With the rupee heading south against the dollar, speculative bets have increased. A widening difference between the onshore and the offshore non-deliverable forward market (NDF) for the dollar-rupee is exerting pressure on the rupee and encouraging speculators to bet more on the currency market. Experts suggest that there could be more pain ahead for the rupee for some more time given the spread.
Companies and Markets
Companies & Markets
Public sector banks, including State Bank of India (SBI) and Punjab National Banks (PNB), are in talks with asset management and investment funds Brookfield, KKR, BlackRock and Edelweiss to set up country’s first asset management company (AMC) that would turn around stressed assets under the new resolution scheme Sashakt.
Pharma stocks outperformed the equity market due to weakening of the rupee which crossed 72 per US dollar on Thursday and finally settled at 71.99. Rupee’s fall for seventh consecutive session to all time low of 72.10 has brought cheers to exporters.
Pharma stocks rallied on gains to be made by pharma companies on their exports earnings. The NSE Nifty Pharma Index gained 2.72 per cent, while the Healthcare Index gained 2.20 per cent against 0.52 per cent gains made by Nifty -50 and 0.59 per cent by the Sensex.
A shareholder and former employee of Larsen and Toubro (L&T) has approached the National Company Law Tribunal (NCLT) alleging oppression and mismanagement of employee welfare fund and assets of the company. The petitioner Uday Dixit sought action against the engineering major and its chief A M Naik (in pic).
Dixit, in his petition, alleged that the company had committed fraud on shareholders and its employees.
Zee Entertainment Enterprises dropped to a 20-month low of Rs 470.30 on the BSE on Thursday after Morgan Stanley lowered the stock’s rating.
The global brokerage downgraded the media company to Underweight from Overweight. Morgan Stanley also cut the target price to Rs 410—the lowest among the Bloomberg consensus of 38 analysts—implying a potential downside of 15 per cent.
Competing with digital and over-the-top platforms such as Netflix, Amazon and possibly a larger domestic rival like Reliance Jio Infocomm will be an overhang, Morgan Stanley said.
Kerala floods are expected to shrink natural rubber production by 18 to 20 per cent and affect the input costs and operating costs of tyre manufacturers. The import is expected to touch 50 per cent of the consumption in FY19.
As the inaugural India-US ministerial 2+2 dialogue is deadlocked on the issue of Iranian oil imports, the country faces the full might of US sanctions if decided to continue buying crude from the Islamic Republic post November 4.
The domestic aluminium market will keep facing competition from imports, but a structural uptick in aluminium fundamentals will benefit integrated players like Hindalco. Though the global aluminium market is slowly moving towards higher deficit, competition may increase in the domestic market as the protectionist measures taken by the US will divert Chinese output to the rest of the world.
"The domestic aluminum market will continue to face competition from continuing imports under free-trade agreements (FTA)," said India Ratings and Research (Ind-Ra) in a statement on Thursday.
The rupee tumbling against the greenback may bring some respite to the Indian tech sector as a major chunk of the industry’s revenues still come from the United States. The currency’s downward str-ide comes at a critical time when the legacy IT is shrinking and the entire business is getting commoditised. The benefit of rupee fall will help domestic tech players which are navigating through these tough times, say observers.
The rupee on Thursday fell below 72-mark for the first time ever against the US dollar before ending the day’s trade at 71.99.
The market ended higher in a highly volatile trading session. The Sensex rose 224, or 0.59 per cent, to close at 38,242.81, while the Nifty 50 Index ended 59 points, or 0.52 per cent, to settle at 11,536. The S&P BSE Mid-cap Index rose 0.31 per cent, while S&P the Small-cap index was up 0.46 per cent. Both indices underperformed the Sensex. The market breadth was positive as 1,603 shares rose and 1,115 shares fell.