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QBiz: Union Budget to Be Announced Today; Economic Survey Out

Your daily round-up of the latest business news on QBiz.

Updated
Business
5 min read
File image of Union Finance Minister Nirmala Sitharaman and PM Modi. Growth rate for 2018-19 has been revised downwards significantly. 
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1. Revival in Sight: Economic Survey Pegs FY21 GDP Growth at 6-6.5%

The 2019-20 Economic Survey on Friday forecast real gross domestic product (GDP) growth at 6-6.5 percent for the fiscal year 2020-21 (FY21), saying growth has been rebounding from the second half of FY20, and will continue to be on the uptick in the coming year.

The Survey said the Centre will have to relax the fiscal deficit target for FY20.

“Going forward, considering the urgent priority of the government to revive growth in the economy, the fiscal deficit target may have to be relaxed for the current year,” said the Survey, tabled in Parliament a day before Finance Minister Nirmala Sitharaman presents the 2020-21 Union Budget.

(Source: Business Standard)

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2. GDP Growth Rate for FY19 Revised Downwards to 6.1% From 6.8% Estimated Earlier

The government on Friday revised downwards the economic growth rate for 2018-19 to 6.1 percent from 6.8 percent estimated earlier mainly due to deceleration in mining, manufacturing and farm sectors.

"Real GDP or GDP at constant (2011-12) prices for the years 2018-19 and 2017-18 stand at Rs 139.81 lakh crore and Rs 131.75 lakh crore, respectively, showing growth of 6.1 percent during 2018-19 and 7.0 percent during 2017-18," the National Statistical Office said in revised national account data released on Friday.

Under the first revision released in January 2019, real GDP or GDP at constant (2011-12) prices for 2017-18 was pegged at Rs 131.80 lakh crore, showing a growth of 7.2 percent.

(Source: Mint)

3. Britain Quits the European Union, Steps Into Transition Twilight Zone

The UK leaves the European Union (EU) on Friday for an uncertain Brexit future, the most significant change to its place in the world since the loss of empire and a blow to 70 years of efforts to forge European unity from the ruins of war.

The country will slip away an hour before midnight from the club it joined in 1973, moving into the no man’s land of a transition period that preserves membership in all but name until the end of this year.

At a stroke, the EU will be deprived of 15 percent of its economy, its biggest military spender and the world’s international financial capital of London. The divorce will shape the fate of the UK—and determine its wealth—for generations to come.

(Source: Mint)

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4. Q3 Results: Essar Steel Resolution Helps SBI Post Its Best Quarterly Profit Ever

State Bank of India (SBI), the country’s largest lender, reported its highest quarterly profit on Friday as it wrote back provisions on bad loans owing to recovery of Rs 11,000 crore from the resolution of bankrupt Essar Steel.

Net profit rose 41 percent to Rs 5,583 crore in the December quarter from Rs 3,954 crore in the year earlier. That compares with the Rs 5,871.6 crore estimated by 13 analysts in a Bloomberg poll.

Net interest income, the difference between interest earned and expended, stood at rs 27,778.79 crore in the three months ended December, an increase of 22.4 percent from the year-ago period and its other income increased 13.3 percent to Rs 9,106 crore. Net interest margin, a key measure of profitability, widened by 37 basis points sequentially to 3.59 percent.

(Source: Mint)

5. Wall Street Falls on Virus Concerns; Amazon Soars Owing to Jump in Holiday Sales

The S&P 500 and the Dow Jones Industrial Average slid on Friday, hit by worries over the impact of the coronavirus epidemic on global growth, while strong earnings from Amazon.com checked losses on the Nasdaq.

Shares of the online retailer surged 9.2 percent after the company trumped Wall Street's estimates for holiday-quarter results, putting it back in the $1 trillion market capitalization club.

Gains in Amazon helped the consumer discretionary index rise 2.2 percent, while most other major indexes were in the red, with energy stocks tumbling 2.4 percent.

Wall Street indexes are on course to end the week on a poor note as virus fears continue to grip financial markets, although corporate earnings have been largely positive so far.

(Source: Mint)

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6. ITC Q3 Net Profit Jumps 29% to Rs 4,142 Crore, Beats Street Estimates

ITC Ltd, India’s largest cigarette maker, on Friday reported a 29.07 percent jump in its December quarter stand-alone profit, beating Street estimates. Net profit rose to Rs 4,141.93 crore in the three months ended 31 December, up from Rs 3,209 crore a year earlier, the company said in a filing to the stock exchanges on Friday evening.

Revenue from operations at the maker of Bingo chips, and Gold Flake cigarettes for the quarter grew 5 percent from the year-ago period to touch Rs 12,013.01 crore, according to a statement made by the company to the stock exchange.

(Source: Mint)

7. India Markets See Worst January in Four Years Ahead of Union Budget

The benchmark index fell on Friday, capping its worst January since 2016 as the government grapples with measures to spur the slowing economy.

The Sensex fell 0.5 per cent to 40,723.49 at the close of trade, resulting in a monthly loss of 1.3 percent, its worst such performance since July and start to the year since 2016. The NSE’s Nifty, too, declined 0.6 percent.

Local markets will remain open on Saturday, enabling investors to trade as Finance Minister Nirmala Sitharaman outlines the country’s annual Budget as the government seeks to revive demand.

(Source: Business Standard)

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8. Foreign Investors Pare Holdings of Rs 6000 Crore Ahead of Budget

Foreign portfolio investors (FPIs), key drivers of the bourses, have lightened their holdings ahead of the Budget to be presented on Saturday. In the previous five sessions, they had liquidated shares worth nearly Rs 6,000 crore. A large part of the sell-off can be attributed to the outbreak of the Coronavirus.

Market players say the possibility of savvy investors taking money off the table ahead of the Budget cannot be ruled out.

On Friday, FPIs sold shares worth Rs 4,179 crore, the highest single-day selloff in more than two years.

The India VIX, a barometer for market volatility, shot up 12 percent during the week. This signals that the markets could see huge gyrations following the Budget.

(Source: Business Standard)

9. ITI Extends FPO Closing for the Second Time on Shortfall in Demand

ITI extended the closing of its follow-on public offer (FPO) for a second time, on Friday, on account of a shortfall in demand.

The state-owned telecom technology firm cited the banking strike for the extension.

“We wish to inform you that there is an ongoing banking strike in the country and as per the Regulation 142(3) of the 2018 SEBI ICDR Regulations, which states that in case of any force majeure, banking strike or similar circumstance, the issuer may extend the issue period for a minimum of three working days. In accordance with Regulation 142(3) and keeping in mind the circumstances, the FPO Committee has decided to extend the issue period by four working days,”it said in an exchange filing.

(Source: Business Standard)

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