Economic News Live – The Hindu
The next contagion might as well be inflation. It is evident from the shortage of coal and soaring oil prices. Together, the two products could drive up the cost of goods. Stocks fell and government bond yields rose globally as oil hit a multi-year high. India’s benchmarks fell and the national currency depreciated against the US dollar. The prices of LPG, gasoline and diesel have increased in the country.
In China, the fallout from Evergrande is rippling through neighboring Hong Kong as two major real estate developers sued the Chinese real estate giant. – Jean-Xavier
To learn more about our top stories in economics, business and finance, please read our blog below.
Market closure | Sensex, Nifty slide on inflation issues
The Sensex and Nifty stock indexes fell at the close of the market as stocks gave up on gains and investor sentiment around the world deteriorated amid rising gas prices and inflation.
The S&P BSE Sensex lost 0.93% to 59,189.73, while the NSE Nifty 50 Index ended down 0.99% to 17,646. The Nifty’s Energy Index hit a record earlier in the day, but ended down 0.45%.
Meanwhile, the rupee fell 54 paise to close at 74.98 against the US dollar. Gold dipped 226 yen to 45,618 yen per 10 grams, in line with falling international precious metal prices.
Evergrande crisis | Investors demand protection against riskier bonds
Global investors are likely to demand more protection against riskier bond issuers in China and Asia due to Evergrande’s financial difficulties. They may seek higher yields and demand greater transparency from these debt instruments.
Top fund managers believe a mix of debt issues and changing regulations in China is shifting the target post for foreign investors. In addition, the large losses in Chinese junk bonds reflect both the risk of default and the uncertainty about the valuation of bonds in the country.
Zee Entertainment moves appeals tribunal
Zee Entertainment has formed an appeals tribunal against a court ruling asking it to file responses by Thursday in a case filed by two institutional investors.
The company has been going through a turbulent period since founder Subhash Chandra sold his 50% stake in the company in 2019. Subsequently, the company has faced other challenges, including the Essel Group ties. with a company under investigation for fraud of 3,000 crore.
More recently, Sony Pictures bought Zee Entertainment Enterprises, saving the ailing company.
Energy crisis | EU calls for relief funds
The European Union urged member countries to provide relief funds to customers and small businesses that have been affected by rising gas and electricity prices. The 27-member bloc has been criticized for its policies to tackle climate change, which is fueling the energy crisis.
The block imports about 90% of its natural gas needs, compared to the United States, which produces its at lower prices. Recently, the EU’s energy chief said his countries have enough gas in stock to get through the winter, but soaring prices show the need to quickly switch to renewables and reform the gas market. of the EU.
Solar power generation in India slows
Solar power generation in India slowed in September at a time when coal-fired utilities are scarce. Growth in solar power is crucial this year, as half of the countries’ coal-fired power plants have fuel stocks of less than three days. In addition, Coal India, which accounts for 80% of the country’s coal production, has seen its production grow at the slowest rate in six months.
Despite RBI Concerns, Crypto Investments Rise
Even though India’s central bank expresses concerns about cryptocurrencies due to their volatility and lack of transparency, private crypto platforms continue to raise millions of dollars. Crypto platform CoinSwitch Kuber said it had raised $ 260 million, becoming the second crypto exchange to achieve unicorn status after rival CoinDCX. The platform is valued at $ 1.9 billion after the funding round. The company has raised funds from Andreessen Horowitz, Coinbase Ventures, Paradigm, Ribbit Capital, Sequoia Capital India and Tiger Global.
According to Chainalysis, the Indian cryptocurrency market grew to $ 6.6 billion in May 2021, up from $ 923 million in April 2020.
Asian markets fall on inflation, default problems
Asian and European markets fell amid lingering concerns over rising inflation and tightening monetary policy. The Tokyo stock index fell for the eighth session, while those of Hong Kong, Seoul, Mumbai and Bangkok were also in the red.
The indexes have seen equity rebounds for over a year, but recently hit a hurdle as supply chain issues and soaring energy prices caused by rebounding demand drove upward. sustained inflation.
Oil reaches a high for several years
Following OPEC + ‘s refusal to step up production, oil hit a multi-year high at $ 83 per barrel. Brent crude hit $ 83.47, the highest since October of 2018, while U.S. crude climbed to $ 79.78, the highest since November 2014.
