Category: Economy

The Sensex reached a new high on June 21, breaking above the 63,583.1 mark set on December 1, 2022. The index witnessed heavy buying in Reliance Industries and Power Grid Corporation. The Nifty 50 registered a record closing at 18,856.85.

On Wednesday, the blue-chip index began at 63,467.46, reaching an intraday high of 63,588.31 and a low of 63,355.95. According to market data, foreign institutional investors sold securities worth ₹1,942.62 crore a day before.

Trade analysts attributed the record gains to sustained foreign inflows into domestic stock markets, supported by strong macroeconomic factors that have helped India set on the path to become the fastest-growing economy this year.

The 30-share Sensex has gained over 4 percent this year and is the first among Asian equities to hit a fresh record high.

Most of the sectoral indices gained last week, powered by heavyweights Nifty Banking, Nifty Financial Services and Nifty IT. Nifty FMCG, Nifty Realty and Nifty Metal were the sectoral indices that ended in negative territory.

The top five gainers on the Nifty 50 were Power Grid Corporation, ONGC, Adani Ports, HDFC Bank and HDFC. On the other hand, JSW Steel, Hindalco, Divi’s Laboratories, M&M and ITC were the biggest losers.

The Government of India urged airlines to devise a mechanism to ensure reasonable airfares amidst a surge in ticket prices. During an hour-long meeting of the airlines advisory group, Civil Aviation Minister Jyotiraditya Scindia on June 5 expressed concerns about the sharp rise in airfares on specific routes.

The Civil Aviation Ministry said a mechanism should be devised by airlines to ensure reasonable pricing within the high RBDs (Reservation Booking Designator) to be monitored by the Directorate General of Civil Aviation.

The Union Ministry also stressed that airlines need to keep a close check on airfare pricing in view of the humanitarian situation and monitor and control any surge in ticket prices to/from that region during calamities. For example, during the Odisha train tragedy, the ministry advised airlines to provide free carriage services to the families of the deceased.

Airfares are neither established nor regulated by the government. The airline pricing system runs in multiple levels (buckets), which are in line with practices being followed globally. The prices are set by airlines based on market conditions, demand, seasonality, and other market forces. The fare increases as demand for seats rises and lower fare buckets get filled quickly.

A Goldman Sachs report has said that the Bombay Stock Exchange (BSE) group of stocks has delivered a 16 percent rupee return on a 5-year rolling period over the past 20 years, which amounted to about 269 stocks that were multibaggers.

Speaking on the report, Sunil Koul, the Asia Pacific Strategist for Goldman Sachs, underlined that upwards of half the Nifty 500 has generated more than 10 times the returns in the period. He said in the last two decades, India’s economy has increased seven times and developed a high investor appetite in terms of putting money into the country for the long haul. The top executive added that the country offers a long-term beta and oversized alpha opportunities within the emerging market.

Opportunities are still live within the domestic cyclical sectors of banking and manufacturing despite the underperformance of the technology sector. Sectors that are already established and have some scale do not require large capex investments and give good returns within two to three years, while sectors such as semiconductors or EVs require a large capex but will deliver impressive results over a longer period of time, Koul said in an interview.

India’s internet economy is set to grow six-fold in the next eight years to reach $1 trillion by 2030, says a recent report by Google, Temasek, and Bain & Company.

The report, ‘The e-Conomy of a Billion Connected Indians’ says that a continuous shift in consumer and merchant behaviour, matched with strong investor confidence, has led India into its ‘Digital Decade’ and put its internet economy on the path to reach $1 trillion from approximately $175 billion currently.

Digital services have become vital to India’s 700 million plus internet users, including the 350-million digital payment users and 220-million online shoppers. With the country expected to see household consumption doubling by 2030, e-commerce will become even more ingrained in the daily lives of Indians.

