Business Live: Stocks drop in early trade; IMF backs center’s farm laws

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The Nifty and the Sensex opened the day on a negative note, witnessing a correction amid the record rally.

Join us as we follow the top business news through the day.

12:30 PM

India fifth largest market; focussed on meeting language needs, enhancing ease of access: Wikipedia

Online encyclopedia Wikipedia has a long-term commitment to India and is focussing on bringing more users to its platform by meeting language needs and introducing tools to ease access, a top Wikimedia Foundation executive said.

Wikipedia, which is operated by non-profit organization Wikimedia Foundation, already counts India as its fifth largest market. It gets about 750 million page views a month from the Indian audience.

“India is not just the fifth largest Wikipedia source of traffic for us, it is a country of hundreds of millions of people who have real clear needs for knowledge, and to themselves have knowledge that should be shared and represented with the world… we see the multiplicity of languages ​​as both an opportunity and a challenge, ”Wikimedia Foundation CEO Katherine Maher said.

She added that certain language communities are much more active than others, and the organization is looking at ways to support the different language needs across the country given how large and diverse those needs are actually.

12:00 PM

Indian bond yields rise in absence of OMO announcement

The central bank may not step in to prop up debt.

Reuters reports: “India’s benchmark bond yield rose on Friday to a three-week high as a lack of an open market operation announcement disappointed investors ahead of a debt sale and variable rate reverse repo auction later in the day.

The Reserve Bank of India last week said it would conduct a variable rate reverse repo auction for 2 trillion rupees ($ 27 billion) on Jan. 15 on review of the evolving liquidity and financial conditions.

“It has been decided to restore normal liquidity management operations in a phased manner,” the RBI said.

Markets read the release as an indication that the RBI was looking to roll back the massive cash surplus in the banking system despite its reiteration that it will ensure availability of ample liquidity.

“The market is confused about what the RBI is trying to do. A lot of times it feels like the RBI does not realize the fallout of its actions and then tries to balance it out,” said a senior debt trader at a private bank .

The benchmark 10-year bond yield was trading at 5.95% versus 5.93% on Thursday and off the day’s high of 5.96% – its highest since Dec. 24.

Traders said the absence of a special OMO announcement for next week after three consecutive weeks of such auctions also dented demand for bonds, adding that they expected yields to rise further if there was no announcement by end of day.

Results of the 220 billion rupees worth bond sale and the variable reverse repo rate cut-off will be also monitored.

“The RBI has taken the first step towards reverting to pre-COVID liquidity management operations in a phased manner,” Upasna Bhardwaj, economist at Kotak Mahindra Bank, wrote in a recent note.

“The rate up to which the RBI will be comfortable accepting bids in the variable rate reverse repo auction will provide a key signal on its intent and, consequently, the interest rate trajectory.” “

11:30 AM

Signal to ramp up hiring after WhatsApp controversy drives download surge

Messaging app Signal has seen “unprecedented” growth following a controversial change in rival WhatsApp’s privacy terms And is looking to hire more staff as it seeks to bolster the service and supporting infrastructure, the head of its controlling foundation said on Wednesday.

Along with another encrypted app, Telegram, Signal has been the main beneficiary of online outrage around the changes announced last week, which require WhatsApp users to share their data with both Facebook and Instagram.

Telegram said on Wednesday it had surpassed 500 million active users globally.

Brian Acton, who co-founded WhatsApp before selling it to Facebook and then co-founding the Signal Foundation, declined to give equivalent data for Signal but said that the expansion in recent days had been “vertical”.

11:00 AM

Rupee slips 3 paise to 73.07 against US dollar in early trade

The rupee opened on a flat note and depreciated 3 paise to 73.07 against the US dollar in opening trade on Friday tracking the muted opening in domestic equities.

At the interbank forex market, the domestic unit opened at 73.07 against the US dollar, registering a fall of 3 paise over its previous close.

On Thursday, the rupee had settled at 73.04 against the American currency.

“The rupee is sustaining below 73.20 levels indicating a negative momentum may continue in the todays session. Support is at 72.95 – 72.80 levels for the spot pair. Resistance for the pair is 73.20,” said Kshitij Purohit, Product Manager, Currency and Commodities at CapitalVia Global Research.

Traders said most of the Asian currencies are trading weak against the US Dollar as the dovish comments from the US Fed Chief Jerome Powell weighed on the greenback and could keep gains in check.

10:30 AM

Farm bills have potential to represent significant step forward for agriculture reforms in India: IMF

The IMF backs the farm bills.