The price of Brent has jumped more than 50% this year, adding to inflationary pressure that could slow the recovery from the COVID-19 pandemic.
Welcome to the live, Sowmya! The energy crisis seems to dominate Asian markets today. Its impact is visible on the domestic prices of LPG and fuel. As you will see from our updates, the Evergrande contagion continues to affect real estate developers. I am logging out now and returning the blog to you to keep our readers informed. – Ishan
Thanks Ishan! I’ll get it from here! – Sowmya
Evergrande crisis | Hong Kong developers sue
Chinese group Evergrande’s woes continue as two major Hong Kong real estate developers sue the Chinese company for unpaid commissions. The lawsuit puts more pressure on the real estate developer who is already burdened with more than $ 300 billion in debt.
Centaline and Midland Holdings, two of Hong Kong’s largest real estate developers, sued Evergrande. Centaline claims to recover HK $ 3.1 million ($ 398,196) in overdue commissions, and Midland Holdings is claiming an unpaid commission of HK $ 43.45 million for two projects.
The price of LPG increases
Rising crude oil prices are impacting the price of domestic gas in India. The cost of an LPG cylinder has been increased from 15 to 899.50 (in Delhi and Mumbai). This increase is the fourth increase in just two months. The price has increased by 205 yen since the start of the year. Gasoline and diesel prices also increased, by 30 paise and 35 paise, respectively, per liter. In Delhi, the price of gasoline is now 102.94 yen per liter while diesel is priced at 91.42 yen per liter.
The fall of the rupee against the US dollar continues; Oil is rising
The Indian rupee continues to tumble against the US dollar. Domestic unit opened weakly at 74.65 against the greenback. The strength of the US dollar in world markets weighs on the Indian currency. In addition, following Monday’s OPEC + meeting, crude oil prices are on the rise, negatively impacting the rupee.
Driven by energy supply issues and the decision from Monday’s OPEC + meeting, oil prices continued to rise today, with U.S. oil prices climbing for a fifth day to their highest level since 2014. WTI has jumped 0.24% to $ 79.11 a barrel. Brent crude rose 0.3% to $ 82.80 a barrel, after hitting a three-year high in the previous session.
Samsung Quarterly Profit
Samsung’s profit in the last quarter of September is expected to be the highest since 2018, driven by higher memory chip prices and smartphone sales, analysts said.
The South Korean company’s operating profit could rise 30 percent to 16.1 trillion won ($ 14 billion) in the third quarter, according to a Refinitiv SmartEstimate of 16 analysts.
The world’s largest smartphone maker is also expected to post record revenue in the quarter.
The enigma of the aviation industry
The recovery of the aviation industry may be delayed due to confusion over different travel restrictions set by different countries.
“People want to fly. We’ve seen strong evidence of that, ”said Willie Walsh, IATA CEO. “They can’t fly because we have restrictions that hinder international travel. “
Asian stocks fall; Indian indices open up
Today, the main Asian stock indexes opened in the green but plunged early in the session, after a rebound on Wall Street. The Japanese Nikkei opened at 28,033.91, up 211.79 points. Nikkei was down around 1% at the start of trading.
South Korea’s Kospi opened at 2,986.06 points, up 23.89 points. Hong Kong’s Hang Seng opened at 24,259.20, up 155.05 points.
Mainland Chinese markets will be closed until Thursday for the holidays.
Indian indices opened higher today amid mixed global indices. BSE Sensex opened at 59,942.00, up 197.12 points, after gaining more than 400 points in the previous session. Likewise, NSE Nifty opened at 17,861.50, up 39.2 points.
Moody’s is raising its outlook for India from negative to stable. The agency notes that the country’s downside risk is fading. Our blog will follow the energy situation in India as the country faces a coal crisis that could last the rest of the year. We will also be monitoring the Evergrande contagion, among other major developments. The Chinese real estate giant is reportedly studying the possibility of a sale of a stake. She has a debt of over $ 300 billion.
The aviation sector is also on our radar as restrictions related to the pandemic loosen and people start to travel. Emirates signed a five-year, $ 750 million loan last night with Dubai’s biggest lender. Earlier today, we heard the CEO of global airlines body IATA say the industry could significantly cut losses to $ 52 this year from $ 138 billion in 2020. The industry could turn profitable again. ‘next year. – Jean-Xavier
—- Edited by John Xavier
(With contributions from Reuters, PTI, and other news agencies.)