Business News Live: India's manufacturing incentives progress amid efforts to cut China imports

Amazon Web Services (AWS) India has been selected by the Public Sector Bank Alliance to offer cloud computing services to the country's public sector lenders.

Public Sector Bank Alliance (PSBA) is an umbrella organisation formed by 12 public sector banks and acts as a nodal body to deliver end-to-end technology-enabled banking services to them. Its partner banks include SBI, UCO Bank, Union Bank, PNB, Central Bank of India, Canara Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Indian Bank, Punjab & Sind Bank, and Indian Overseas Bank.
 

Fast-food chain Wow Momo Foods has announced its intention to go public within the next two years, aiming to follow in the footsteps of Domino's Pizza and leverage the growing demand in India's burgeoning fast-food sector.

The fast-food market in India, currently valued at $5 billion, has experienced substantial growth, particularly among low- and middle-income families. Wow Momo, valued at Rs 2,500 crore and boasting a network of 650 stores, is set to become the first major local fast-food chain to list publicly, capitalising on this shift in consumer preferences.

Backed by Tiger Global, Wow Momo reported a revenue of nearly 4.8 billion rupees ($57.47 million) for the fiscal year ending in March. Co-founder and CEO Sagar Daryani stated that the company aims to double its revenue to Rs 1,000 crore over the next 30 months. "The public markets are really, really growing ... One homegrown fast-food chain IPO in India will change the script for the fast-food play in the country," he remarked.

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Union Minister of Labour and Employment, Mansukh Mandaviya, has urged Tamil Nadu’s Chief Minister MK Stalin to take action and find a resolution to the ongoing strike by over 1,000 Samsung Electronics workers. The strike, now in its third week, has disrupted operations at Samsung’s plant near Chennai, with workers demanding higher wages and union recognition.

The minister has asked for an "early and amicable" resolution to the matter, news agency Reuters reported, quoting a government source. The Tamil Nadu state government is actively involved in mediating talks, but as of now, neither Samsung nor the Tamil Nadu government has responded to requests for comment from media.

The strike, which began on September 9, centers around workers’ demands for wage increases and union recognition at Samsung's home appliances plant. The factory is crucial for Samsung, contributing roughly a third of its $12 billion annual revenue in India. The plant is located in a prime industrial area near Chennai, alongside global manufacturing giants like Foxconn and Dell.

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The Federal Reserve's aggressive start of the easing cycle has rekindled inflation worries in the U.S. bond market, as some investors fear looser financial conditions could re-ignite price pressures.

Yields on longer-dated Treasuries that are most sensitive to the inflation outlook have risen to the highest since early September, with some investors worried that the Fed's shift in focus from beating back inflation to protecting the job market could allow for a rebound in price pressures.

"I think there are questions around how quickly inflation will be able to get to the Fed's target if we're in a cutting environment, and if we're in an environment where the Fed is saying we want to support the labor market before the labor market gets weak," said Cayla Seder, macro multi-asset strategist at State Street Global Markets. She expects long-term yields, which rise when prices fall, to climb further as the market bets on stronger growth and inflation.

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Google Cloud, Norway's sovereign wealth fund and Swiss bank UBS have joined forces to back a bid to run Britain's real-time record of transactions in bond markets, the fixed income technology firm leading the plan told Reuters.

British regulators last year unveiled proposals to build a "consolidated tape" that would collate market data across stock and bond markets, with a bond data feed launching first, to help investors spot the best deals and boost the appeal of UK capital markets.

Long a feature of Wall Street, the European Union has approved a law requiring trading platforms hand over price data for bonds and stocks, for a fee, to an operator.

Bond trading is fragmented across multiple venues and often done bilaterally rather than via an exchange, limiting price transparency and arming some players with more information than others.

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Japan's 10-year government bond yield hit a more than seven-week low on Wednesday, as prospects faded for further rate hikes by the Bank of Japan in the near term.

The 10-year JGB yield fell to 0.795%, its lowest since Aug. 5 when it sank in a market turmoil that sent the Nikkei 225 index 12% lower. The yield was last up at 0.5 basis point at 0.81%.

Expectations for more rate hikes have fallen after comments from the BOJ governor, said Keisuke Tsuruta, a senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.

The BOJ can afford to spend time watching developments in financial markets and overseas economies as it sets monetary policy, Governor Kazuo Ueda said on Tuesday, suggesting that the central bank was in no rush to raise interest rates further.

