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Worst Day For Sensex, Nifty In 7 Months As New Covid Variant Spooks Investors

MUMBAI, Nov 26: The Indian equity benchmarks suffered their worst single-day drop since April 12 on Friday on weak global cues after investor sentiment was dented by detection of a new and possibly vaccine-resistant coronavirus variant.

The Sensex fell as much as 1,801 points or 3 per cent and Nifty 50 index briefly dropped below its important psychological level of 17,000 to hit an intraday low of 16,985. Both the benchmarks fell to their lowest level in three month

The Sensex fell 1,688 points or 2.87 per cent to close at 57,107 and Nifty 50 index dropped 510 points or 2.9 per cent to end at 17,026.

Global stocks tumbled on Friday and oil fell below $80 a barrel after news of a possibly vaccine-resistant coronavirus variant sent investors scurrying to the safety of bonds, the yen and the Swiss franc.

European stocks plunged 2.7 per cent, on track for their worst day since September 2020, with travel and leisure stocks particularly badly hit.

Germany's DAX sank 3 per cent and Britain's FTSE 100 fell 2.7 per cent to its lowest in more than a month.

Little is known of the variant, detected in South Africa, Botswana and Hong Kong, but scientists say it has an unusual combination of mutations, may be able to evade immune responses and could be more transmissible.

"Equity markets have plunged almost 2 per cent amid the emergence of a new, highly mutated Covid-19 variant. EU announced temporary ban of flights from South Africa and few EU countries are already under full lockdown scenario. Thus there is fear of this new variant spreading to other countries which might again derail the global economy. Already there is uncertainty as to when the US Fed will start raising interest rates. So markets might continue to reel under pressure and would actively track Covid situation globally," Hemang Jani of brokerage firm Motilal Oswal said in a statement.

Selling pressure was broad-based as thirteen of 15 sector gauges compiled by the National Stock Exchange ended lower led by the Nifty Realty index's over 6 per cent decline. Nifty Bank, Financial Services, Metal, PSU Bank, Private Bank, Consumer Durables and Oil & Gas indices also fell between 3.5-5 per cent.

On the other hand, pharma and healthcare indices ended higher.

Mid- and small-cap shares also faced selling pressure as Nifty Midcap 100 index fell 3.25 per cent and Nifty Smallcap 100 index declined 2.9 per cent.

JSW Steel was top Nifty loser, the stock fell 7.5 per cent to close at ₹ 630. Tata Motors, Hindalco, Adani Ports, IndusInd Bank, Bharat Petroleum, Maruti Suzuki, Tata Steel, Bajaj Finance, NTPC, ONGC and Tata Consumer Products also fell between 5-7 per cent.

On the flipside, Cipla, Dr Reddy's Labs, Divi's Labs and Nestle India were among the notable gainers.

The overall market breadth was extremely negative as 2,241 shares ended lower while 1,070 closed higher on the BSE.

US To Terminate Trade Retaliation Case Against India After Digital Tax Agreement

NEW DELHI, Nov 24: The U.S. Trade Representative's office said on Wednesday it is moving to terminate its trade retaliation case against India after Washington and New Delhi agreed on a global tax deal transition arrangement that will withdraw India's digital services tax.

USTR said the agreement between the U.S. Treasury and India's Finance Ministry applies the same terms agreed to with Austria, Britain, France, Italy, Spain and Turkey, but with a slightly later implementation date.

The pact follows an October agreement by 136 countries in principle to withdraw their digital services taxes as part of a sweeping global tax deal agreed on Oct. 8 to adopt a 15 per cent global minimum corporate tax and grant some taxing rights on large profitable companies to market countries.

The countries agreed not to impose new digital services taxes before the OECD tax deal is implemented by the end of 2023, but arrangements needed to be made with seven countries that had existing digital taxes largely targeting U.S. technology giants including Google, Facebook and Amazon.com.

The deal between Washington and New Delhi brings all seven countries into a transition arrangement and came after U.S. Trade Representative Katherine Tai concluded a trip to India to discuss increasing trade cooperation on agricultural and other goods.

Under the agreed withdrawal terms, the countries can continue to collect digital services taxes until the new regime is put in place. But for Turkey and the European countries, any taxes collected after January 2022 that exceed what companies would have to pay under the new rules would be credited against the firms' future tax liabilities in those countries.