PTI reports: “The IMF believes the farm bills passed by the Indian government have the potential to represent a significant step forward for agricultural reforms, but a social safety net is needed to protect those who might be adversely impacted during the transition to the new system, a spokesperson of the global lender said here.

Gerry Rice, Director of Communications at the International Monetary Fund (IMF), said the new measures will reduce the role of the middlemen and increase efficiency.

“We believe the farm bills do have the potential to represent a significant step forward for agricultural reforms in India,” Rice said at a news conference in Washington on Thursday.

“The measures will enable farmers to directly contract with sellers, allow farmers to retain a greater share of the surplus by reducing the role of middlemen, increase efficiency and support rural growth,” he said.

“However, it is important that the social safety net adequately protects those who might be adversely affected during the transition to this new system,” the spokesperson said responding to a question on the ongoing protests by farmers against the laws in India.

This can be done by ensuring that the job market accommodates those that are impacted by the reforms, he said.

And of course, the growth benefits of these reforms will depend, critically, on the effectiveness and the timing of their implementation, so need to pay attention to those issues as well with the reform, “Rice said.

Thousands of farmers, mostly from Punjab and Haryana, have been camping at several Delhi border points, demanding a complete repeal of the three farm laws and legal guarantee of minimum support price for their crops.

Enacted in September last year, the three laws have been projected by the center as major reforms in the agriculture sector that will remove middlemen and allow farmers to sell their produce anywhere in the country.

However, the protesting farmers have expressed their apprehension that the new laws would pave the way for eliminating the safety cushion of the Minimum Support Price (MSP) and do away with the “mandi” (wholesale market) system, leaving them at the mercy of big corporates. “

10:00 am

Sensex drops over 200 points in early trade; Nifty below 14,550

A slight correction in stocks.

PTI reports: “Equity benchmark Sensex dropped over 200 points in early trade on Friday tracking losses in index majors Infosys, HDFC Bank and TCS amid weak cues from global markets.

The 30-share BSE index was trading 246.16 points or 0.50 per cent lower at 49,338.

Like, the broader NSE Nifty fell 67.65 points or 0.46 per cent to 14,527.95 in opening deals.

Profit-booking at higher levels is keeping benchmark indices volatile, traders said.

UltraTech Cement was the top loser in the Sensex pack, shedding around 2 per cent, followed by Tech Mahindra, Infosys, Asian Paints, IndusInd Bank, Dr Reddy’s, HCL Tech and TCS.

On the other hand, Bharti Airtel, NTPC, Titan, Nestle India and ONGC were among the gainers.

In the previous session, Sensex ended at its new lifetime high of 49,584.16, up 91.84 points or 0.19 per cent, and Nifty rose 30.75 points or 0.21 per cent to finish at a record 14,595.60.

Foreign portfolio investors (FPIs) were net buyers in the capital market as they purchased shares worth Rs 1,076.62 crore on Thursday, as per exchange data.

According to Binod Modi Head-Strategy at Reliance Securities, domestic equities do not look to be encouraging at the moment.

“While the underlying strength of the market remains intact, it appears to be a bit tiring from the last couple of days and may see some amount of pullback in coming days.

“However, the announcement of higher fiscal stimulus in the US and soft stance of global central bankers about their monetary policies along with a weak dollar will continue to attract FPIs to Indian equities,” he said.

US markets ended with modest correction in the final hour of trade ahead of the announcement of the coronavirus relief plan by President-elect Joe Biden.

Elsewhere in Asia, bourses in Shanghai, Seoul and Tokyo were in the red, while Hong Kong was trading in the positive zone.

Meanwhile, the global oil benchmark Brent crude was trading 0.32 per cent lower at USD 56.24 per barrel. “

9:30 AM

India’s medium-term growth to slow to around 6.5% after initial rebound: Fitch

The Indian economy will suffer lasting damage from the coronavirus crisis and after an initial strong rebound in FY22 (fiscal year ending March 2022) growth will slow to around 6.5% a year over FY23-FY26, Fitch Ratings said on Thursday.

“A combination of supply-side scarring and demand-side constraints – such as the weak state of the financial sector – will keep the level of GDP well below its pre-pandemic path,” it said in commentary on the Indian economy.

Fitch said India’s coronavirus-induced recession has been among the most severe in the world, amid a stringent lockdown and limited direct fiscal support.

The economy is now in a recovery phase that will be further supported by the rollout of vaccines in the next months.

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