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Market Review: Oil, rupee unleash bears, mow down equities

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Sensex equity Nifty

Mumbai, Oct 6: A free-fall in rupee value coupled with high crude oil prices, along with a massive outflow of foreign funds, dragged the key domestic equity indices lower for the fifth consecutive week.

Additionally, the Reserve Bank of India’s new policy stance of “calibrated tightening”, uncertainty in global trade and fears over fiscal slippages led to the downward trajectory.

The S&P BSE Sensex plunged by over 2,000 points in only three trading sessions, while the NSE Nifty50 has shed over 650 points.

The Indian equity market was closed on Tuesday to observe Gandhi Jayanti.

On a weekly basis, the Sensex closed at 34,376.99 points, lower by 1,850.15 points or 5.10 per cent from its previous close.

Similarly, the wider Nifty50 of the National Stock Exchange on Friday closed at 10,316.45 points, down 614 points or 5.61 per cent from the previous week’s close.

The market breadth on both NSE and BSE was negative in three out of the four trading sessions of the week.

“Domestic markets extended losses week after week on account of depreciation in rupee, higher crude prices, continuous selling by foreign investors, rising US Treasury Bond yields, and of course bloodbath in the small and mid-cap stocks…,” said D.K. Aggarwal, Chairman and Managing Director of SMC Investments and Advisors.

“Fall in the rupee led to a sharp rise in government bond yields, due to increasing expectations that the RBI’s monetary policy committee (MPC) could go for a bigger rate increase than expected. However, the central bank kept rates on hold.”

Apart from high global crude oil prices and the government’s efforts to ease domestic transportation fuels costs, the RBI on Friday belied market expectations of a rate hike. However, the “neutral” stance of monetary policy was changed to “calibrated tightening” which triggered a massive sell-off in the equities market.

The RBI’s move also impacted the foreign participants in the domestic equity markets and the rupee value.

In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors sold scrip worth Rs 9,522.44 crore, while the domestic institutional investors bought Rs 6,933.07 crore stocks in the past week.

Figures from the National Securities Depository (NSDL) suggested that foreign portfolio investors (FPIs) divested Rs 7,497.46 crore, or $1,025.28 million, in the equities segment during the week ended October 5.

On the currency front, the rupee closed at 73.77 on Friday, weakening by Rs 1.29 from its previous week’s close of 72.48 per greenback.

The Indian rupee plunged to a record low of over 74 during the week.

According to Deepak Jasani, Head of Retail Research at HDFC Securities: “It was the worst week in two years. Mid-cap and small-cap stocks witnessed heavy selling pressure through the week (though less than the Nifty). GoI’s decision to ask OMCs (oil marketing companies) to cut prices of petrol and diesel was not welcomed by the market participants.”

“There were no sectoral gainers for the week. The top losers were energy, auto, FMCG, realty and pharma indices.”

The only weekly Sensex gainers were Yes Bank (up 1.48 per cent at Rs 206.20); Wipro (up 1.47 per cent at Rs 325.30 per share).

The major losers were Bharti Airtel (down 16.67 per cent at Rs 296.75); ONGC (down 16.51 per cent at Rs 146.95); Reliance Industries (down 16.21 per cent at Rs 1,049.85); Mahindra and Mahindra (down 12.28 per cent at Rs 768.60); and Hero MotoCorp (down 11.35 per cent at Rs 2,740.85 per share).

IANS

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Excise duty collection surges 48% in FY21 on high fuel levies

The total excise duty in the last financial year was over Rs 2.39 lakh crore.

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New Delhi, Jan 17 : As the government has kept excise duty on petrol and diesel elevated amid the pandemic with a view to increase revenue, the total excise duty collection during April-November FY21 has surged nearly 48 per cent as compared to the year ago period.

The excise duty collection during the first eight months of the current financial year was over Rs 1.96 lakh crore, compared to over Rs 1.32 lakh crore collected during April-November FY20, official data showed.

The collection in November 2020 was highest so far in the financial year 2020-21 at Rs 35,703 crore. In November 2019, excise duty collection stood at Rs 18,948 crore.

The total excise duty in the last financial year was over Rs 2.39 lakh crore.

As fuel prices are at record high despite low crude oil prices, demand has been raised from several quarters to reduce the excise duty on petrol and diesel to provide relief to the common man.

In the national capital, petrol is sold at a record high level of Rs 84.70 a litre while diesel is priced at Rs 74.88 per litre.

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Bill Gates is America’s biggest farmland owner

Microsoft founder and philanthropist Bill Gates owns the largest chunk of private farmland in the US across 18 states, a new report has revealed.

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San Francisco: Bill and Melinda Gates amassed 242,000 acres of land in the US, with the largest holdings in Louisiana (69,071 acres), Arkansas (47,927 acres) and Nebraska (20,588 acres), according to The Land report.

Bill Gates also owns a stake in more than 24,800 acres of transitional land outside of Phoenix.

Research indicated that the lands across the US is held by Cascade Investment LLC, Gates’ private investment vehicle.

“Gates also backs online used-car seller Vroom through Cascade as well as the Canadian National Railway Company,” Geek Wire reported.

According to the Tri-City Herald, a 14,500-acre swath of choice Eastern Washington farmland in the Horse Heaven Hills in Benton County has just traded hands for almost $171 million – part of Gates’ holdings.

It is unclear why Gates has invested so heavily in farmland, but it could be connected to climate change.

The Bill & Melinda Gates Foundation launched a new nonprofit group a year ago, focused on helping small-scale farmers in developing countries with the tools and innovations they’ll need to deal with the effects of climate change.

Bill Gates is currently at the third spot on the Bloomberg Billionaires Index with a net worth of $132 billion.

But even with his big new agricultural holdings, Gates still doesn’t rank in the Top 100 private landowners overall in the US, considering owners of land of all types.

The list is topped by Liberty Media’s John Malone, with 2.2 million acres of ranches and forests. Amazon CEO Jeff Bezos makes that list at No. 25 with 420,000 acres.

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HDFC Bank’s Q3 standalone net profit rises 18%

The rise in net interest income was driven by advance growth of 15.6 per cent and a core net interest margin for the quarter of 4.2 per cent.

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HDFC Bank

Mumbai, Jan 16 : Lending major HDFC Bank on Saturday reported an 18.1 per cent increase in standalone net profit for the quarter ended December 31 of FY21 on a year-on-year basis.

The bank’s net profit for the third quarter of FY21 rose to Rs 8,758.3 crore on a YoY basis.

“After providing Rs 3,013.6 crore for taxation, the bank earned a net profit of Rs 8,758.3 crore, an increase of 18.1 per cent over the quarter ended December 31, 2019,” the bank said in a statement.

The bank’s net revenues (net interest income plus other income) grew to Rs 23,760.8 crore during the period under review from Rs 20,842.2 crore for the quarter ended December 31, 2019.

Besides, net interest income (interest earned less interest expended) for the quarter ended December 31, 2020 grew by 15.1 per cent to Rs 16,317.6 crore from Rs 14,172.9 crore during the corresponding period of the previous fiscal.

The rise in net interest income was driven by advance growth of 15.6 per cent and a core net interest margin for the quarter of 4.2 per cent.

“The bank’s persistent focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at 146 per cent, well above the regulatory requirement.”

Furthermore, the bank made provision and contingencies worth Rs 3,414.1 crore as against Rs 3,043.6 crore during the quarter ended December 31, 2019.

“Total provisions for the current quarter include contingent provisions of nearly Rs 2,400 crore for proforma NPA as described in the asset quality section.”

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