USTR said for India, the starting date for those credits was pushed back to April 1, 2022, with a three-month extension beyond the end of 2023 if the OECD tax deal is not implemented by that time.

Crypto Prices Crash As India Plans Bill To Bar Private Cryptocurrencies

NEW DELHI, Nov 23: Crypto markets crashed following news of the government introducing a Bill in the Parliament to prohibit all private cryptocurrencies in India, barring a few exceptions to "promote the underlying technology of cryptocurrency and its uses".

As of 11:15 PM on November 23, all major cryptocurrencies saw a fall of around 15 per cent or more, with Bitcoin down over 17 percent, Ethereum falling by close to 15 per cent, and Tether down by almost 18 per cent.

The official document on scheduled house proceedings today showed that the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, is set to be introduced in the Parliament in the upcoming winter session that starts on November 29.

The Bill will prohibit all private cryptocurrencies in India with certain exceptions and is expected to be taken up for final consideration and passing during the winter session.

The government says that the Reserve Bank of India will issue its own digital currency. The objective is, "To create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India."

Security of investors' money and misleading advertisements in the media regarding investment potential and risks have long been a cause of concern.

The government has held several meetings with all stakeholders to discuss the regulation of digital currencies. Prime Minister Narendra Modi has also chaired a high-level meeting with officials from various ministries and RBI on the issue.

The first-ever Standing Committee on Finance on digital currencies, chaired by BJP's Jayant Sinha, to discuss "opportunities and challenges" of crypto finance on November 16 had reached a consensus that cryptocurrency can't be stopped but must be regulated.

While delivering a keynote address at the Sydney Dialogue on November 18, Modi had urged all countries to ensure that cryptocurrency does not “end up in the wrong hands”.

The Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) have also voiced concerns about the unregulated growth of cryptocurrencies in India, keeping vulnerable retail investors in mind.

El Salvador is the only country to recognise Cryptocurrency as a legal tender.

India, US, China To Release Oil Together To Tame Prices

NEW DELHI, Nov 23: India has decided to release 5 million barrels of crude oil from its strategic petroleum reserves (SPRs) simultaneously with countries like the US, Japan, China, Britain and Republic of Korea with the aim of bringing down its prices.

Let us find out why government has decided to take this step:

In an official statement, the petroleum ministry said that the crude oil release will take place in consultation with these countries, which are also major global energy consumers. India holds about 26.5 million barrels of oil in is reserves.

The decision has come after the US has urged these nations to release crude oil from their respective reserves in order to bring down global prices of crude oil.

The United States will release 50 million barrels of crude from its strategic petroleum reserve to help cool oil prices, the White House said on Tuesday.

The crude oil release is being made in coordination with other releases from strategic reserves by China, India, South Korea, Japan and Britain, senior Biden administration officials said.

“India strongly believes that the pricing of liquid hydrocarbons should be reasonable, responsible and be determined by market forces. India has repeatedly expressed concern at supply of oil being artificially adjusted below demand levels by oil producing countries, leading to rising prices and negative attendant consequences,” the petroleum ministry said.

In a bid to control fuel prices' inflationary trends, excise duty on petrol and diesel had been cut by ₹ 5 and ₹ 10 respectively on November 3, 2021, which became effective from November 4.

Earlier Reuters had reported on November 22 that Japanese and Indian officials are working on ways to release national reserves of crude oil in tandem with the United States and other major economies to dampen prices.

US President Joe Biden has asked China, India, Britain, South Korea and Japan for a coordinated oil stocks release as US gasoline prices soar and his approval ratings plummet ahead of next year's mid-term congressional elections.

The request came after the US government was unable to persuade OPEC+ to pump more oil with major producers arguing the world was not short of crude, Reuters had reported.

No specific timeline is available as of now as to by when the countries will start releasing crude oil from their respective strategic reserves. South Korea said it had agreed to participate but did not give volumes. Japanese media said Tokyo would announce its plans on Wednesday. Britain had no immediate comment, reports said.

Cryptocurrency cannot be stopped but must be regulated, concludes Parliamentary Standing Committee

NEW DELHI, Nov 15: At the meeting on crypto convened by the Parliamentary Standing Committee on Finance, the various stakeholders reportedly came to the conclusion that “cryptocurrency cannot be stopped” but it has to be “regulated”, government sources told reporters on Monday.

