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Category: Financial News

  • ONGC, Oil India gain 3% in tandem with crude oil prices

    Shares of state-owned oil exploration & production companies like Oil and Natural Gas Corporation (ONGC) and Oil India gained 3 per cent on the BSE in Wednesday’s intra-day trade in an otherwise subdued market after oil prices surged. Crude oil prices increased around 6 per cent on Tuesday amid reports of lower supply by oil producers and easing of lockdown curbs in parts of China.

    At 10:47 AM, ONGC and Oil India were up 3 per cent at Rs 173.85 and Rs 237.20, respectively, on the back of heavy volumes. In comparison, the S&P BSE Sensex was up 0.04 per cent at 58,597 points. Upstream companies like ONGC and Oil India are expected to witness strong earnings on higher oil prices. Oil prices saw a sharp increase amid concern over supply disruption due to the geopolitical conflict in Europe in the quarter that ended March 2022 (Q4FY22). Brent prices have averaged nearly $100/bbl in Q4FY22 with nearly $30/bbl being added during the quarter end due to the Ukraine war.

    Analysts at HDFC Securities expect Brent crude price to remain elevated as Organisation of the Petroleum Exporting Countries (OPEC) supply growth is likely to lag behind global demand due to ongoing geopolitical tensions.

    “The average Brent crude price in FY22 stood at USD 80/bbl, up 79 per cent YoY, driven by recovery in global demand with opening up of economies. However, the OPEC supply is lagging behind demand growth due to Russian invasion of Ukraine. Despite the fact that no restrictions were imposed on crude oil import from Russia currently, some off-takers have shunned Russian oil due to uncertainties around insurance, shipping, etc. because of sanctions,” the brokerage firm added.

    The US Energy Information Administration (EIA) also estimates that the growth in global crude oil supply will suffer in 2022.

  • Rupee gains 14 paise to 75.79 against US dollar in early trade

    Rupee gains 14 paise

    The rupee appreciated 14 paise to 75.79 against the US dollar in opening trade on Monday, amid a pullback in crude oil prices.

    At the interbank foreign exchange, the rupee opened at 75.94 against the American dollar, then gained further ground to quote 75.79, registering a rise of 14 paise from the last close.

    On Friday, the rupee appreciated 10 paise to settle at 75.93 against the US dollar.

    The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.13 per cent higher at 99.92.

    Most Asian and emerging market peers are trading weaker against the US dollar this Monday morning and could weigh on sentiments, however subdued crude oil prices will cap depreciation bias, said Sriram Iyer, Senior Research Analyst at Reliance Securities.

    However, the big trigger for the markets will be Indian and US CPI inflation data on Tuesday, Iyer said.

    On the domestic equity market front, the 30-share Sensex was trading 322.35 points or 0.54 per cent lower at 59,124.83, while the broader NSE Nifty declined 73.70 points or 0.41 per cent to 17,710.65.

    Global oil benchmark Brent crude futures fell 2.33 per cent to USD 100.39 per barrel.

    Foreign institutional investors were net sellers in the capital market on Friday, as they offloaded shares worth Rs 575.04 crore, as per stock exchange data.

  • Lankan papers run out of newsprint due to forex crisis; suspend publication

    Sri Lanka’s two major newspapers on Saturday suspended their publication over newsprint shortage and price escalation caused by the country’s all-time worst foreign exchange crisis.

    The Island, an English daily along with its sister Sinhala paper Divayina, ceased to print as the newsprint scarcities and price escalations hit the media organisation.

    We regret to inform our readers that we have been compelled to suspend the publication of The Island print edition on Saturday until further notice in view of the newsprint shortage, Upali Newspapers Limited said in a statement.

    Sri Lanka is facing its all-time worst foreign exchange crisis after the pandemic hit the nation’s earnings from tourism and remittances.

    The import costs of newsprint also rose remarkably since e government’s decision early this month to float the Sri Lankan rupee against the US dollar.

    The Island newspaper, which has been in print since October 1981, will now function as an e-paper.

    Sri Lanka is facing an acute economic and energy crisis triggered due to a shortage of foreign exchange. A sudden rise in prices of key commodities and fuel shortage forced tens of thousands of people to queue for hours outside petrol filling stations. People are also facing long hours of power cuts daily.

    All essentials are in short supply due o import restrictions forced by the forex crisis.

    As part of its measures to tackle the crisis, the Sri Lankan government has sought India’s assistance. After months of resistance, the government is preparing to approach the International Monetary Fund (IMF) for an economic bailout.

