When RBI announced the one-time debt recast plan last week, it was careful not to fall into the trap that a similar exercise had created during 2010-2016, when continuous evergreening of loans had left Indian banks saddled with heaps of bad loans. Hence the panel to oversee the restructuring plan. Fitch says by allowing the recast, RBI has also opened a window for banks to build capital buffers even as they put off full recognition of the Covid impact on loan portfolios. Indian banks are already burdened with over $120 billion in bad loans and the sector is ranked third-worst among 13 major world economies in asset quality. It remains to be seen if the once-bitten-twice-shy banking system can manage this round better.
MARKET CUES: Where do we stand >>>  | Nifty futures on the Singapore Exchange traded 103 points lower at 7 am (IST) this morning, signaling a negative start ahead for Dalal Street. |
| On Tuesday, Nifty50 breached its recent swing high of 11,341 on an intraday trade basis, but could not hold above that level. Analysts said the formation of indecisive candles over the past couple of days suggests the bulls are tired. |
| Asian stocks drifted this morning amid doubts over the timing of a spending package from Washington. Shares ticked lower in Shanghai, Sydney and Seoul. Hong Kong opened flat, while Japan climbed. |
| US stocks closed lower on Tuesday, with the S&P 500 and Dow snapping a seven-day streak of gains and falling late in the session on growing uncertainty about breaking a stalemate in Washington over a fiscal stimulus deal. Dow ended 104.53 points, or 0.38%, lower, while S&P500 lost 26.78 points, or 0.80%, and the Nasdaq 185.53 points, or 1.69%. |
| The rupee appreciated by 12 paise to close at 74.78 against the US dollar on Tuesday tracking weakness in the greenback and gains in the domestic equity market. |
| The dollar found support on Wednesday, as a jump in US yields pushed it higher against the Japanese yen. The greenback was steady against the euro and firm against the Australian dollar. The offshore yuan fell 0.1%. |
| Crude oil prices rose marginally. WTI crude traded 0.4% higher at $41.76 per barrel. |
| Gold prices plunged to Rs 53,951 per 10 gm this morning while silver dived to Rs 72,354 a kg. On MCX, gold futures slipped nearly 6% to Rs 51,739 while silver futures nosedived 12% to settle at Rs 66,347 a kg. In global markets, the yellow metal rose 0.3 per cent this morning after Tuesday's massive fall to trade at $1,917.57 an ounce. |
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IT shares seeing most upgrades… Technology shares have seen some of the biggest target price upgrades by analysts after the June quarter results as these companies are seen to be among the best insulated in the downturn. Analysts increased their price targets on shares of companies — both large- and midcap — by 11-29%. Though many of these stocks are close to these targets after the recent rally, analysts think there is more room for upside. TCS, Infosys and HCL Tech are their top picks. Companies that have seen the most target price hikes after the June quarter results are IT firms like NIIT Technologies, Infosys, Mphasis, L&T Infotech, Cyient, Wipro, Tech Mahindra, HCL Technologies, Mindtree, KPIT Technologies and TCS.
Read More New govt stimulus in the works... The government is likely to soon announce fresh measures, including big-ticket infrastructure projects and policy changes, to make local industry more competitive, as part of efforts to rebuild the economy in the wake of the Covid-19 pandemic, said people with knowledge of the matter. Prime Minister Narendra Modi may himself unveil some of these steps, which could also include an initiative to reorient the tax administration, said government sources.
Read More SC declares daughters equal inheritors… Putting the last nail on male primacy in division of Hindu ancestral property, the Supreme Court, in a landmark judgment on Tuesday, cleared the legal cobwebs to declare daughters will have inheritance rights equal to those of sons from properties of fathers, grandfathers and great-grandfathers right from the codification of the law in 1956. The bench said irrespective of whether the father was alive or not, daughters born before September 9, 2005, too could claim equal right in inheritance. A bench of Justices Arun Mishra, S Abdul Nazeer and M R Shah ironed out the confusion arising from the apex court's conflicting interpretations of the amended Section 6 of Hindu Succession Act, which came into force on September 9, 2005.
Read More SUVs spring hope for Motown… When the going gets tough, off-roaders get going. SUVs are steering a comeback for the Indian car industry, providing some much-needed cheer to the coronavirus-battered companies. According to numbers released by industry body Siam, SUVs clocked 14% growth in volumes in July over the year-ago period. Models such as Hyundai's Creta and Venue, Kia's Seltos, Maruti's Brezza and Ertiga, Mahindra's Bolero, and even the Rs 1 crore-plus Mercedes-Benz GLS have been among those powering the SUV surge.
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Industrial output contracts in June… India's industrial output contracted for the fourth successive month in June, led by a decline in manufacturing, mining, electricity and capital goods segments as the coronavirus-induced lockdown continued to take a heavy toll on the crucial sector. Data released by the National Statistical Office (NSO) on Tuesday showed the index of industrial production (IIP) contracted 16.6% in June, compared with a fall of 33.9% in the previous month and 1.3% expansion in the same month last year. For the April-June period, industrial output contracted 35.9% compared with an expansion of 3% in the year-ago period.
Read More Gold, silver on crash course… Gold and silver prices fell for the third day in a row, amid the dollar holding on to gains and Russia's announcement of a Covid-19 vaccine. Spot price for 24 carat gold in India fell over 5% to Rs 52,440 per 10 gm, while the price for 22 carat was Rs 48,091. The price of silver too declined, was down 7% to fall below the Rs 70,000 level per kg on Tuesday.
Read MOre I-T raids on Chinese entities… The income-tax department on Tuesday launched a massive search operation on a few Chinese individuals, their Indian associates and some bank employees in Delhi, Gurgaon and Ghaziabad for suspected links to money laundering and hawala deals running into several thousand crores of rupees. Premises of the suspects were searched "based on credible information," an I-T department statement said.
Read More Meanwhile... Govt identifies 10 sectors for disinvestment… The government has identified 18 strategic sectors for disinvestment, including coal, crude oil, power, steel, telecom, atomic energy and defence, allowing presence of 3-4 PSUs in each space. The 18 sectors have been divided into three categories — mining and exploration, manufacturing and services.
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