The report says that all internet sectors are on positive growth paths, with business-to-consumer (B2C) e-commerce contributing about a third of the value, largely driven by increased penetration in smaller towns and cities. B2C’s gross merchandise value at present stands at $65 billion, and is expected to grow six times to reach $380 billion by 2030.

Other e-commerce sectors such as online travel and ride-hailing are also projected to follow similar trajectories with a high probability of increasing at least four to five times over the decade, added the report. Eventually, mainstreaming of digital tools and solutions will lead to promising growth in digital financial services from 8 to 13 percent CAGR between 2022-2030 across subsectors, such as payments, lending, investments and insurance.

The amount of newly added renewable energy capacity in the world is expected to grow by one-third this year, said a report by the International Energy Agency (IEA). The total added capacity is likely to increase by a record 107 gigawatts from 2022 to cross 440 gigawatts, thanks to a strong deployment of solar and wind power generation systems, the report added.

Growth in renewables has been accelerating in Europe due to the energy crisis, with the Ukraine war worsening global inflation, raising the prices of crude oil and other commodities. New policy measures are also driving significant growth in the United States and India over the next two years. On the other hand, China is likely to consolidate its leading position by accounting for almost 55 percent of global additions of renewable power capacity in 2023 and 2024, the IEA said.

In 2023, solar additions will account for two-thirds of the increase in renewable power capacity, while wind power additions are projected to rise sharply by nearly 70 percent from 2022 after slow growth in the last two years. Faster growth in wind power additions, completion of projects delayed by COVID-19 restrictions in China, and supply chain disruptions in Europe and the United States are other reasons for growth.

The Union Cabinet has approved the third revival package for BSNL with a total outlay of Rs. 89,047 crore. It includes the allotment of 4G/5G spectrum through equity infusion.

The Union Cabinet chaired by Prime Minister Narendra Modi on June 7 approved the package. It allotted four spectrum bands – 700 MHz worth Rs 46,338.60 crore, 3,300 MHz for Rs 26,184.20 crore, 26 GHz for Rs 6,564.93 crore, and 2,500 MHz worth Rs 9,428.20 crore.

The authorised capital of BSNL will be increased from Rs. 1,50,000 crore to Rs. 2,10,000 crore. The public entity has been facing intense competition from private players, which have rolled out 4G services at low prices on voice calls and data. With the revival package, BSNL stands to emerge as a stable telecom service provider focused on providing connectivity to remotest parts of India, the union cabinet said in a release.

The new spectrum allotment will help BSNL provide pan-India 4G and 5G services, provide 4G coverage in rural and uncovered villages under various connectivity projects, provide Fixed Wireless Access (FWA) services for high-speed internet, and provide services/spectrum for Captive Non-Public Network (CNPN).

The earlier revival packages for BSNL were announced in 2019 worth Rs. 69,000 crore and 2022, amounting to Rs 1.64 lakh crore. The packages brought stability in BSNL/MTNL, and provided financial support for capex, viability gap funding for rural landlines, financial support for de-stressing the balance sheet, and settlement of AGR dues, merger of BBNL with BSNL, among others.

Carbon dioxide over-emitters owe India an annual compensation of $1,446 per capita till 2050, and a yearly compensation equivalent to 66 percent of its GDP in 2018, says a new study published in the science journal Nature Sustainability.

Industrialised nations of the Global North, such as the US and Germany, are responsible for 90 percent of excessive levels of carbon dioxide emissions and could be liable to pay $170 trillion in compensation to low-emitters such as India to ensure climate change targets are met by 2050.

The researchers obtained remaining global carbon budgets for 1.5 degrees Celsius and 2 degrees Celsius from the IPCC and distributed fair shares across 168 countries, based on population. Next, they compared each country’s fair share against how much carbon dioxide that country has released historically from 1960, together with a business-as-usual scenario and an ambitious scenario where it removes carbon from current levels to net zero by 2050.