This is the first such meeting called by the Standing Committee, and it saw the participation of representatives of crypto exchanges, block chain and Crypto Assets Council (BACC), among others. However, none of the stakeholders could decide on a regulator for the burgeoning crypto industry, in spite of agreeing that a regulatory mechanism was necessary.

“There was a consensus that a regulatory mechanism should be put in place to regulate cryptocurrency. Industry associations and stakeholders were not clear as to who should be the regulator,” the source told a news agency.

The panel, headed by Jayant Sinha, also discussed the importance of ensuring “security of investors’ money”, one member also expressed concern over the publication of full-page ads on cryptocurrencies that appear in national dailies.

Sinha had said that the committee called “stakeholders from across the industry including operators of major exchanges, members of CII as well as academics from the Indian Institute of Management (IIM) Ahmedabad, who have done a very thorough study on the crypto finance.”

The experts and academics from the Indian Institute of Management, Ahmedabad in the panel are reported to have “said that cryptocurrencies are some sort of investors' democracy”, sources said.

Digital currencies have been creating ripples all over the world and the apex court of India had nullified a Reserve Bank of India circular banning cryptocurrencies.

For their next step, the committee wants government officials to appear before it and address their remaining concerns.

October exports rise 43% Y-o-Y led by strong global orders

NEW DELHI, Nov 15: Owing to strong global orders, India's merchandise exports rose by 43 percent in October this year as compared to same period previous year. Impressively, exports also rose by nearly 40 percent as compared to October 2019, before the pandemic struck.

Data released by the Commerce and Industry Ministry on November 15 showed outbound trade rise to $35.65 billion in October, up from $ 24.92 billion in October 2020.

Cumulatively, exports have grown by 55 percent in the April-October period of FY22 (2021-22) as compared to the same period of 2020. Compared to 2019, exports have gone up by 26 percent over the same period, the Ministry said.

After a difficult FY21 (2020-21), exports had begun rising since December. In February, before the low base effect kicked in, growth was a marginal 0.67 percent. Since then, calculated annually (Y-o-Y), exports had seen major growth owing to the low base effect which has now worn off, officials say.

In October, imports saw an equally large rise, going up a massive 62.5 percent to $55 billion. This was a continuing trend from the past month when import growth had been more than 84 percent. It had been slowly reducing before that. Experts say this bodes well for the economy, signifying the return of industrial and consumer demand.

Similar to exports, as the low base wears off, the jumps in import growth have moderated. Imports had risen by 51.5 percent in August, 62.9 percent in July, 98.3 percent in June, 73.6 percent in May, and 163 percent in April.

Paytm IPO Fully Subscribed By Noon On Final Day

MUMBAI, Nov 10: Paytm's ₹ 18,300 crore share sale via initial public offering (IPO) was fully subscribed by afternoon on the final day of the subscription, data from stock exchanges showed.

Paytm IPO was subscribed 1.22 times by 1:45 pm, according data from the National Stock Exchange. Paytm received over 5.89 crore bids for 4.83 crore shares on the offer. A total of 1.05 crore bids were received at the cut off price.

Qualified institutional buyers, which include investors like financial institutions, banks and foreign institutional investors, were seen bidding in large numbers as the portion reserved for them was subscribed 1.88 times.

Among the QIBs, foreign institutional investors placed bids for 4.94 crore shares. Non-institutional investors were showing tepid response to the issue as number of shares set aside for them was subscribed 13 per cent, data from BSE showed.

Retail investors were also seen participating in large numbers as the portion set aside for them was booked 1.5 times.

Paytm is selling shares in the price band of ₹ 2,080-2,150 per share and retail investors can bid for a minimum of one lot of six shares up to a maximum of 15 lots. At the upper price band one lot of Paytm shares will cost ₹ 12,900.

Paytm allocated shares worth ₹ 8,235 crore to more than 100 institutional investors, including the government of Singapore, ahead of the country's largest stock market listing.

Launched a decade ago as a platform for mobile recharging, Paytm grew quickly after ride-hailing firm Uber listed it as a quick payment option. Its use swelled further in 2016 when a ban on high-value currency bank notes in India boosted digital payments.