    In a related development, the Indian Oil Corporation’s local entity LIOC effected another price hike of petrol with effect from midnight Friday. This was the LIOC’s fourth price hike since February.

    India recently announced to extend a USD 1 billion line of credit to Sri Lanka as part of its financial assistance to help the country deal with the economic crisis. New Delhi had extended a USD 500 million line of credit to Colombo in February to help it purchase petroleum products.

  • Sri Lanka’s forex crisis leads to a tourism crisis

    With Sri Lanka going through an ongoing foreign exchange criss, governments of the United Kingdom, and Canada have warned their travellers about the economic situation. The UK government has warned its travellers that Sri Lanka is reeling under a crisis with shortages of medicines, food, and fuel, as there is now a shortage of hard currency for imports.
    The country declared that it’s in crisis back in August, 2021. With the 2019 Easter Bombings, and then the covid pandemic, tourism has already been hit in a bad way in the country. Now the foreign exchange crisis might further affect travel.

    The United Kingdom, along with Russia and India are the three biggest sources of inbound tourism for Sri Lanka. Tourism accounts for 5 per cent of the country’s GDP. There has been a decline in international tourist arrivals in Sri Lanka in March 2020, by about 70.8 percent when comared to the same time frame a year ago.

    The government in Canada has also asked its citizens to have food, water, and fuel supplies in hand in case of a disruption. The government has also asked its travellers to have enough supply of medicines at hand.

    The Sri Lankan public has in fact faced a shortage of essentials due to the forex crisis, as its import restrictions have led to a shortage in cooking gas, and fuel supplies. This has also led to power cuts in the country.

  • Rupee advances 23 paise to 75.67 against the US dollar in early trade

    The rupee advanced 23 paise to 75.67 against the US dollar in the opening trade on Thursday, supported by positive domestic equities and a fall in crude oil prices.

    At the interbank foreign exchange, the rupee opened at 75.67 against the US dollar, registering a rise of 23 paise from the previous close.

    On Wednesday, the rupee dropped by 17 paise to close at 75.90 against the US dollar.

    The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.14 per cent to 97.92.

    Global oil benchmark Brent crude futures fell 4.54 per cent to USD 108.30 per barrel after reports surfaced that US President Joe Biden is preparing to order the release of up to 1 million barrels of oil per day from the nation’s strategic petroleum reserve to control energy prices.

    Meanwhile, the International Monetary Fund on Wednesday said that India has received a record number of foreign direct investments during the last few years despite the COVID-19 crisis, and has quite a few safeguards in place to mitigate the risks from capital flows.

    On the domestic equity market front, the 30-share Sensex was trading 152.24 points or 0.26 per cent higher at 58,836.23, while the broader NSE Nifty surged 44.40 points, or 0.25 per cent, to 17,542.65.

    Foreign institutional investors remained net buyers in the capital market on Wednesday as they purchased shares worth Rs 1,357.47 crore, according to stock exchange data.

  • Rupee advances 23 paise to 75.93 against US dollar in early trade

    The rupee appreciated 23 paise to 75.93 against the US dollar in the opening trade on Tuesday, following a positive trend in domestic equities amid softening global crude oil prices.

    A weak American currency in the overseas market also helped the domestic unit, forex traders said.

    At the interbank foreign exchange, the rupee opened strong at 75.97 against the US dollar and gained further ground to quote at 75.93, a rise of 23 paise over the previous close.

    In the previous session, the rupee had settled at 76.16 against the greenback.

    Global oil benchmark Brent crude futures declined 1.53 per cent to USD 110.76 per barrel.

    Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, slipped 0.06 per cent to 98.99.

    On the domestic equity market front, the 30-share Sensex was trading 233 points or 0.40 per cent higher at 57,826.49, while the broader NSE Nifty surged 75.85 points, or 0.44 per cent, to 17,297.85.

    Foreign institutional investors remained net sellers in the capital market on Friday as they sold shares worth Rs 801.41 crore, according to stock exchange data.

    According to the latest public debt management report, the government’s total liabilities rose to Rs 128.41 lakh crore in the December quarter from Rs 125.71 lakh crore in the three months ended September 2021.

    The increase reflects a quarter-on-quarter increase of 2.15 per cent in October-December 2021-22.

    The report released by the finance ministry on Monday said public debt accounted for 91.60 per cent of the total outstanding liabilities in the December quarter compared to 91.15 per cent at the end of September.