Even under ambitious scenarios, the Global North would exceed its collective share of the carbon budget by a factor of three. A few low-emitting countries, especially India, would forgo a majority of total appropriated emissions to balance the excess of over-emitting countries.

The top five over-emitting countries, including the US, Germany, Russia, the UK and Japan, would be liable to pay $131 trillion (more than two-thirds of total compensation). The US holds the single largest climate debt to low-emitting countries at $2.6 trillion/year. The top five low-emitting countries — India, Indonesia, Pakistan, Nigeria and China — are entitled to receive $102 trillion in compensation or reparations.

Benchmark indices ended on strong note on June 7 with Nifty closing above 18,700 due to buying across the sectors. The Nifty 50 Index hit the highest level in over six months during intraday trade, with shares of Britannia and Nestle India hitting record high.

Both Sensex and Nifty advanced on June 7, led by consumer stocks, ahead of the Reserve Bank of India’s monetary policy decision and on hopes of an interest rate pause by other major central banks. All the 13 major sectoral indices logged gains, with high weightage financials and information technology rising 0.3 percent and 0.4 percent, respectively.

At close, the Sensex was up 350.08 points or 0.56 percent at 63,142.96, and the Nifty was up 127.40 points or 0.68 percent at 18,726.40. About 2,214 shares advanced, 1,244 shares declined, and 124 shares unchanged.

Biggest gainers on the Nifty were Britannia Industries, Tata Consumer Products, BPCL, Nestle India and HDFC Life, while losers were Cipla, Kotak Mahindra Bank, Bajaj Finance, M&M and Maruti Suzuki.

Other sectoral indices ended in the green with capital goods, metal, oil and gas, FMCG, power, and realty up 1 percent each. The BSE midcap and smallcap indices also added 1 percent each. 

Tata Consultancy Services (TCS) has been awarded a 10-year mandate to administer and enhance customer experiences for the Teachers’ Pension Scheme in England and Wales.

The Teachers’ Pension Scheme is the second-largest public sector pension scheme in the UK with over 2 million members.

TCS has been chosen by the Department for Education (DfE) to administer and improve customer experiences for the scheme. It will manage the scheme administration services using its future-ready, digitally enabled, omnichannel platform powered by TCS BaNCS™. The TCS platform will facilitate accurate administration of pension records, seamless benefit payments, effective scheme finance management, proactive member engagement, and easy access to information.

The IT company aims to deliver a digital-first, self-service pension experience, providing scheme employers and members with anytime, anywhere access to their account information. The platform will also offer personalised insights to help individuals gain a better understanding of their pension plan, empowering them to make informed decisions, the statement from the company said.

TCS plans to establish a service hub in Darlington, expanding its existing presence in the UK. The company has a significant workforce spread across 30 locations throughout the country.

Unified Payments Interface (UPI) transactions in India are expected to reach 1 billion per day by the financial year 2026-27, accounting for 90% of the retail digital payments, said a report by PwC India.

Calling it the UPI a “game-changer” in India’s digital payments ecosystem, PwC says since its launch in 2016 has gained massive acceptance, thanks to features such as instant transactions and credit to beneficiaries in real time; seamless integration of multiple use cases; using application programming interfaces (APIs); convenience in making payments due to interoperability; secured mode of payments; no additional costs to customers; and adaptive framework for mobile networks and fintechs.

The data in the report said that UPI grew from 18 million transactions and ₹69.61 billion in financial year 2016–2017 to 83,751 million transactions amounting to ₹1,39,204 billion in the year 2022–2023, contributing to a compound annual growth rate of 234% in transactions and 196 percent in value.

The linkage of credit cards on UPI, international transactions enabled through UPI, and credit lines on UPI will bring in additional revenue and provide benefits to all ecosystem players, says the report. It also advised that since the NPCI has recommended an interchange fee up to 1.1 percent of the transaction value to be levied on PPI-UPI transactions greater than ₹2,000, Merchant Discount Rate for small merchants should be waived.