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Evening wrap:

The worsening gobal energy crisis could boost oil demand by half a million barrels per day (bpd), the International Energy Agency. This could push inflation up and slow the world’s recovery from the COVID-19 pandemic, the agency noted.

In other developments, China’s factory-gate inflation rose to a record on soaring commodity prices. The country’s producer price index (PPI) rose 10.7{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} from a year earlier in September, the National Bureau of Statistics (NBS) said on Thursday, the biggest rise since the bureau started compiling the data in 1996. – John Xavier 

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4:45 P.M.

Rupee closes at 75.26 against US dollar

The rupee appreciated 11 paise to close at 75.26 (provisional) against the US dollar, posting gains for a second straight day. 

The domestic unit rose on heavy buying in domestic equities and weakness in the greenback strengthened investor sentiment while surging crude prices in the international market restricted the rupee’s gain. 

The local unit opened strong at 75.27 against the greenback, before closing at 75.26 against the American currency, a rise of 11 paise over its previous close.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, dipped 0.28{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} to 93.81.

4:30 P.M.

China’s coal prices near record high

 China coal prices held near record high after cold-weather prompted power plants to stock up on fuel to ease an energy crunch.

China has been grappling with a widening power crisis due to a shortage of coal, record-high fuel prices and booming post-pandemic demand.  

Soaring energy prices sent producer prices to their highest in at least 25 years in September, rising 10.7{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} from a year earlier, and cold winter weather is likely to worsen the situation.

Beijing has ramped up efforts to contain coal price rises. Some of it includes raising domestic coal output, rationing of power at factories and assuring energy supplies will be secured for the winter heating season.

4:00 P.M.

Sensex soars to a new high

Equity benchmark Sensex rallied 569 points to close at a new high amid positive macro cues and upbeat global markets. The sense rose 0.94{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} to close above 61,000 for the first time at 61,305.95.

The Nifty also surged 0.97{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} to a new lifetime closing high of 18,338.55.

ITC was the top gainer in the Sensex pack, followed by HDFC Bank, and PowerGrid while TCS, HCL Tech, and Bajaj Finance were among the laggards.

The Indian market stayed in green due to the upbeat global market and favourable inflation data. 

The wholesale price-based inflation eased to 10.66{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} in September, and retail inflation in September too slowed to a five-month low of 4.4{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} on moderating food prices.

In Asia, Seoul and Tokyo ended with strong gains, while Shanghai was in the red. Stock exchanges in Europe were trading on a positive note in mid-session deals.

3:30 P.M.

Passenger vehicle sales drop  

Passenger vehicle wholesales in India fell 41{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} year-on-year in September as the semiconductor shortage hit production of automobiles.

Passenger vehicle sales last month stood at 1,60,070 units compared with 2,72,027 units in the same month a year ago. 

According to the Society of Indian Automobile Manufacturers (SIAM), two-wheeler dispatches to dealers plunged 17{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} to 15,28,472 units, compared to 18,49,546 in September 2020.

While demand for automobiles is picking up, the semiconductor chip shortage has been a major concern for the industry. During the festive season when sales usually peak, customers have to wait for a long time on popular models of some segments. 

3:00 P.M.

Energy crisis could threaten global economic recovery: IEA

The global energy crunch could boost oil demand by half a million barrels per day (bpd), fuelling inflation and slowing the world’s recovery from the COVID-19 pandemic, the International Energy Agency (IEA) said. 

Oil and natural gas prices have skyrocketed to multi-year highs recently, leading to record power prices across the world. 

“Record coal and gas prices as well as rolling blackouts are prompting the power sector and energy-intensive industries to turn to oil to keep the lights on and operations humming,” the IEA said in its monthly oil report.

Due to an increased demand for oil,  global oil demand next year is now projected to recover to pre-pandemic levels. 

2:15 P.M.

Govt approves proposals for telecom PLI scheme

The Department of Telecom approved 31 proposals of companies including Nokia India, HFCL, and Foxconn requiring an investment of  ₹3,345 crores over the next four and a half years.

The other firms selected for the PLI scheme are HFCL, Flextronics, Coral Telecom, VVDN Technologies, Akashastha Technologies, and GS India.

With the scheme for telecom gear manufacturing, the government aims to encourage the production of equipment worth ₹2.44 lakh crore and create direct and indirect employment for about 40,000 people.

1:30 P.M.

Oracle opens Israel cloud centre to withstand rocket attacks

Oracle opened a public cloud centre in Israel to let firms and Israeli people store their data on local servers rather than relying on other countries. 

The underground data centre, which is the first of two planned public cloud centres in the country is built below one of Jerusalem’s technology parks. 