Harsh Goenka boosts Vijay Shekhar Sharma as Paytm IPO sees sluggish response

MUMBAI, Nov 10: Harsh Goenka, chairperson of RPG Enterprises, had generous words of praise for Paytm founder Vijay Shekhar Sharma as the digital payment platform is conducting its initial public offering (IPO) - India's biggest - this week.

The industrialist lauded Sharma for how far he has come from his humble beginnings, thanks to his hard work and perseverance.

“To prosper in the new India , you don’t need family background, knowledge of great English or money- you need to dream, persevere and work hard. A teacher’s son, from a small city, from a Hindi medium school is doing the biggest IPO in our history. All luck @vijayshekhar,” Goenka said in a tweet on Tuesday, tagging Sharma.

Sharma responded to Goenka’s praise with a tweet. “Sir you are kind with praises,” he said.

Vijay Shekhar Sharma, 43, is the son of a schoolteacher. He has said in the past that he learned English by listening to rock music.

He was ranked India's youngest dollar billionaire four years ago at the age of 38 and now has a net worth of $2.4 billion, according to Forbes. He owns a nearly 14-percent stake.

By the end of the second day of bidding, Paytm's Rs 18,300-crore IPO was subscribed 47 per cent. This is in sharp contrast to the IPOs of other internet companies that went public this year. The public issues of food delivery giant Zomato, online beauty brand Nykaa and fintech firm Policybazaar all got fully subscribed on Day 1 of the bidding.

Nykaa Founder Becomes India's Wealthiest Self-Made Female Billionaire

MUMBAI, Nov 10: Falguni Nayar's beauty startup has jolted her to the ranks of the world's richest.

Nayar, who owns about half of Nykaa, is now worth about $6.5 billion as shares of the firm surged as much as 89% when they started trading Wednesday. She's become India's wealthiest self-made female billionaire, according to the Bloomberg Billionaires Index.

FSN E-Commerce Ventures, Nykaa's parent entity, is India's first woman-led unicorn to hit the stock exchange. It priced its initial public offering at the top end of a marketed range, raising 53.5 billion rupees ($722 million). The stock was up 78% as of 10:36 a.m. in Mumbai.

Nayar, who formerly led a top Indian investment bank, founded Nykaa in 2012 just months before turning 50. Back then, most women in the country bought makeup and hair-care products at neighborhood mom-and-pop stores where the selection was scanty and trials unheard of.

The startup has since grown into the country's leading beauty retailer, buoying online sales with demo videos by glamorous Bollywood actors and celebrities and more than 70 brick-and-mortar stores.

Nykaa, derived from the Sanskrit word for heroine, sells items including exfoliation creams, bridal make-up essentials and hundreds of shades of lipstick, foundation and nail color to suit Indian skin tones, skin types and local weather. Its sales surged 35% to $330 million in the year ended in March, according to its filing. Nykaa is a profitable company, a rarity among the internet startups making a debut in the public markets.

Nayar owns her company stake through two family trusts and seven other promoter entities. Her Ivy League-educated daughter and son, who run different Nykaa units, are among the promoters.

While Nayar is India's richest self-made female billionaire, Savitri Jindal, who controls the OP Jindal Group conglomerate founded by her late husband, is the nation's wealthiest woman. Her fortune is valued at $12.9 billion, according to the Bloomberg Billionaires Index, a ranking of the world's 500 richest people.

Nykaa's IPO is one of the many consumer Internet companies making its debut this year amid a soaring stock market. Paytm, India's leading digital payments firm backed by Warren Buffett's Berkshire Hathaway Inc. and Masayoshi Son's SoftBank Group Corp. closes for subscription on Wednesday. One97 Communications Ltd., its operator, is vying for a $2.5 billion listing, the nation's biggest.

While Nykaa has changed Indians' outlook from making do with just a lipstick and kajal eyeliner, "we have a long way to go," Nayar told Bloomberg ahead of the IPO. Women -- and even men -- in the country of 1.3 billion people are just beginning to open their wallets to splurge on make-up and grooming products.

Petrol, Diesel Prices Cut Before Diwali

NEW DELHI, Nov 3: The excise duty on petrol and diesel will be reduced by ₹ 5 and ₹ 10 respectively from tomorrow, the government has announced on the eve of Diwali, aiming to provide relief to people reeling under the impact of spiralling fuel prices.

Prices of Petrol and Diesel will come down accordingly, sources said.

