Stocks continue to remain volatile this morning with the benchmark indices trading flat after opening with minor gains.
Reliance India Limited, which has been entering a spree of investment deals over the last month or so, has declared itself to be net-debt free.
Join us as we follow the top business news through the day.
Moody’s downgrades Tata Motors’ rating
Moody’s Investors Service on Thursday said it had downgraded Tata Motors’ rating as the company faces tough market conditions amid the COVID-19 pandemic.
The ratings agency said it had downgraded Tata Motors’ corporate family rating (CFR) and senior unsecured instruments rating to B1 from Ba3.
“The outlook on all ratings has been changed to ‘negative’ from ratings under review,” Moody’s Investors Service said in a statement.
This rating action concludes the review for downgrade initiated on March 26 2020, it added.
Gold ticks higher on virus fears; firm dollar limits upside
Fears of a deadly second wave of the coronavirus pandemic is holding up gold.
Reuters reports: “Gold prices edged higher on Friday, with the metal’s safe-haven demand supported by concerns over a second wave of coronavirus infections, although gains were limited by a stronger U.S. dollar.
Spot gold rose 0.2% to $1,725.88 per ounce by 0506 GMT. The bullion has fallen 0.3% so far this week. U.S. gold futures rose 0.2% to $1,735.10.
“Gold prices seem to be in somewhat of an equilibrium at the moment. Balanced between geopolitical and COVID-19 concerns on one side, and economic recovery hopes and dollar strength on the other,” said Jeffrey Halley, senior market analyst at OANDA.
“Gold continues to see patient buyers on dips to $1,710 to $1,715 an ounce, with equally patient sellers lying in wait on any spikes towards $1,740.”
More than 8.38 million people have been reported to be infected by the coronavirus globally, with China reporting 32 new virus cases on Friday, 25 of which were reported in the capital city Beijing. A surge in fresh infections in several U.S. states and the imposition of travel curbs in Beijing to stop a new outbreak have renewed fears of a delay in economic recovery as countries reopen after conronavirus-induced lockdowns.
Simmering geopolitical tensions between North Korea and South Korea, and India and China also offered some support to bullion, which is often used as a safe-haven investment during times of political and financial uncertainty.”
Rupee falls 15 paise to 76.29 against US dollar in early trade
Global cues dragged the rupee down against the US dollar this morning.
PTI reports: “The rupee depreciated 15 paise to 76.29 against the US dollar in opening trade on Friday tracking its Asian peers, even as the domestic equity market was in the positive territory.
Forex traders said positive domestic equities supported the rupee, but factors like rising coronavirus cases and border tension with China weighed on the local unit.
The rupee opened at 76.28 against the US dollar, then fell further to 76.29 against the US dollar, down 15 paise over its previous close.
It had settled at 76.14 against the greenback on Thursday.
“Most Asian currencies were weak against the greenback this morning as the US dollar extended gains supported by safe haven appeal and could weigh on the domestic unit,” said Abhishek Goenka, Founder and CEO, IFA Global.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.03 per cent to 97.38.
The 30-share BSE benchmark Sensex was trading 103.97 points higher at 34,312.02 and broader NSE Nifty rose 34.70 points to 10,126.35.
Foreign institutional investors were net buyers in the capital market as they bought shares worth Rs 366.57 crore on Thursday, according to provisional exchange data.
Brent crude futures, the global oil benchmark, rose 0.89 per cent to USD 41.88 per barrel.”
Indian economy to contract by 4% in 2020-21, forecasts ADB
Hit hard by the COVID-19 pandemic, the Indian economy is expected to contract by 4% during the current financial year, the ADB said in a supplement to its Asian Development Outlook (ADO) on Thursday.
Countries in ‘Developing Asia’ will ‘barely grow’ in 2020, the ADB forecast.
China, however, is expected to record a positive growth of 1.8% in 2020, sharply down from 6.1% in 2019, the lender said.
“Growth in Indian GDP slowed to 3.1% in the last quarter…its slowest since early 2003. Economic growth slowed to 4.2% in the whole of” the last fiscal year as both exports and investment started to contract, the ADB said.
Reliance is net-debt free after ₹1.69 lakh crore fund-raising: Mukesh Ambani
A spree of investments in Jio over the last month or so has helped Reliance significantly reduce its debt load.
PTI reports: “Billionaire Mukesh Ambani on Friday announced that his oil-to-telecom conglomerate Reliance Industries is now net debt-free after raising a record Rs 1.69 lakh crore from global investors and a rights issue in under two months.
Reliance raised Rs 1.15 lakh crore from global tech investors by selling a little less than a quarter of the firm’s digital arm, Jio Platforms Ltd, and another Rs 53,124.20 crore through a rights issue in the past 58 days.
Taken together with last year’s sale of 49 per cent stake in fuel retailing venture to BP Plc of UK for Rs 7,000 crore, the total fund raised is in excess of Rs 1.75 lakh crore, the company said in a statement.
Reliance had a net debt of Rs 1,61,035 crore as on March 31, 2020. “With these investments, RIL has become net debt-free,” it said.
“I have fulfilled my promise to the shareholders by making Reliance net debt-free much before our original schedule of March 31, 2021,” Ambani said.
Jio Platforms – which houses the country’s youngest but largest telecom firm Reliance Jio, raised Rs 1,15,693.95 crore from leading global investors including Facebook, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, ADIA, TPG, L Catterton and PIF since April 22, 2020.
Saudi Arabian sovereign wealth fund PIF buying 2.32 per cent stake in the unit for Rs 11,367 crore on June 18 “marks the end of Jio Platforms’ current phase of induction of financial partners,” the statement said.
Alongside, Reliance launched India’s biggest right issue, which was subscribed 1.59 times.
Though the rights issue size was Rs 53,124 crore, the company has got only 25 per cent of the money as the remaining is to be paid only next fiscal.”
Sensex jumps over 200 points; Nifty tops 10,100 level
The day has opened for stocks with some minor gains helped by index heavyweights.
PTI reports: “Equity benchmark Sensex jumped over 200 points in early trade on Friday led by gains in index-heavyweights Reliance Industries, HDFC Bank and ICICI Bank amid positive cues from global markets and fresh foreign fund inflows.
The 30-share index was trading 207.64 points, or 0.61 per cent, higher at 34,415.69.
Similarly, NSE Nifty advanced 59.45 points, or 0.59 per cent, to 10,151.10.
Bajaj Finance was the top gainer in the pack, rising around 3 per cent, followed by ONGC, Axis Bank, Tata Steel, IndusInd Bank and SBI.
Reliance Industries surged nearly 2 per cent to hit its 52-week high of Rs 1,684 after Mukesh Ambani said his flagship firm is now net-debt free after a record Rs 1.69 lakh crore fund raising in under two months.
On the other hand, Infosys, HCL Tech, Hero MotoCrop and M&M were among the laggards.
In the previous session, the BSE barometer settled at 34,208.05, up 700.13 points, or 2.09 per cent, while the broader Nifty jumped 210.50 points, or 2.13 per cent, to 10,091.65.
On a net basis, foreign institutional investors bought equities worth Rs 366.57 crore in the capital market on Thursday, provisional exchange data showed.
According to analysts, besides stock-specific actions, positive cues from global markets and fresh foreign fund inflows buoyed market sentiment.
Bourses in Shanghai, Hong Kong and Tokyo were trading with gains in early deals, while those in Seoul were in the red.
Stock exchanges on Wall Street ended on a positive note in overnight trade.
International oil benchmark Brent crude futures rose 0.84 per cent to USD 41.86 per barrel.”