#1. Indian stock markets recover sharply as crude oil prices plummet
Local equities rebounded from their month low as a sharp drop in crude oil prices helped allay investor concerns. A retreat in the US bond yields helped improve risk appetite. The benchmark Sensex rose 405 points, or 0.62 percent, to close at 65,632. The 5-share Nifty gained 110 points, or 0.56 percent, to 19,546. Both the gauges had fallen close to 1 percent in the previous two trading sessions. Brent crude prices fell nearly 6 percent to around $85 a barrel.
Why it’s important: Indian markets will become more attractive to overseas investors if crude oil prices continue to fall over worries of reduced consumption. Robust corporate earnings would also help.
#2. Nifty companies expected to post healthy profit growth in September quarter
Companies making up the Nifty index are expected to report another quarter of robust aggregate profit growth in the September quarter, helped by cooling commodity prices, a lower base effect, and standout performances by select auto and financial services firms. Revenue growth outlook could be muted, although it is expected to be better than the fiscal first quarter.
Why it’s important: Corporate performance in the September quarter will largely determine market direction, as foreign investors have been pulling out money on higher crude prices and US treasury yields. An upward trend would help increase risk appetite.
#3. Political stability and policy consistency will fuel India’s rise, says finance minister
Political stability and policy consistency could pave the way for India’s rise to becoming the third-largest economy at a time of geopolitical uncertainties and risks to economic growth, finance minister Nirmala Sitharaman has said. Political flip-flops or coalition constraints could impair the nation’s economic performance and hinder macroeconomic stability, the finance minister said.
Why it’s important: India is already the world’s fifth-largest economy, and currently the sole bright spot among major markets amid a global slowdown. Its further rise cannot be taken for granted in an uncertain and volatile world.
#4. Government may slash excise collection target for 2023-24 by Rs 45,000 crore
The central government may cut the excise duty collection target for the year to March by Rs 45,000 crore, factoring in some fiscal support if crude oil prices remain elevated. The downward revision is not likely to impact overall revenue collection as the other resources may make up for the shortfall.
Why it’s important: Indirect tax collections have been rising steadily on higher economic activity, as has been personal and corporate income-tax. The government needs a buffer if crude prices remain elevated.
#5. Colgate-Palmolive to no longer focus on ayurveda for oral care products
Colgate-Palmolive got distracted by Patanjali and will rather focus on its scientific credentials and technical superiority, and not in ayurveda, chairman and CEO Noel Wallace has said. The company that controls half the oral care segment in India would focus on deepening the market in a country where the rural population still does not brush daily, Wallace said.
Why it’s important: The meteoric rise of Patanjali in the FMCG segment had rattled most dominant players who lost market share to the newer entrant. They might be regaining their mojo as the market stabilizes.
#6. Domestic airfares set to rise as market leader IndiGo reintroduces fuel charge
Local airfares are set to rise as IndiGo has reintroduced a fuel charge of up to Rs 1,000 based on a flight’s distance to offset a significant rise in aviation turbine fuel prices in the past three months. Jet fuel costs constitute the largest expenditure for Indian carriers, accounting for about 45 percent of their revenue. Between June 1 and October 1, prices surged by 32.4 percent to reach Rs 1.18 lakh per kilolitre in Delhi.
Why it’s important: The rise in ticket prices could prove to be a dampener for Indian aviation that sees peak travel season between October and December as fliers have traditionally sensitive to price fluctuations.
#7. India-UK free trade negotiations gather steam as commerce team visits London
Officials are working overtime to address contentious issues related to the proposed free trade agreement between India and the UK in a final push to conclude the deal by the end of the year. Commerce secretary Sunil Barthwal headed to London and other key officials from India’s negotiating team will be joining him, hoping to make headway in the talks that started in January last year.
Why it’s important: There has been substantial progress in the nitty-gritty of the potential free trade deal. Contentious issues such as mobility and increased market access for whiskey need to be ironed out.
#8. Norwest Ventures and General Atlantic in talks to acquire fresh stake in Oyo
Private equity firms General Atlantic and Norwest Venture Partners are in discussions with investors in Oravel Stays to pick up a stake in the hotel operator. Oravel operates the hospitality tech firm Oyo Hotels & Homes. Besides founder Ritesh Agarwal, top investors include Peak XV Partners, Lightspeed Venture Partners and SoftBank.
Why it’s important: The previously troubled hotels aggregator is scripting a turnaround, which has led to renewed investor interest. Some existing investors could be looking for an exit as its IPO has been delayed.
#9. Vedanta chief confident of overcoming troubles on meeting repayment schedules
Billionaire Anil Agarwal, group chairman of Vedanta, has said that the conglomerate will rely on its cash flow and refinancing to repay its debt. He also defended the move toe demerge Vedanta Ltd into six listed entities that he said will unlock further value.
Why it’s important: The response to the demerger has been lukewarm at best. Despite the brave face, Vedanta’s worries over meeting repayment commitments are not yet over.
#10. Sikkim disaster points to lacunae in developing hydropower projects in India
In 10 seconds, the 60m dam of the Rs 13,000 crore Teesta III hydropower project was washed away by a flash flood that began at South Lhonak Lake. The project, which took two decades to complete, changing hands from private companies to state government and now a public-private joint venture, is now staring at an uncertain future with concerns raised about its viability.
Why it’s important: The rosy view on hydropower development in the fragile Himalayas needs a reality check. Private developers could become increasing chary of investing in non-viable projects.
