Morning Scan: All the big stories to get you started for the day

A round-up of the biggest articles from newspapers

A round-up of the biggest articles from newspapers

Indian equities decline on weak global cues and worries over higher crude prices

India’s equity gauges fell over 1 percent on October 3, influenced by similar trends in Asian markets and a weak European opening. A rebound in crude oil prices soured sentiment, with the Nifty closing below 17,000 points, considered a key level in the near term. The index declined 1.21 percent to below its 200-day moving average, a long-term indicator. The Sensex lost 1.11 percent.

Why it’s important: The decline was mainly due to selloff by investors who booked profits on concerns over tighter liquidity and higher interest rates. Market volatility is expected to continue.

Spike in holdings of bearish futures contracts by overseas investors

Foreign institutional investors (FIIs) are currently holding the third-highest cumulative quantity of bearish futures contracts on the Nifty and the Bank Nifty since the COVID-19 pandemic began in March 2020. These overseas investors held cumulative index net short positions of 127,429 contracts on October 3, which was the third highest number after 173,133 net shorts on March 6, 2020, when fears of the pandemic began gripping the world. Given the weak FII data, analysts expect market choppiness to rise.

Why it’s important: The net short positions are hedges against a steep fall in local stocks. Corrections in the market and a weakening currency reduce earnings of foreign investors when they repatriate funds.

Prosus backs out of PayU’s proposed acquisition of BillDesk

Prosus NV, the investment arm of South African Naspers, terminated a $ 4.7 billion deal to buy BillDesk, citing a breach of conditions, merely hours before the deadline, stunning shareholders of the Indian payments firm. The abrupt move was triggered largely by the correction in global markets that rendered the year-old transaction overpriced. BillDesk shareholders have hired law firms to fight it out in the courts.

Why it’s important: The termination ends what would have been the second-largest buyout of a local digital technology start-up after Walmart’s $ 16 billion purchase of a majority stake in Flipkart in 2018. The development happened after India’s antitrust regulator approved of the deal.

5G will spread fastest in India, says equipment maker Ericsson

Global telecom equipment Ericsson said that India will see one of the fastest 5G adoptions in the world. It allayed concern raised by telecom operators in the country about supply-chain constraints, especially due to the sudden closure of component factories in China, which can impact India’s aggressive plans for the 5G rollout. India is among the top five markets in the world for Ericsson in terms of revenue.

Why it’s important: Ericsson said it has enough capacity to cater to the bulk of demand for 5G network gear from its Indian manufacturing centre, at a time when Reliance Jio and Bharti Airtel have announced aggressive plans for rolling out 5G services.

Corporate and retail borrowers increasingly wary of rising borrowing costs

The weighted average interest rate on fresh loans has increased by 82 basis points (bps) since April, with private banks effecting a 68 bps increase and state-run banks raising it by 96 bps, Reserve Bank of India (RBI) data show. One basis point is a hundredth of a percentage point. The rising costs of loans may slow down the demand for borrowing by both corporate and retail customers, experts said.

Why it’s important: Companies are reviewing capex plans although they are still seeing a limited impact of the rate hikes. The rising costs could be offset a bit by moderating commodity prices.

Women start taking leading role in India’s EV industry

Women professionals are emerging as a preferred choice in India’s rapidly expanding electric vehicle (EV) industry with legacy companies as well as start-ups seeking better gender balance at workplaces. For every 10 new hires in the sector, six tend to be women skilled in business modelling, design redevelopment, e-mobility, and renewable energy management, according to recruiting agencies.

Why it’s important: Women professionals are being seen as more agile than their male counterparts and are said to value safety and quality while leading with empathy. Gender diversity is a welcome development.

India’s factory activity slows in September but remains expansionary

India’s factory activity cooled slightly in September from the preceding month, but remained firmly in the expansion zone, riding the peak business optimism since February 2015, a survey showed. The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) fell to 55.1 in September from 56.2 in August. A reading above 50 on the index indicates expansion.

Why it’s important: Manufacturers are still seeing new orders, international sales and increases in output. However, currency risks and the impact of a weaker rupee on inflation and interest rates could derail the optimism during October.

Investment arm of NHAI to raise Rs 1,500 crore through bonds

The National Highways Infra Trust, the infrastructure investment trust of the National Highways Authority of India (NHAI), will hit the market soon to raise Rs 1,500 crore and another Rs 5,000 crore by the end of this financial year. The trust will raise Rs 1,500 crore via issuance of bonds carrying a coupon rate of about 7 percent.

Why it’s important: This is in line with transport minister Nitin Gadkari’s announcement that the capital markets would soon be approached to raise funds to build roads. There is likely to be keen investor interest on expectations of high returns.

TCS likely to win $ 2 billion BSNL contract to roll out 4G and 5G services

Tata Consultancy Services (TCS) is set to secure a $ 2 billion deal from Bharat Sanchar Nigam (BSNL) to roll out its 4G and 5G services across India. The final approvals from the state-owned telecom operator may take a couple of months. As part of the deal, TCS will develop 4G core and Radio Access Network technology for BSNL´s telecom services. The country´s largest IT firm would be the first local company to provide these solutions on a large scale.

Why it’s important: The deal will signal the maturity of domestic companies to cater to high technology demands from the telecom industry. The Tata Group’s recently acquired units Tejas Network and Saankhya Labs will produce the necessary equipment.

India’s proposed new telecom policy will provide boost in five key segments

The upcoming National Tourism Policy may propose to launch five individual tourism missions. The five missions will be dedicated to green tourism, digital tourism, tourism and hospitality sector skills, destination management organizations, and tourism via micro, small and medium enterprises (MSMEs).

Why it’s important: The government aims to leverage the tourism sector to increase India’s soft power and make it a key driver of economic growth and job creation.