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Japan's securities watchdog has recommended imposing a 21.8 million yen ($151,715) penalty on Nomura Holding's brokerage unit for alleged manipulation in the government bond futures market, it said on Wednesday.

The Securities and Exchange Surveillance Commission (SESC) made the recommendation to the banking regulator, the Financial Services Agency (FSA), which hands out such punishments in Japan, the SESC said at a briefing.

A SESC investigation found that a trader at Nomura, Japan's largest brokerage firm, had manipulated the price of 10-year government bond futures contracts in March 2021, it said.

The trader made a series of derivative transactions in order to induce others to buy or sell government bond future contracts, making a profit of 14.8 million yen ($102,777), the SESC said.

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There is a "critical need" for coal imports, and the country has reported a marginal rise of 0.9 per cent to 90.51 mt in the April-July period of FY25, according to an official statement.

India, which has the fifth-largest coal reserves in the world, is also its second-largest consumer, driven by a rapidly growing economy, Ministry of Coal said on Wednesday.

Coal production during the April-July FY25 period increased 9.56 per cent to 321.40 MT from 293.35 MT in FY24.

"However, the current consumption landscape reveals a critical need for imports, particularly for coking coal and high-grade thermal coal, which are not sufficiently available within domestic reserves. This shortfall necessitates imports to support key industries, including steel," it said.

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The Asian Development Bank (ADB) on Wednesday retained India's growth forecast for the current fiscal at 7 per cent and said that the economy is expected to accelerate in the coming quarters on improved farm output, and higher Government spending.

In its Asian Development Outlook (ADO) update of September, the ADB said exports in the current fiscal will be higher than earlier projected, led by larger services exports. However, merchandise export growth will be relatively muted through the next fiscal.

" GDP growth is expected at 7 per cent in fiscal year 2024 (FY2024, ending 31 March 2025) and 7.2 per cent in FY2025, both as forecast in ADO April 2024," the ADB said, adding that India's growth prospects remain robust.

The Indian economy grew 8.2 per cent in the last fiscal (2023-24). The RBI projects growth to be 7.2 per cent in the current fiscal.

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Global growth is in the process of stabilising as the drag from central bank rate hikes fades and falling inflation boosts households' incomes, the OECD said on Wednesday, marginally raising its outlook for this year.

The world economy was projected to grow 3.2 per cent both this and next year, the Organisation for Economic Cooperation and Development forecast, nudging up its 2024 forecast from 3.1 per cent previously while leaving 2025 unchanged.

As the lagged impact of central bank tightening evaporates, interest rate cuts would boost spending going forward while consumer spending benefitted from lower inflation, the OECD said in an update of its latest economic outlook.

If a recent decline in oil prices persists, global headline inflation could be 0.5 percentage points lower than expected over the coming year, the Paris-based OECD said.

With inflation heading towards central bank targets, the OECD projected that the US Federal Reserve's main interest rate would ease to 3.5 per cent by the end of 2025 from 4.75 per cent-5 per cent currently and European Central Bank would cut to 2.25 per cent from 3.5 per cent now.

US growth was expected to slow from 2.6 per cent this year to 1.6 per cent in 2025 though interest rate cuts would help cushion the slowdown, the OECD said, trimming its 2025 estimate from a forecast of 1.8 per cent in May.

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Indian equity funds are holding their highest cash reserves in five years, reflecting fund managers' growing caution over elevated market valuations and potential macroeconomic risks. According to Morningstar data, Indian active equity funds with assets of at least $1 billion had an average of 5.39 per cent of their portfolios in cash by the end of August 2024, marking the highest levels since 2019.

The caution stems from several factors, including concerns over global economic conditions, geopolitical tensions, and domestic market overvaluation. "While the market has performed well, risks like economic slowdowns, changing interest rate regimes, geopolitical tensions, and market overvaluation persist," said Sonam Srivastava, founder and fund manager at Wright Research.

Though the increase in cash levels is partially attributed to new fund inflows, the underlying sentiment among fund managers is one of prudence. "The elevated cash levels suggest fund managers expect a potential market correction and are seeking to mitigate possible losses," said Mahesh Patil, chief investment officer at Aditya Birla Sun Life Asset Management Company. Patil highlighted that the market's rapid rise hasn't been matched by significant improvements in fundamentals.

This cautious approach follows a weaker earnings performance in the first quarter of the fiscal year, where over half of Indian companies missed earnings expectations. "Valuation concerns are growing, particularly in certain sectors that appear overstretched," noted Abhishek Goenka, CEO of IFA Global.