  • Rupee sinks to record low with stocks as Ukraine crisis boosts oil

    The Indian rupee tumbled to a record low along with stocks and bonds as a spike in oil prices spurred by the war in Ukraine threatened to inflate the nation’s oil-import bill and fan inflationary pressures.

    The rupee declined as much as 1% to 76.9625 per dollar, past its previous low of 76.9088. Benchmark government bond yields rose six basis poaints to 6.87%, while the S&P BSE SENSEX Index fell as much as 3.3% to 52,542.64, the lowest since July.

    Today’s move has turned the rupee into Asia’s worst performer this year as surging crude prices fueled worries about the country’s balance of payments. India imports nearly three-fourth of its oil, making it one of the most vulnerable in Asia to higher prices.

    India’s benchmark equity index dropped to its lowest level in more than seven months with most of the 30 stocks of the S&P BSE Sensex trading in the red.

    “Geopolitical risks will likely stay elevated, especially on the terms of trade shock and current-account deficit implications,” Barclays Plc. analysts including Ashish Agrawal wrote in a note. “The INR is more sensitive to supply side oil shocks,” he said, adding that the Reserve Bank of India “is likely to continue selling USD passively, but is unlikely to defend any particular level.”

    Foreign funds have taken out about $16 billion from India’s equity markets since September. The initial share sale of Life Insurance Corp., widely referred to as India’s Aramco moment, is also increasingly likely to be deferred given the volatile geopolitical conditions.

  • Union Bank of India raises Rs 1,500 cr through Basel-III compliant bonds

    Union Bank has raised Rs 1,500 crore by issuing Basel III compliant bonds to investors.

    The bank has allotted unsecured, subordinated, non-convertible, taxable, perpetual, fully paid-up Basel III compliant additional tier-I bonds in the nature of debentures, aggregating to Rs 1,500 crore.

    The bonds are eligible for inclusion in the tier-I capital of the bank.

    To comply with Basel-III capital regulations, banks globally need to improve and strengthen their capital planning processes.

    These norms are being implemented to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks.

    Tier-I capital is the core capital of a bank’s reserves and it is primarily used to fund business activities. Banks are required to hold certain levels of tier 1 and tier 2 capital as reserves so that they can absorb large losses without threatening their stability.

    Shares of Union Bank of India closed at Rs 41 apiece on BSE, up 1.99 per cent from the previous close.

  • Indices end strong after bleak opening session; Tata Steel rises over 6%

    Benchmark Bombay Stock Exchange (BSE) Sensex recovered after a weak opening, as the 30-share barometer plunged more than 1,025 points to the day’s low of 54,833.50, before staging a recovery to close 388.76 pts or 0.70 per cent higher at 56,247.28, marking its second session of gains.

    On similar lines, the broader National Stock Exchange (NSE) Nifty climbed 135.50 points or 0.81 points to settle at 16,793.90. The Indian indices mirrored a rebound in Asian equities, even as the Ukraine crisis continued to roil western markets.

    Tata Steel emerged as the lead gainer among Sensex scrips, jumping by 6.61 per cent, followed by Power Grid, Reliance Industries, Titan, NTPC, L&T, Asian Paints and ICICI Bank.

    On the other hand, Dr Reddy’s, M&M, Axis Bank, HDFC twins and Kotak Bank were among the major laggards, shedding up to 2.81 per cent.

  • Rupee crashes 40 paise to 75.73 against US dollar in early trade

    The rupee tumbled 40 paise to 75.33 in early trade on Monday, tracking surge in crude prices amid escalating tensions between Russia and Ukraine.

    At the interbank forex market, the local currency opened sharply lower against the dollar. It was moving in a tight range of 75.78 and 75.70. In early deals, it was trading at 75.73, registering a fall of 40 paise over its previous close.

    In the previous session, the rupee had gained 27 paise to settle at 75.33 against the US dollar.

    The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.78 percent higher at 97.37.

    Global oil benchmark Brent crude futures surged 4.24 percent to USD 102.08 per barrel.

    Meanwhile, in a dramatic escalation of tensions in eastern Europe, Russian President Vladimir Putin ordered his nuclear forces to be on high alert in response to what he called “aggressive statements” by leading NATO powers over the Ukraine conflict.

    On the domestic equity market front, the 30-share Sensex was trading 709.15 points or 1.27 percent lower at 55,149.37, while the broader NSE Nifty fell 198.15 points or 1.19 percent to 16,460.25.

    Foreign institutional investors were net sellers in the capital market on Friday, as they offloaded shares worth Rs 4,470.70 crore, as per stock exchange data.