Financial News Archives

December 3, 2024

GST Rate Revision Proposed for 148 Items: Higher Tax on Tobacco and Aerated Water

The Group of Ministers (GoM) on Rate Rationalisation has reportedly recommended changes to the GST structure for various goods and services. Sources indicate the introduction of a new 35% GST rate for specific items, including tobacco products and aerated beverages, up from the current 28%.

Proposed GST Changes

The GoM has suggested GST Rate Revision for 148 items. Key changes include:

Category	Current GST Rate	Proposed GST Rate
Tobacco products	28%	35%
Aerated water	28%	35%
Watches (above ₹25,000)	18%	28%
Shoes (above ₹15,000)	18%	28%
Packaged water	18%	5%
Notebooks	12%	5%

Impact on Apparel

Changes to GST rates for readymade garments have also been proposed:

5% GST on garments priced up to ₹1,500.
18% GST on garments priced between ₹1,500 and ₹10,000.
28% GST on garments priced above ₹10,000.

Focus on Luxury and Everyday Items

The recommendations include higher taxes on luxury items such as leather bags, cosmetics, and high-end watches. Conversely, essential items like notebooks and packaged water may see reduced rates to provide relief to consumers.

The proposed revisions aim to rationalize the tax structure and balance the fiscal burden across various segments. Final decisions are expected after review and approval by the GST Council.

December 2, 2024

Adani Green Energy Stock increases 9%: Factors Behind 50% Gains in 4 Sessions

Adani Green Energy’s stock price climbed by 9% during early trading on Monday, extending its rally over the past few sessions. The stock has soared nearly 50% in just four trading days, reflecting strong investor confidence.

Stock Performance
On Monday, Adani Green Energy shares opened at ₹1,364 on the BSE, up around 3% from the previous close of ₹1,324.55. The stock continued its upward momentum, hitting an intraday high of ₹1,445, registering a 9% increase. This rally builds on the stock’s rise from ₹897 on November 26, 2024, marking an impressive 50% gain over four sessions.

Key Drivers Behind the Rally

Clarification on Legal Allegations
The company recently addressed allegations of bribery involving its chairman Gautam Adani and other officials. In a statement to stock exchanges, Adani Green Energy clarified that neither Gautam Adani, Sagar Adani, nor Vineet Jain was charged with violations of the U.S. Foreign Corrupt Practices Act (FCPA) in the cases filed by the U.S. Department of Justice (DOJ) or the Securities and Exchange Commission (SEC).

The company acknowledged that its directors face charges related to alleged securities fraud, wire fraud conspiracy, and securities fraud conspiracy. However, the clarification appears to have eased investor concerns.
Support from Key Investors
Major investors have reaffirmed their confidence in Adani Group stocks. Following CQG Partners, Abu Dhabi’s International Holding Company (IHC), the investment arm of the ruling family, has expressed continued faith in the group, bolstering market sentiment.
Stable Ratings Amid Challenges
Rating agencies have maintained a cautious yet steady outlook. Fitch Ratings reaffirmed Adani Green Energy’s Long-Term Foreign-Currency Issuer Default Rating at “BBB-” while placing it on Rating Watch Negative. This stability has helped reassure investors amid ongoing scrutiny.

The recent developments, combined with institutional backing and resilient ratings, have fueled optimism around Adani Green Energy, driving significant gains in a short period. However, investors are advised to stay updated on further developments and market conditions.

November 25, 2024November 25, 2024

Nifty 50 Surges Over 400 Points, Sensex Reclaims 80K: Experts Highlight Top Stock Picks

Nifty 50 Surges Over 400 Points, Sensex Reclaims 80K: Experts Highlight Top Stock Picks

Building on the momentum from Friday’s rebound, the Indian stock market started the week strong, with significant gains in early trading. The Nifty 50 index opened higher at 24,253, quickly climbing to an intraday high of 24,330, marking a 423-point rally from its previous close of 23,907.

Similarly, the BSE Sensex opened at 80,193 and peaked at 80,452 in the morning session, recording a jump of 1,355 points. The Nifty Bank index also saw robust gains, opening at 52,046 and reaching an intraday high of 52,232, reflecting an impressive 1,100-point surge.