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Food and grocery delivery major Swiggy has received capital markets regulator Sebi's clearance to launch its much anticipated Initial Public Offering ( IPO ), sources said on Wednesday.

Swiggy filed its offer document on April 30 through the confidential pre-filing route, keeping details undisclosed for the time being. Advertisement Under the confidential filing process, Swiggy will submit two updated draft prospectuses after Sebi's approval -- one addressing the regulator's feedback and the other for public comments over 21 days.

Only then will the final prospectus be filed, and the company can launch roadshows for the IPO , sources said. Swiggy , founded in 2014, had a valuation of nearly USD 13 billion in April. Advertisement The company's annual revenue stood at USD 1.09 billion as on March 31, 2023 and has more than 4,700 employees, according to Tracxn, a global startup data platform.

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As of today, September 25, 2024, petrol and diesel prices across India’s major cities remain largely unchanged. In Delhi, petrol continues to be priced at Rs 94.72 per litre, with no fluctuation from the previous day or the previous month. Diesel in the capital is also steady at Rs 87.62 per litre. This trend reflects stable fuel prices under India’s dynamic fuel pricing system, which has been in place since June 2017. Prices are revised daily at 6 AM, aimed at ensuring greater transparency and curbing speculative fluctuations in the market.

Several factors contribute to fuel price changes, including international crude oil prices, the exchange rate between the rupee and the US dollar, and global geopolitical tensions. These factors are critical in determining the cost of crude imports. On the domestic front, changes in excise duties, state-level taxes, and variations in demand also play a role in shaping fuel prices. Gross refining margins and dealer commissions further affect the final prices paid by consumers.

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Volkswagen's showdown with powerful labour leaders over how to tackle spiralling costs at underused German factories has triggered intense soul-searching about the root causes of the carmaker's problems.

Complex governance structures, misjudged investments in EVs, poor management decisions, sliding revenues from China and Germany's crippling bureaucracy have all variously been blamed for the challenges facing the world's second-biggest automaker.\

Yet a Reuters review of factory capacity utilisation data across Europe for six carmakers shows that Volkswagen is hardly an outlier and it may be in a better place than some of its major rivals when it comes to underused plants.

Renault and Stellantis, for example, both have lower average capacity utilisation rates in Europe than VW, according to the figures compiled for Reuters by GlobalData, which included numbers for BMW, Ford and Mercedes-Benz as well.

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The Indian equity benchmarks were trading in a narrow range defying a rally in global markets spurred by stimulus measures by China to revive its slowing economy. The Sensex was stuck in a range of 253 points and Nifty 50 index touched an intraday high of 25,954 and low of 25,891.

China, the world's second largest economy, unveiled a slew of stimulus measures to boost its slowing economy thereby boosting stock markets across the world. China's central bank of Tuesday announced its biggest stimulus package since COVID-19 pandemic to pull the economy out of deflation towards the government's growth target.

Reacting to the stimulus measures announced by Chinese government, stock markets across the world surged with many hitting record highs. In the United States, both Dow Jones and S&P 500 hit new all-time highs boosted by mining shares as China is one of the world's biggest markets for iron ore and other mining products which are used as raw materials. Dow Jones surged 0.2 per cent to close at record high of 42,208.22 and S&P 500 index climbed 0.25 per cent to an all-time high of 5,732.93.
 

Gold prices surged to record high of Rs 76,000 per 10 grams on the Multi Commodity Exchange. Gold futures for October expiry rose as much as 1.32 per cent to hit an all-time high of Rs 76,000 on the MCX, data from the commodity exchange showed. Surge in gold price came after price of gold on Commex rose 0.32 per cent to $2,685.90.

Slew of reasons like rising geo political tensions across the world with Israel-Hamas war and Russia-Ukraine war and larger than expected interest rate cut by the US Federal Reserve are leading to surge in demand for gold which is considered as a safe haven asset.

Demand for gold further got a boost after China unveiled slew of measures like interest rate cuts and more funding in a move to revive the slowing economy.

China, the world's second largest economy, unveiled a slew of stimulus measures to boost its slowing economy thereby boosting stock markets across the world. China's central bank of Tuesday announced its biggest stimulus package since COVID-19 pandemic to pull the economy out of deflation towards the government's growth target.

