>> RIL seeks new legacy for old warhorse, hives off O2C biz
>> Oil price rise set to hurt large swathes of India Inc
>> Pay hikes coming, but more PF outgo may dent take-home
>> Fed’s Powell says markets to get enough warnings before tapering
Hi there. Welcome to ETMarkets Morning, the show about money, business and markets. I am Sandeep Singh.
Let’s start with a quick glance on the state of the markets.
Dalal Street looked set to eke out little gains today. Nifty futures on Singapore Exchange traded some 75 points higher early this morning. Other Asian markets mostly traded weak. Wall Street had a mixed show overnight. In currencies, the US dollar fell against its major peers, with the British pound hitting the highest mark since April 2018. Bitcoin nursed losses at $49,700 after a two-day selloff. Crude oil also extended losses. Gold prices gained marginally in international markets.
That said, here’s what else is making news?
US Fed Chair Jerome Powell told Congress on Tuesday the US economy remained “a long way” from employment and inflation goals and that interest rates would stay low and bond buying would proceed apace until there was “substantial further progress”. He did not sound too worried about the selloff in bonds, and said it was a statement on the market’s confidence in the pandemic recovery. Powell said markets would get plenty of warning about any future policy adjustments.
The statement failed to lift sentiments in the equity markets though. At best, it may have slowed down the selloff.
Reliance Industries is seeking a new legacy for the old warhorse. The conglomerate has unveiled plans to transfer its oil-to-chemicals operations to a wholly owned subsidiary. The transfer, which includes the operating team and 12 manufacturing facilities, will be funded by a $25 billion loan and $12 billion equity from the parent, according to the company. The interest-bearing loan will be an “efficient mechanism to upstream cash, including any potential capital receipts in the unit”, the company said. The company has filed the proposal with the NCLT and expects approvals by the second quarter of FY22. The recast is effective January 1, 2021.
Will is give new legs to the RIL stocks? Wait and watch
GAIL has been thrown out of Nifty and Tata Consumer Products will take its place with effect from March 31, making it the fifth Tata stock on the 50-pack elite group. Meanwhile, Adani Enterprises, Apollo Hospitals, GAIL, Jubilant FoodWorks, MRF, Vedanta and Yes Bank have got included in the Nifty Next50 index replacing Bank of Baroda, Container Corporation of India, General Insurance Corporation, Hindustan Zinc, Oracle, PFC and Tata Consumer Products.
Salary increments across India Inc are likely to take a U-shaped recovery path this year, with projected average increments of 7.7% for 2021 and 8.6% for the next year. But the pay hikes may not translate into higher cash-in-hand for employees if organisations choose to pay more towards PF contributions due to the new definition of wages proposed by the government. 88% of companies said they intend to increase pay in 2021, up from 75% last year, the Aon Salary Increase Survey showed.
Rising crude oil prices are going to hurt bottom lines for India Inc. Paints, plastics, packaging materials, cement consumer, oil marketing firms and chemicals are most likely to be impacted by the higher crude oil prices, while oil exploration companies such as ONGC and Oil India will be beneficiaries. Analysts said shares of several richly-valued companies from the affected sectors now face the risk of underperformance. Leading brokerages such as Morgan Stanley and Goldman Sachs expect crude oil prices to touch $70-75 a barrel this year driven by lower expected inventories and higher marginal costs.
We will be tracking this story keenly as it unfolds…
NOW Before I go, here is a look at some of the stocks buzzing this morning…
Wipro is learnt to have won a contract from US cosmetics maker Estee Lauder worth $500 million, making it a significant deal under CEO Thierry Delaporte.
Sun Pharma Advanced Research on Tuesday said the USFDA has ruled against its appeal related to Taclantis, its under development product for treatment of breast cancer.
United Spirits (USL) on Tuesday said it is set to start a strategic review of several of its mass-priced brands, excluding McDowell’s and Director’s Special trademarks.
Canadian billionaire Prem Watsa-backed CSB Bank is targeting a 30% growth on its Rs 13,000 crore loan book.
Do also check out over two dozen stock recommendations for today’s trade from top analysts on ETMarkets.com.
That’s it for now. Stay put with us for all the market news through the day. Happy investing!