The benchmark stock indices have opened the day with significant gains as hopes of a vaccine for Covid-19 helped boost stocks across the world.
Former Reserve Bank of India Governor has warned that there could be an unprecedented rise in NPAs in the Indian banking system over the next 6 months due to the coronavirus-induced lockdown.
Join us as we follow the top business news through the day.
10:20 AM
NPAs may witness unprecedented increase in 6 months: Rajan
Insights from a wide-ranging interaction with the former RBI Governor.
PTI reports: “Sounding a note of caution, former RBI governor Raghuram Rajan on Tuesday said non-performing assets of the banking sector are likely to witness unprecedented increase in the next six months and the sooner the problem is recognised the better it would be.
The outbreak of COVID-19 and subsequent lockdown to curb the spread of disease has hit businesses hard and many of them are facing difficulty in servicing debt.
“The level of the NPAs is going to be unprecedented in six months from now if we really recognise the true level of NPAs…We are in trouble and sooner we recognise it, better it is because we really need to deal with the problem, Rajan said during a session at the India Policy Forum 2020 organised by NCAER.
Referring to the article titled Bold decisions, strong political will: Economic reforms are sustained, deep and pronounced under PM Modi by Finance Minister Nirmala Sitharaman published on Tuesday, he said it talks about Jan Dhan success but some economists have contrary views on this.
“We have difficulty in targeting transfers to people. We are still talking about universality because we can’t target. (as highlighted by Vijay Joshi, Oxford University) Jan Dhan does not really work as advertised,” Rajan said.
He, however, said one positive factor for Indian economy is that the agriculture sector is doing well.
“Certainly, the government has come up with reforms. These are reforms which have been talked about for a long time. They certainly can be beneficial for a significant portion of our economy if implemented,” Rajan said.
As part of the reform process for the farm sector, the government amended the six-and-a-half-decade-old Essential Commodities Act to deregulate food items, including cereals, edible oil, oilseeds, pulses, onion and potato.
The amendment, besides deregulating production and sale of food products, will provide for no stock limit to be imposed on any produce.
Last month, the government approved an ordinance to allow barrier-free trade in agriculture produce outside the notified APMC mandis.”
10:00 AM
Sensex rallies over 400 points in early trade; Nifty tops 10,700
Domestic equities have opened with gains in line with global stocks.
PTI reports: “Equity benchmark Sensex rallied over 400 points in early trade on Wednesday led by gains in index-heavyweights Infosys, Reliance Industries and TCS amid largely positive trend in global markets.
After touching a high of 36,465.34, the 30-share BSE Sensex was trading 423.11 points, or 1.17 per cent, higher at 36,456.17.
Similarly, the NSE Nifty surged 120.15 points, or 1.13 per cent, to 10,727.50.
Shares of Infosys rallied around 3 per cent ahead of its quarterly earnings. Axis Bank, Tech Mahindra, Bajaj Finance, Tata Steel, HCL Tech and IndusInd Bank were among the other gainers.
On the other hand, Bharti Airtel, ITC and Kotak Bank were the laggards.
In the previous session, the BSE barometer ended 660.63 points or 1.80 per cent lower at 36,033.06; while the NSE Nifty closed 195.35 points or 1.81 per cent down at 10,607.35.
Foreign institutional investors were net sellers in the capital market on Tuesday, offloading equities worth Rs 1,565.62 crore, provisional exchange data showed.
According to traders, domestic benchmarks followed US equities which rallied on hopes of a COVID-19 vaccine.”
9:30 AM
Mukesh Ambani to detail post-COVID business plan at AGM; focus on leveraging tech partnerships
Billionaire Mukesh Ambani is likely to announce plans of leveraging recent partnerships with global technology giants such as Facebook as well as a vision to maximise oil to chemical conversion at his flagship Reliance Industries’ annual shareholder meeting on Wednesday, analysts said.
Mr. Ambani, 63, may at the company’s first online AGM also give a sneak preview of his vision for decarbonisation of energy molecules to create value-added products with almost no carbon emissions.
Strategic direction post-COVID-19 and further details on asset monetisation are key expectations from the 43rd AGM of RIL, analysts said.
The AGM is “expected to report on progress on asset monetisation (INViTs and stake sale in O2C business), more details on strategic partnerships in digital business, growth plans on financial vertical, oil to chemical integration progress and new technologies,” Morgan Stanley said.