Reacting to the stimulus measures announced by Chinese government, stock markets across the world surged with many hitting record highs. In the United States, both Dow Jones and S&P 500 hit new all-time highs boosted by mining shares as China is one of the world's biggest markets for iron ore and other mining products which are used as raw materials. Dow Jones surged 0.2 per cent to close at record high of 42,208.22 and S&P 500 index climbed 0.25 per cent to an all-time high of 5,732.93.

Australia's shares also reacted positively with its miners boosting the index by 0.1 per cent to 8,148.
 

The Indian equity benchmarks are set to open on a flat note as indicated by Nifty futures traded at Gift City in Gandhinagar amid strong cues from global markets. Nifty futures at Gift City rose 0.02 per cent or 4.5 points to 25,325 amid strong global cues.

China and Hong Kong stocks rallied broadly for a second day on Wednesday as investors basked in the afterglow of a wide-ranging stimulus package announced in the previous day.

In early trade, China's blue-chip CSI300 Index and the Shanghai Composite Index gained more than 2 per cent each. Hong Kong benchmark Hang Seng jumped 3 per cent, while Hang Seng Tech Index surged more than 3 per cent.

Beijing on Tuesday announced a slate of support measures including rate cuts, mortgage requirement easing, and fresh funding for equity purchases, in a bid to prop up the ailing economy.

In the wake of the announcement, the People's Bank of China (PBOC) on Wednesday cut the rate of one-year medium-term lending facility (MLF) loans to some financial institutions to 2.00 per cent from 2.30 per cent.
 

China and Hong Kong stocks rallied broadly for a second day on Wednesday as investors basked in the afterglow of a wide-ranging stimulus package announced in the previous day.

In early trade, China's blue-chip CSI300 Index and the Shanghai Composite Index gained more than 2 per cent each. Hong Kong benchmark Hang Seng jumped 3 per cent, while Hang Seng Tech Index surged more than 3 per cent.

Beijing on Tuesday announced a slate of support measures including rate cuts, mortgage requirement easing, and fresh funding for equity purchases, in a bid to prop up the ailing economy.

In the wake of the announcement, the People's Bank of China (PBOC) on Wednesday cut the rate of one-year medium-term lending facility (MLF) loans to some financial institutions to 2.00 per cent from 2.30 per cent.
 

China's central bank lowered the cost of its medium-term loans to banks on Wednesday in a move consistent with broad policy easing measures announced a day earlier to shore up a flailing economy.

The People's Bank of China (PBOC) said it cut the rate on 300 billion yuan ($42.66 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions to 2.00 per cent from 2.30 per cent.

The bid rates in Wednesday's operation ranged from 1.90 per cent to 2.30 per cent, and the total balance of MLF loans now stands at 6.878 trillion yuan, the central bank said in an online statement.
 

The S&P 500 and Dow ended at record highs on Tuesday, shrugging off weak consumer confidence data, as mining stocks surged following China's announcement of a sweeping stimulus package.

The indexes initially trimmed gains after a report from the Conference Board revealed an unexpected decline in US consumer confidence in September, driven by growing concerns about the labor market's health.

“Today's price action is predominantly about what happened overnight with the policy announcements from China, direct support for their equity market and pledges to cut interest rates in the future, has caused a really sharp move in international stocks in general,” said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina.

“That's feeding through into parts of the US market, where you see some more China-sensitive, more cyclical industries like metals and mining materials sector outperforming.”

The Dow Jones Industrial Average rose 83.57 points, or 0.20 per cent, to 42,208.22, the S&P 500 gained 14.36 points, or 0.25 per cent, to 5,732.93 and the Nasdaq Composite gained 100.25 points, or 0.56 per cent, to 18,074.52.

Former cryptocurrency executive Caroline Ellison was sentenced on Tuesday to two years in prison for her role in her former boyfriend Sam Bankman-Fried's theft of $8 billion in customer funds from the now-bankrupt FTX exchange he founded, even as the judge recognized her extensive cooperation with prosecutors.

US District Judge Lewis Kaplan said at a sentencing hearing in Manhattan federal court that he was not comfortable with remorse and cooperation being a "get out of jail free card" in a case so serious. Prosecutors have called Bankman-Fried's actions one of the biggest financial frauds in US history.

Ellison, 29, pleaded guilty to seven felony counts of fraud and conspiracy and testified as a prosecution witness in the trial of Bankman-Fried, who was convicted of fraud and other charges last year and is serving a 25-year prison sentence arising from FTX's 2022 collapse.