Factors Driving the Rally

Political Stability After Maharashtra Election Results
The decisive victory of the BJP-led alliance in Maharashtra’s elections played a crucial role in boosting investor sentiment. According to Palka Arora Chopra, Director at Master Capital Services, the win is expected to bring political stability and strengthen pro-business policies, positively influencing sectors such as infrastructure, urban development, and manufacturing.

“The continuity of policy direction, particularly in infrastructure development, is likely to attract further investments. This could lead to significant activity in the construction and real estate sectors,” Chopra added.

Reliance’s Strong Performance Amid Geopolitical Tensions
Reliance Industries, a heavyweight in the Sensex, gained around 2.5% during early trade. Mahesh M. Ojha, AVP at Hensex Securities, attributed this to rising crude oil prices driven by escalating geopolitical tensions. The company is poised to benefit from increased margins on existing stockpiles, along with continued growth in its retail and telecom businesses.

“Reliance looks strong for both short-term and long-term investors, given the positive trends in its core and diversified operations,” Ojha noted.

Sectoral Outlook

The election results have shifted investor focus from defensive sectors like FMCG and pharma to more aggressive plays in railways, infrastructure, and banking.

Avinash Gorakshkar, Head of Research at Profitmart Securities, observed that government initiatives in infrastructure and railways could drive demand in these sectors. Additionally, increased credit demand from infrastructure projects is likely to benefit banking stocks.

“The alignment of policies between the central and Maharashtra state governments ensures a conducive environment for growth in these sectors,” Gorakshkar stated.

As the market gains momentum, experts suggest keeping an eye on infrastructure, banking, and energy sectors for potential opportunities.

November 11, 2024November 18, 2024

Mutual fund monthly SIP inflow crosses Rs 25,000 crore mark for first time

SIP inflow crosses Rs 25k crore in October 2024, a notable increase from ₹24,509 crore in September. This is the first time SIP inflows have exceeded the ₹25,000 crore mark.

The number of new SIP registrations also saw significant growth, with 63.7 lakh new accounts in October, up from 58.7 lakh in September.

As a result, the total number of SIP accounts rose to 10.12 crore, reflecting a 2.5% increase from 9.87 crore in the previous month.

The total Assets Under Management (AUM) from SIPs reached ₹13.30 lakh crore in October, marking a 2.3% rise from ₹13.01 lakh crore in September. This growth comes amid a broader trend of rising equity inflows, with the mutual fund industry recording its 44th consecutive month of positive inflows.

The retail folios have now crossed 17.23 crore, with the total AUM standing at ₹67.26 lakh crore.

Anish Mehta, National Head of Sales, Marketing & Digital Business at Kotak Mahindra Asset Management, noted that investors are increasingly favoring large-cap funds, particularly in the current market environment. He observed, “Investors are recognizing the stability of large-cap funds, and there’s also a shift toward multi-cap and flexi-cap funds for a more balanced risk approach.”

Venkat Chalasani, CEO of AMFI, commented on the broader trend, saying, “October 2024 marks the 44th consecutive month of positive equity inflows, continuing since March 2021. This sustained momentum in SIPs and AUM is a testament to the growing maturity of Indian investors, who are focusing on long-term wealth creation through mutual funds.

November 8, 2024November 18, 2024

Indian Hotels profit up by 232% for Q2, reaching ₹554 crore, with revenue rising by 27%.

Indian Hotels profit up by 232% to shareholders, reaching ₹554.6 crore for the quarter ending in September 2024. In the same quarter of the previous fiscal year, IHCL had reported a net profit of ₹167 crore, according to the company’s exchange filing.

Operating revenue grew by 27.4%, rising to ₹1,826 crore compared to ₹1,433 crore in the prior year’s period. Total income for the current quarter reached ₹1,890.2 crore. Expenses for the company also saw an increase, climbing to ₹1,502 crore from ₹1,248.68 crore a year earlier.

In Q2 results Indian Hotels profit up by 232%, The company’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) stood at ₹501.27 crore, up 41.3% from ₹354.78 crore in the year-ago quarter. On the NSE, shares of IHCL closed at ₹688.30 per share, marking a slight rise of 0.53%.

November 4, 2024November 25, 2024

India’s Factory Growth Speeds Up in October, PMI Reveals

India’s manufacturing sector gained momentum in October after three months of slowdown, driven by a notable improvement in demand. This uptick has positively influenced job creation and bolstered business confidence, as highlighted in a recent survey.

