 per cent for fiscal 2019, given the continuous and sharp decline in food prices and slowdown in global crude oil prices compared with a few months ago," Crisil said. It said the current account deficit (CAD) would reduce to 2.4 per cent of GDP in fiscal 2020 from 2.6 per cent in fiscal 2019.

 The rupee, Crisil expects, will remain volatile and settle at 72 to a dollar on an average by March 2020, compared with an estimate of 71 to a dollar by March 2019. "Low crude oil prices and slowing pace of monetary policy normalisation in the US will support the rupee, so we see only a modest weakening.

But given that India runs a CAD, the rupee remains exposed to volatility emanating from oil, tariff wars, and monetary policy surprises from the advanced countries," Crisil said. Crisil said domestic interest rates, which had risen last year, are expected to soften in fiscal 2020. "With inflation under control, softer crude oil prices relative to last year, we believe the Monetary Policy Committee would change its stance to neutral from calibrated tightening and could cut the repo rate by at least 25 basis points (from 6.50 per cent currently)," it added. The Total Investment & Insurance Solutions

Government plans to link 22000 mandis with e-NAM platform by 2022-The Total Investment & Insurance Solutions

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23 January 2019

 

National Agriculture Market (The Total Investment & Insurance Solutions)

The government is planning to link 22,000 mandis across the country with the National Agriculture Market (e-NAM), an online trading platform for agricultural commodities by 2021-22, Union Agriculture Minister Radha Mohan Singh Wednesday said. "Already 585 mandis have been linked with e-NAM and we are planning to link 22,000 mandis across the country by FY22," the minister said at a conference organised by Crop Care Federation of India.

The minister said the government is implementing several programmes to develop the agricultural sector and improve the economic condition of farmers. "Issues such as reducing cost of production, ensuring remunerative price for farmers' produce, stopping wastage and ensuring alternative sources of income are being addressed in mission mode," he added.

The minister said if the government, the industry and farmers work together then many challenges can be overcome. "The government has been working with the industry to help farmers confront the challenges facing them, however, there is a need to expedite the support," he added.

Singh said, the budgetary outlay of the Agriculture Ministry has been increased to Rs 2,11,694 crore during 2014-19, to develop and implement schemes to improve the farmers' situation in the country.

 'Pradhan Mantri Fasal Bima Yojana' is one such scheme which aims to reduce the risks associated with agriculture, is being implemented across the country. Union Budget 2019, he said, will also be dedicated to the farmers of this country. "It will be another step forward, in contributing to the realisation of the goal of doubling farmers income by the year 2022," Singh addeThe Total Investment & Insurance Solutions

Davos: Japan's Abe to put trade, climate at centre of G20 agenda-The Total Investment & Insurance Solutions

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23 January 2019

 

Japan(The Total Investment & Insurance Solutions)

Japanese Prime Minister Shinzo Abe said on Wednesday he will seek to use his chairmanship of the Group of 20 leading economies to rebuild trust in the global trade system.

His speech to the World Economic Forum in the Swiss Alps was significant at a time when a bitter Sino-U.S. trade dispute is one of several factors threatening to bring about a sharp slowdown in global growth.

“Japan is determined to preserve and committed to enhancing the free, open, and rules-based international order,” he told delegates.

“I call on all of you ... to rebuild trust toward the system for international trade. That should be a system that is fair, transparent, and effective in protecting intellectual property rights and also in such areas as e-commerce and government procurement.”

With the French, British and U.S. leaders cancelling their visits because of more pressing concerns at home, Abe is one of only three Group of Seven leaders attending the annual event in Davos, where business executives are worried about the damage that populism and trade protectionism are inflicting on the global economy.

Abe said Japan, as chair of this year’s gathering of the Group of 20 (G20), will also seek to spearhead discussions on climate change and ways to facilitate use of digital data while protecting intellectual property.

The comments underscore Japan’s hope to rally support from some of its G20 counterparts in pushing for a multilateral approach in solving trade frictions.

That could help Tokyo fend off pressure from Washington to open up its politically sensitive agriculture market and take other steps to fix bilateral trade imbalances, analysts say.

Japan has to be consistent on the need to promote free trade “and shouldn’t change this stance even if the United States is always talking about doing a bilateral deal,” said Takeshi Niinami, head of brewer Suntory Holdings Ltd and an economic adviser to Abe.

Australia, Singapore and other Trans-Pacific Partnership (TPP) countries could help Japan make free trade a key topic of debate at the G20, he told Reuters.

At his previous Davos visit in 2014, Abe pledged to pull the economy out of stagnation with his “Abenomics” mix of fiscal spending, ultra-easy monetary policy and steps to boost Japan’s potential growth via labour market reform and deregulation.

Five years later, the boost to growth from Abenomics is fading, inflation remains far below the Bank of Japan’s target and critics point to a lack of progress on deregulation.

Abe sought to counter such criticism, saying that through job-creating policies he had demolished “a wall of despair and pessimism on Japan” that had existed five years ago.

He said Japan hoped to build a G20 consensus on the need to reduce plastic waste flowing into the oceans, and coordinate on global usage of digital data without infringing on personal privacy and intellectual property.

“I must say that spending money for a green earth and a blue ocean, once deemed costly, is now a growth generator,” he said.

“Decarbonisation and profit making can happen in tandem. We policy makers must be held responsible to make it happen, as I will be stressing in Osaka this year.”

People close to the premier have said Abe is keen to use the G20 summit in Osaka, western Japan, in June to boost his poll ratings ahead of an upper house election looming mid-year.The Total Investment & Insurance Solutions