Stocks
Nifty, Sensex Make a New All-time High – Thursday closing report
We had mentioned in Thursday’s closing report that Nifty, Sensex were in an uptrend again. The major indices of the Indian stock markets rallied on Thursday and closed with gains over Wednesday’s close. The trends of the major indices are given in the table below:
 
 
The key domestic equity indices -- S&P BSE Sensex and NSE Nifty -- on Thursday scaled record highs on the back of positive global cues and hopes of an easing of the monetary policy. Global equities traded higher after US Federal Reserve Chair Janet Yellen, hinted at more gradual tapering programme at her testimony before the US Congress, pointed out market analysts. India's retail inflation hit a record low of 1.54% in June, lowest since 1999, raising hopes of an interest rate cut by RBI (Reserve Bank of India) ahead of monetary policy next month (in August).
 
Global IT spending is projected to reach $3.5 trillion in 2017 -- a 2.4 per cent increase from 2016, market research firm Gartner said on Thursday. Global spending on devices which include PCs, tablets and mobile phones is projected to grow 3.8% in 2017 to reach $654 billion -- an increase of 1.7% from previous quarter's forecast. The mobile phone growth will be driven by increased average selling prices (ASPs) for premium phones in mature markets due to the 10th anniversary of the iPhone while the tablet market may continue to decline. "Digital business is having a profound effect on the way business is done and how it is supported," said John-David Lovelock, Vice President, Gartner, in a statement. The growth rate is up from the previous quarter's forecast of 1.4 per cent owing to decline of the US dollar against many foreign currencies. According to Gartner, the worldwide enterprise software market is forecast to grow 7.6% in 2017. The S & P BSE Information Technology Index closed at 10,148.28, up 0.23% on the BSE.
 
Reliance Capital Ltd on Thursday said it has received Rs378 crore from Nippon Life Insurance on the completion of increasing its stake to 49% in Reliance Nippon Life Asset Management Ltd (RNAM). In a statement here, Reliance Capital said it will book capital gains on this final transaction during the third quarter ending September 30, 2017. RNAM is the largest asset manager in India in terms of assets under management (AUM), managing Rs3,58,059 crore as of March 31, across mutual funds, pension funds, managed accounts and offshore funds. Nippon Life Insurance is already a strategic partner in RNAM. Nippon Life Insurance acquired 26% stake in RNAM (formerly known as Reliance Capital Asset Management) in 2012. Thereafter, Nippon Life has increased its stake to 49% in various tranches, reflecting the success of the partnership. Nippon Life Insurance is an over 125 years old insurer and a Global Fortune 500 company that manages over $530 billion in assets - amongst the largest total assets in the world for any life insurer. The company is one of the largest life insurers in the world. Reliance Capital shares closed at Rs663.30, up 0.74% on the BSE.
 
After lowering the Immediate Payment Service (IMPS) charges, the State Bank of India (SBI) on Thursday reduced charges for National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) transactions upto 75% effective July 15. The reduced charges will be applicable on the transactions done through internet banking and mobile banking services offered by the bank, the bank said in an official statement here on Thursday. State Bank of India shares closed at Rs288.60, up 0.42% on the BSE.
 
With the retail inflation easing to a record low of 1.54 per cent in June, the government's Chief Economic Adviser Arvind Subramanian on Wednesday said it reflects a paradigm shift in the process to low levels of inflation, which has been missed in the large systematic inflation forecasts made. "This low, heartening number is consistent with our analysis for some time now -- and which will be fully elaborated in the forthcoming Economic Survey -- of a paradigm shift in the inflationary process to low levels of inflation, a shift that I think has been missed by all reflected in the large, one-sided, and systematic inflation forecast errors that have been made," Subramanian told reporters here. As per the Central Statistics Office (CSO) data on Consumer Price Index (CPI), retail inflation was dragged lower to 1.54 per cent in June due to a sharp fall in the prices of food items like pulses, vegetables, and other perishables. The current inflation rate is the lowest since the series began in 2012. With low inflation, interest rates are likely to soften, giving a boost to business and stock markets in India.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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DeMo Effect: Digital India leapfrogs 3 years in just 7 months
Owing to demonetisation and initiatives to promote card transactions on point of sales (PoS) terminals, card and digital transactions have increased stupendously post November 2016. After analysing data for PoS sales and digital transactions, it appears that demonetisation has brought India at least three years ahead in digital payments, says a research note.
 
In the report, State Bank of India (SBI) says, "If demonetisation had not happened, it would have taken three years more for credit plus debit cards transactions on PoS terminals to reach the current level of Rs70,000 crore, assuming a yearly growth rate of 25%. Post demonetisation, Indian banks have been able to set up 11.8 lakh extra PoS terminals. We believe that increasing number of PoS terminals and ease of doing digital transaction will increase this level further."
 
According to the report, similar trends are observed in case of usage of pre-paid instruments, including m-Wallet, PPI cards, and paper vouchers and mobile banking too. Prepaid payment instruments (PPIs) witnessed a sharp growth, with transactions worth Rs10,700 crore in May 2017, compared to Rs5,100 crore in November 2016.  
 
Seven months after demonetisation, the transaction value is quite large and approximately double of what it had been in the corresponding month and period last year, the report says.
 
SBI feels that such digitisation will result in lower inflation. SBI estimated a simple regression model by taking headline consumer price index (CPI) inflation as dependent variable and credit plus debit cards transactions on PoS terminals in rupees billion (DCPoS) as independent variable. 
 
 
"The estimated model was statistically significant and the results indicate an increase in Rs 100 billion transaction by credit plus debit cards at PoS terminals will lead to around 1.1% decline in CPI inflation, ceteris paribus. This augurs well for a lower inflation regime going forward. We also believe that combined with a structural change in food inflation regime that we are witnessing
India is well poised for a favourable growth inflation mix in the coming years!" SBI added.

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COMMENTS

SRINIVAS SHENOY

2 weeks ago

I feel if proper payment security measures are in place, the volume of card transactions will significantly improve in the days to come.

Beena Kothari

2 weeks ago

Its a good sign. I favour digital transactions in most of the cases. But it cant be undertaken just by learning to do it. One must be educated about how to handle those products without hurting themselves due to ignorance.

Paytm acquires majority stake in ticketing platform Insider.in
E-wallet platform Paytm on Thursday announced it has acquired a majority stake in Insider.in, a ticketing platform of events company OML Entertainment, for an undisclosed sum.
 
Paytm has been expanding into the events ticketing industry that is currently pegged at Rs 4,000 crore, with online ticketing accounting for 10 per cent of the overall volume.
 
"Digital discovery and events marketing expertise will increase supply of quality events in India. This is a natural extension for us as we continue to build India's go-to destination for online movies and events," said Madhur Deora, Chief Financial Officer, Paytm, in a statement.
 
Insider.in provides tools, data and analytics to organisers that enables them to conceptualise, market and execute their events. 
 
"Our partnership with Paytm will enable us to reach more organisers and event goers, and exponentially grow this ecosystem in India," added Shreyas Srinivasan, CEO Insider.in.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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