According to the HSBC final India Manufacturing Purchasing Managers’ Index (PMI) by S&P Global, the index rose to 57.5 in October from 56.5 in September, which had marked an eight-month low. This figure also surpassed an initial estimate of 57.4. “India’s manufacturing PMI surged significantly in October, reflecting broadly improving operating conditions,” stated Pranjul Bhandari, HSBC’s chief India economist.

“New orders and international sales growth indicate strong demand for India’s manufacturing sector,” Bhandari added.

Both output and new orders hit a three-month peak, signaling heightened demand, with international demand recovering from a previous low in September. Rising demand for Indian goods saw orders from regions like Asia, Europe, Latin America, and the U.S., boosting the outlook for the coming year.

“Business optimism is high, driven by expectations of sustained consumer demand, upcoming product launches, and pending sales approvals,” Bhandari further noted.

With demand surging, companies ramped up hiring, marking the eighth consecutive month of employment growth. This trend may ease pressure on the government, which faces challenges in creating well-paid jobs for new workforce entrants. However, economists project moderate job creation over the next year, as per a recent Reuters survey.

Inflationary pressures rose, with input and output prices climbing. Input costs hit a three-month high due to increased material expenses, wage demands, and transportation fees, leading firms to pass these costs to clients more quickly than in September.

India’s inflation reached 5.49% in September, nearing the RBI’s 2-6% target range and primarily driven by rising food prices. Despite this, a recent Reuters survey indicated that a slim majority of economists expect the RBI to cut interest rates in December from the current 6.50% to 6.25%.

November 4, 2024November 25, 2024

Wiping Out Rs 8 Lakh Crore in Investor Wealth: Reasons Behind the Drop

On Monday, Indian benchmark equity indices fell significantly, impacted by declines in banking, financial, and IT stocks, as investors remained cautious ahead of the U.S. presidential election and the potential for further interest rate cuts by the Federal Reserve.

The BSE Sensex dropped by 1,409 points (1.77%) to 78,316, while the Nifty50 fell by 454 points (1.87%) to 23,850 around 10:58 am. The total market cap of all companies listed on the BSE saw a reduction of Rs 8.44 lakh crore, bringing it to Rs 439.66 lakh crore.

Top losers on the Sensex included Reliance Industries, Infosys, ICICI Bank, HDFC Bank, and Sun Pharma, which together contributed to a 420-point drop. Other major players like L&T, Axis Bank, TCS, and Tata Motors also added to the decline. Sector-wise, indices for Nifty Bank, Auto, Financial Services, IT, Pharma, Metal, Realty, Consumer Durables, and Oil & Gas recorded losses between 0.5% and 1.7%. Meanwhile, the India VIX, a measure of market volatility, rose by 5.2%, reaching 16.73.

Key Factors Behind the Market Decline

Caution Ahead of the U.S. Election
Investor sentiment in India was affected by the uncertainty of the upcoming U.S. presidential election on November 5, with a close race between Democratic Vice President Kamala Harris and Republican former President Donald Trump.
Anticipation of Fed Meeting Results
Investors are also cautious about the U.S. Federal Reserve’s policy meeting on November 7, where a quarter-point rate cut is expected. While this may encourage foreign investments in India, investors await the Fed’s stance, adding to market caution.
Weak Q2 Corporate Earnings
Disappointing Q2 results from Indian companies have further weighed on the market, with foreign investors offloading Indian stocks.“The Indian market faces challenges from slowing earnings growth, with Nifty’s estimated EPS growth for FY25 likely dropping below 10%. At current valuations of around 24 times FY25 earnings, sustaining a rally may be difficult,” said Vijayakumar.
Increase in Oil Prices
Oil prices surged over $1 early Monday following OPEC+’s decision to delay a planned output increase by one month. Brent futures rose by $1.18 to $74.28 per barrel, while WTI crude increased by $1.20 to $70.69 per barrel.

Category: Financial News

Mutual fund monthly SIP inflow crosses Rs 25,000 crore mark for first time

Indian Hotels profit up by 232% for Q2, reaching ₹554 crore, with revenue rising by 27%.

India’s Factory Growth Speeds Up in October, PMI Reveals

Wiping Out Rs 8 Lakh Crore in Investor Wealth: Reasons Behind the Drop

Key Factors Behind the Market Decline

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