The reduction in excise duty on diesel will be double that of petrol and will come as a boost to the farmers during the upcoming Rabi season, the government said in an official statement.

States have been urged by the Centre to reduce value added tax (VAT) on both the fuels to give relief to consumers.

The move has come when the opposition has been regularly attacking the government on rising fuel prices. On November 1, Congress leader Rahul Gandhi had tweeted while referring to petrol and diesel rates, that one should beware of "pickpockets".

"Beware of pickpockets," he said in a tweet in Hindi, using the hashtag "#TaxExtortion".

Citing a news report along with his tweet, Gandhi had said that petrol prices in some states have crossed ₹ 120 a litre and Centre had collected ₹ 2.3 lakh crore in 2018-19 and ₹ 2.58 lakh crore in 2017-18 by way of fuel taxes.

Meanwhile, the reduction in excise duty on fuel prices has been announced at a time when petrol and diesel prices have been touching all time highs across the country, crossing the ₹ 100 mark in all the major cities of the country, including the four metros.

While petrol prices have crossed the ₹ 100 mark in all the four metros, diesel prices too have gone past the coveted mark in three metro cities while it is at ₹ 98.42 per litre in the national capital.

In fact Petrol prices have risen by about ₹ 34 per litre in two years and ₹ 26 in a year on a steep climb in global oil prices and taxes. Diesel prices have increased by ₹ 29.5 per litre in two years and ₹ 25 in a year.

Also the relief in itself will only be a marginal one, as excise duty on petrol has been reduced only by ₹ 5 per litre. If the break up of petrol price in New Delhi is taken as an example, then out of the total cost of ₹ 109.69 (at which it was being sold two days back), the component of excise duty is ₹ 32.90 per litre.

Therefore even if excise duty is cut by ₹ 5, then petrol price will come down only to ₹ 105.69 per litre in the national capital, which is still at a high and way beyond the ₹ 100 mark.

On Wednesday, petrol price in Delhi stood at ₹ 110.04 per litre while diesel was being sold for ₹ 98.42. In Mumbai, petrol price was ₹ 115.85 while diesel stood at ₹ 106.62 per litre.

Excise duty on petrol was hiked from ₹ 19.98 per litre to ₹ 32.9 last year to recoup gain arising from international oil prices plunging to multi-year low as pandemic gulped demand.

The decision is being seen as a Diwali sop to the burdened consumers, though earlier this week, prices of LPG cylinders had been hiked by oil marketing companies by ₹ 266, adding to the burden of the common man.

Meanwhile the government further said that reduction in excise duty on petrol and diesel will also boost consumption and keep inflation low, thus helping the poor and middle classes.

"Today's decision is expected to further spur the overall economic cycle," the official statement said.

In recent months, crude oil prices have witnessed a global upsurge. Consequently, domestic prices of petrol and diesel had increased in recent weeks exerting inflationary pressure, official sources said.

GST Collections Surge To ₹ 1.30 Lakh Crore In October

NEW DELHI, Nov 1: The goods and services tax (GST) mop-up for the month of October stood at over ₹ 1.30 lakh crore, 24 per cent higher than the GST revenues in the same month last year. In September, the gross GST collections stood at ₹ 1,17,010 crore.

"The GST revenues for October have been the second-highest ever since introduction of GST, second only to that in April 2021," the Ministry of Finance stated in a release.

"The gross GST revenue collected in the month of October 2021 is ₹ 1,30,127 crore of which CGST is ₹ 23,861 crore, State GST is ₹ 30,421 crore, Integrated GST is ₹ 67,361 crore (including ₹ 32,998 crore collected on import of goods) and Cess is ₹ 8,484 crore (including ₹ 699 crore collected on import of goods)," the Ministry said.

"The government has settled ₹ 27,310 crore to Central GST and ₹ 22,394 crore to SGST from IGST as regular settlement. The total revenue of Centre and the states after regular settlements in the month of October 2021 is ₹ 51,171 crore for CGST and ₹ 52,815 crore for the SGST," the release added.

In October, the Ministry said, revenues from import of goods were 39 per cent higher and the revenues from domestic transactions (including import of services) were 19 per cent higher against the same period last year.

The Ministry also said that the figures are "very much in line with the trend in economic recovery."

However, it further mentioned that "the revenues would have still been higher if the sales of cars and other products had not been affected on account of disruption in the supply of semi-conductors."

 

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