The nine floors centre, estimated to have cost hundreds of millions of dollars, is designed to work even during the potential terror.  The company claims it can withstand a rocket direct, a missile direct hit or even a car bomb.

1:00 P.M.

WPI inflation eases to 10.66{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} in September

The wholesale price-based inflation eased to 10.66{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} in September on moderating food prices despite a rise in prices of crude petroleum. It stood at 11.38{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} in August.

Inflation in food articles eased for the fifth straight month, recording 4.69{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} in September from 1.29{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} in August, primarily on low vegetable prices. Pulses prices continued to spike at 9.42{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809}.

Retail inflation in September eased to a five-month low of 4.35{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} on moderating food prices.

12:30 P.M.

EU rules will raise cybercrime risks: Apple 

Apple said EU’s draft rules that will allow users to install software from outside its App Store would boost cybersecurity risk.

On the contrary, the Coalition for App Fairness, which includes Spotify, Match Group and Epic Games, argued that built-in security measures such as encrypted data and antivirus programmes provide security to devices, and not its App Store. 

The group wants regulators to loosen Apple’s grip on its App Store so they can bypass it to reach Apple’s hundreds of millions of users and also to avoid paying commissions of up to 30{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} for purchases made in the Store.

11:30 A.M.

Rupee rises against US dollar

The Indian rupee rose 12 paise to 75.25 against the US dollar in opening trade on heavy buying in domestic equities and fresh foreign fund inflows. 

At the interbank foreign exchange, the domestic unit opened strong at 75.27 against the US dollar before gaining further to 75.25, a 12 paise rise against the previous close.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.03{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} to 94.05.

10:45 A.M.

U.S. Federal Reserve to reduce bond purchases

According to the minutes of the September 21-22 Fed meeting, the U.S. central bank would scale back its bond-buying programme, and conclude its $120 billion asset purchases by the middle of next year. 

Policymakers discussed cutting the Fed’s purchases of Treasuries by $10 billion a month and those of mortgage-backed securities by $5 billion a month. However several participants preferred a faster reduction.

If a decision to begin tapering is agreed upon in the Fed’s next policy meeting scheduled at  November 2-3,  the process could begin by the middle of that month or mid-December.

10:00 A.M.

Infosys, Wipro announce Q2 results

Infosys reported a 12{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} rise in its second-quarter net profit on growth across verticals and geographies, strong revenue contribution from the Daimler deal, and higher adoption of digital transformation.

The net profit of India’s second-largest IT service company stood at ₹5,421 crore as compared with ₹4,845 crore in the same quarter a year ago.

Infosys also raised its annual revenue outlook due to an increased demand for its software services from global businesses. 

Wipro posted a 17{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} jump in consolidated net profit for the quarter ended September 30. The net profit rose to ₹2,930.6 crore as compared with ₹2,484.4 crore in the same period a year ago.

Consolidated revenue of Wipro increased by about 30{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} to ₹9,667.4 crore during the quarter compared to ₹15,114.5 crore it registered in the corresponding quarter of 2020-21.

Wipro said it is in position to hire 25,000 people in the next financial year and is also resuming work back from office in a staggered manner starting with fully vaccinated senior colleagues in India.

9:30 A.M.

Asian markets open | Sensex update

India’s benchmark equity indices opened at fresh record high. At 9:17 IST, the benchmark index rose 388.11 points to 61125.16 and the Nifty surged 117.70 points or 0.65{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} to 18279.50.

Most Asian markets rose as investors anticipated that inflation will push rate hikes around the world.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} while Japan’s Nikkei surged 1{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809}. Overnight on Wall Street the S&P 500 rose 0.3{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809} and in early Asia trade S&P 500 futures were also up 0.3{cfdf3f5372635aeb15fd3e2aecc7cb5d7150695e02bd72e0a44f1581164ad809}.

The minutes from last month’s Federal Reserve meeting showed policymakers’ growing concern about inflation and a general agreement to start tapering asset purchases soon.

Morning note:

Investment activity in India rebounded in the September ending quarter, but growth was not spread across all sectors or states. Gujarat secured the highest amount of fresh investment commitments among the top 5 states, which included Maharashtra, Telangana, Karnataka and Odisha. Manufacturing led the pack among industries, and irrigation and infrastructure lagged.

Coal crisis hit the country’s Aluminium sector as the industry demanded immediate resumption of supplies from Coal India for its survival.

In other developments, the U.S. Federal Reserve released minutes of its September 21-22 meeting, which revealed the Fed plans to scale back its bond buying programme next month. In China, the Evergrande crisis sapped investors appetite for Chinese dollar bond. – John Xavier

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—-  Edited by John Xavier

 

(With inputs from Reuters, PTI and other news agencies.)