QBiz: Nifty Hits All Time High; Retail Inflation Rises to 3.65%

A roundup of all the important business news making the headlines.

Image used for representational purposes. (Photo: Reuters)

1. Nifty Hits All Time High of 9,122.75, Sensex Surges 616 Points After Big BJP Win

The Nifty jumped to life highs on Tuesday after the BJP’s thumping win in the crucial state of Uttar Pradesh.

The Nifty, up 11% so far this year, crossed its previous life high of 9,119 to hit 9,122.75 before ending the day 1.71%, or 152.45 points, higher at 9,087. This is the index’s biggest single-day gain in points since 1 February and caps a strong rebound since the December 26 low of 7,893 on demonetisation worries.

The Sensex surged by 616 points, or 2.12%, intra-day before ending the day at 29,442.63, up 496.40 points. This is its biggest gain since 25 May last year. The index is the best performer among all developed and emerging market indices in local currency terms in the past three months.

The rupee surged 79 paise to a 16-month high of 65.82 to the dollar as exporters sold more dollars and foreign investors bought local shares. BSE data showed that foreign investors bought local shares worth Rs 4,089 crore, their biggest single-day purchase since 17 February when they purchased Rs 8,059 crore.

(Source: Economic Times)

Read The Quint’s report here.

2. Retail Inflation Rises To 3.65% in February

Retail inflation in India rose to 3.65 percent in February 2017, marginally higher than a month ago, showed data released by the government on Tuesday.

The increase in the consumer price index was in line with a poll of economists conducted by Bloomberg, which pegged inflation at 3.6 percent in February compared to 3.17 percent in January.

Data released on Tuesday showed that the decline in food prices is starting to reverse, pushing up headline inflation.

• Food prices rose 2.01 percent in February vs 0.61 percent in January
• Food and beverage prices rose 2.46 percent
• Fuel and lighting inflation increased 3.9 percent
• Clothing and footwear prices increased 4.3 percent

While retail inflation remains in check, wholesale price index (WPI) based inflation rose 6.55 percent in February to its highest level in over three years. The divergence in the WPI and CPI indices widened to nearly 300 basis points in February.

(Source: BloombergQuint)

3. Flipkart Banks on Smartphones to Boost Sales in 2017-18

E-commerce firm Flipkart Ltd expects gross sales to increase by 50-60 percent in the next financial year, powered by its reclaimed dominance of online smartphone sales.

Apart from smartphones, which account for roughly half of all e-commerce sales in India, Flipkart will focus on increasing sales of large appliances, fashion and furniture, chief operating officer Nitin Seth said in an interview. Seth added that the company will start selling groceries later this year.

The thing about the e-commerce industry is that it’s pretty much a function of whether Flipkart grows. So, if we grow by 50-60 percent, which we are very confident of, we believe that the industry will grow at 40-50 percent and we definitely hope to further increase our market share lead this year.

Nitin Seth, COO, Flipkart

Flipkart also expects the e-commerce industry to bounce back in the coming months after a strong start to the year.

(Source: Livemint)

4. E-Wallet Firms Reject Government Plan to Provide Cover to Their Users

Digital wallet firms in the country have turned down a government proposal to provide insurance to their users, according to people aware of the development.

After the union government notified that some high-value notes would no longer be legal tender last November, it mooted a proposal that wallet firms should provide insurance to their users against any misuse of their money, just like various credit card companies do.

Wallet firms, however, have turned down the proposal citing its financial unviability, according to a government official. The proposal was mooted over a month ago by the government and the wallet companies got back with their reservations last week.

(Source: Economic Times)

5. IndusInd Bank To Acquire IL&FS’ Securities Services Subsidiary

IndusInd Bank Ltd. has agreed to acquire 100 percent stake in brokerage IL&FS Securities Services Ltd. from its parent Infrastructure Leasing and Financial Services Ltd. (IL&FS) and other shareholders.

The bank did not disclose the value of the transaction in its filing to stock exchanges.

“This acquisition brings scale to this business, complements our current product offerings and fits nicely into our strategy of creating differentiated businesses with domain expertise,” an IndusInd Bank statement quoted Managing Director and Chief Executive Officer Romesh Sobti as saying.

The transaction will be completed in three months subject to regulatory approvals, the bank said in the statement.

(Source: BloombergQuint)

6. 3 CIL Subsidiaries Slash Valuations by At least 75%

Boards of three subsidiaries of state-run Coal India Limited have slashed valuations of the shares of these companies by at least 75% over the values declared earlier this month. The earlier valuations, according to the merchant banker of the listed monopoly miner, did not reflect the true valuation of either the subsidiaries or the parent.

But even as the valuations have been reduced, the amount of money that Coal India will receive post reduced valuation through proposed share buybacks remains the same at Rs 5,063 crore.

In fresh announcements of buyback post revaluation, the number of shares to be bought back has been increased to keep the total sum the same.

(Source: Economic Times)

7. Mahindra Pitches its Only Car as a Successor to the Ambassador

Mahindra and Mahindra Ltd plans to redesign the only car in its stable, Verito, to cater to the needs of India’s fast-growing taxi segment as it looks to fill the void created by Hindustan Motors’ Ambassador, a top executive at the firm said in an interview.

The CK Birla Group-owned Hindustan Motors sold the brand Ambassador to French company PSA Group in February.

The Ambassador has a cult following among some retro-minded enthusiasts in the country. It was the vehicle of choice (or rather, given the limited choice, default) of thousands of owners since 1957 due to its sheer ruggedness and ability to manoeuvre India’s potholed roads. It was hugely successful in India’s small car market, and in particular with the government. This was, of course, before Maruti Udyog Ltd’s Maruti 800 killed its appeal. Today, Maruti’s SX4 has replaced the Ambassador in government circles.

Mahindra wants to occupy this space vacated by the Ambassador.

(Source: Livemint)

8. SEBI Probes Broker-Bourse Collusion on Dark Fibre Link

The capital markets regulator will scan internal emails of brokers, their communication with the leading exchange, and trade data for past seven years to find out whether any brokerage using the ‘dark fibre’ connection received preferential treatment from bourse officials.

Last week, the Securities & Exchange Board of India (SEBI) asked over a dozen brokerages to share a string of information along with their agreement with Sampark Infotainment — a little-known agency which laid the dark fibre between the National Stock Exchange and Bombay Stock Exchange.

While Sebi has asked for trade numbers since 2010, trades using the expensive dark fibre connection began in end 2014-15. The emails to member brokers were sent by an official of Sebi’s Market Intermediaries Regulation and Supervision Department.

(Source: Economic Times)

9. Jio Effect: Telecom Firms’ Ad Spending Rose 50% in 2016, Says Report

Call it the Jio effect: telecom firms increased their advertising spends 50% to around Rs 1,000 core in 2016. And they could increase it by up to another 15-20% this year, say media buyers.

Reliance Jio Infocomm Ltd launched its services in September last year, offering free data and voice calls till the end of March. Its high-decibel launch prompted frenzied advertising by its main rivals, Bharti Airtel Ltd, Idea Cellular Ltd and Vodafone India Ltd. Idea and Vodafone have since announced their intent to merge.

Together, the four firms spent around Rs 1,000 crore, according to the Pitch Madison Advertising Report 2017 published by media buying agency Madison World.

And almost half that was spent by the market leader; Airtel spent Rs 450-550 crore on advertising as against Rs 250-350 crore in 2015, while Reliance Jio just spent Rs 100-150 crore, according to the Pitch Madison report.

(Source: Livemint)