The benchmark stock indices have gained further ground today, continuing their rally over the last few days.
The oil market is showing continued strength as demand revives with the gradual easing of the global lockdown.
Join us as we follow the top business news through the day.
Divergence in the stock market
A main theme this year is growing divergence - whether between high & low-income families or stronger & weaker companies. In stocks, this translates as a 16% gain for Apple, Amazon Facebook, Microsoft & Alphabet vs a 12% loss on an equal-weighted version of the S&P: @TheOneDave pic.twitter.com/s7QgC6QBNI— Lisa Abramowicz (@lisaabramowicz1) June 2, 2020
Sensex jumps 284 points; Nifty tops 10,000-mark
The benchmark stock indices that opened strongly in the morning witnessed a heavy sell-off during the closing hours of the day's trading session.
PTI reports: "Extending its winning streak to the sixth session, equity benchmark Sensex surged 284 points on Wednesday, led by gains in HDFC twins, ICICI Bank and Kotak Mahindra Bank amid positive cues from global markets.
After hitting a peak of 34,488.69, the 30-share index ended 284.01 points or 0.84 per cent higher at 34,109.54.
Similarly, the NSE Nifty jumped 82.45 points or 0.83 per cent to 10,061.55.
M&M was the top gainer in the Sensex pack, rising around 5 per cent, followed by Kotak Bank, Bajaj Finance, Nestle India, SBI, ICICI Bank, HDFC Bank and ONGC.
On the other hand, NTPC, IndusInd Bank, Bharti Airtel and Maruti were among the laggards.
The bulls maintained their grip on the market as stocks surged led by massive foreign fund inflows and positive global cues, analysts said.
On a net basis, foreign portfolio investors bought equities worth Rs 7,498.29 crore on Tuesday, provisional exchange data showed.
Further, gradual reopening of economies the world over has fuelled bullish trend in global markets, they said."
MSMEs to be classified based on new criteria from July
Details of the government's new classification scheme for businesses.
PTI reports: "From July, over six crore micro, small and medium enterprises across the country will be classified on the basis of the new criteria approved by the government.
As per the revised criteria, a unit with Rs 50 crore of investment and Rs 250 crore of turnover will fall under the medium enterprise category.
Besides, a manufacturing and services unit with Rs 1 crore of investment and Rs 5 crore of turnover will be classified as micro whereas a unit involving Rs 10 crore of investment and Rs 50 crore of turnover will be categorised as a small enterprise.
Also, a new composite formula of classification for manufacturing and services units has been notified. Now, there will be no difference between the manufacturing and service sectors.
Ministry officials said that the new definition will pave way for strengthening and growth of MSMEs. Particularly, the provision of excluding the exports from counting of turnover will encourage the MSMEs to export more and more without fearing to lose the benefits of a MSME unit.
This is expected to exponentially add to exports from the country leading to more growth and economic activity and creation of jobs, an official statement said.
The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi cleared the upward revision of the definition of micro, small and medium enterprises (MSMEs) on Monday."
Amazon to expand packaging-free shipping to 100 cities
Amazon India on Wednesday said it was expanding its Packaging-Free Shipping (PFS) initiative to over a 100 cities in the country. According to Amazon, PFS is aimed at minimising packaging waste across its supply chain, with customer orders being shipped in their original packaging without any additional boxes or covers.
Amazon had first introduced PFS in India in June 2019 in less them 10 cities, it said in a statement.
Amazon said that with this expansion of PFS, more than 40% of customer orders shipped from Amazon Indias Fulfillment Centers would be packaging-free or have significantly reduced packaging. With PFS, multiple customer orders will be carried in re-usable tote bags during deliveries.
Rupee settles 11 paise lower at 75.47 against US dollar
The bull run in the rupee came to an end with the currency witnessing a fall during the day.
PTI reports: "The rupee surrendered all intra-day gains to provisionally settle 11 paise lower at 75.47 against the US dollar on Wednesday, even as domestic equities were trading in positive territory.
Forex traders said positive domestic equities, sustained foreign fund flows, revival of business activities and weak US dollar supported the local unit, but there are still a slew of risks, including US-China trade tiff and concerns that it may jeopardise the Phase-1 deal.
At the interbank forex market, the rupee opened strong at 75.04, but pared the gains and finally closed at 75.47 against the US dollar, down 11 paise over its last close.
It had settled at 75.36 against the US dollar on Tuesday.
During the session, the local unit witnessed an intra-day high of 75.04 and a low of 75.52.
Meanwhile, the dollar index, which gauges the greenbacks strength against a basket of six currencies, fell by 0.23 per cent to 97.44.
Now investors have started focusing on the prospect that economies are re-opening all over the world from the pandemic. Thus, the risk sentiment has turned positive and the dollar index is subdued amongst major emerging market currencies, said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services.
Gupta further said that despite strong inflows into equity, USD/INR spot was unable to break the crucial support of 75, and it reversed towards 75.40. The immediate resistance lies around 75.60."
Facebook, Saregama announce global licensing deal
Saregama on Wednesday said it has entered into a global deal with Facebook to license its music for video and other social experiences across products offered by the social media giant.
With the move, Facebook and Instagram users will be able to add music to their posts and stories from Indias oldest music label. Saregama has a catalogue of over 1,00,000 songs across different genres including film songs, devotional music, ghazals and indipop in more than 25 languages.
This partnership will allow users to choose from a wide variety of music to add to their social experiences such as videos, stories via music stickers and other creative content. People will also be able to add songs to their Facebook Profile, Saregama said in a statement.
China drives global oil demand recovery out of coronavirus collapse
China, which was the first to end its lockdown, is leading the revival of demand in the oil market.
Reuters reports: "China's oil demand has recovered to more than 90% of the levels seen before the coronavirus pandemic struck early this year, a surprisingly robust rebound that could be mirrored elsewhere in the third quarter as more countries emerge from lockdowns.
While China - the world's second-largest oil consumer - is the outlier for now, easing travel restrictions and stimulus packages aimed at resuscitating economies could accelerate global oil demand in the second half of 2020, industry executives said.
The brisk resumption of Chinese oil demand, 90% of pre-COVID levels by the end of April and moving higher, is a welcome signpost for the global economy, said Jim Burkhard, vice president and head of oil markets at IHS Markit.
When you consider that oil demand in China the first country impacted by the virus had fallen by more than 40% in February the degree to which it is snapping back offers reason for some optimism about economic and demand recovery trends in other markets such as Europe and North America, said Burkhard.
Benchmark oil prices have also bounced back as lockdown measures eased, with Brent futures rallying 50% and U.S. crude futures over 90% since May 1.
While oil analysts agree that China's demand is rebounding, estimates differ in terms of degree and duration."
Oil gains, with Brent above $40, as hopes rise for output cuts, recovery
The rally in the oil market continues as supply tightens and demand rises with the easing of the global lockdown.
Reuters reports: "Oil rose on Wednesday, with Brent above $40 for the first time since March, as optimism mounted that major producers will extend output cuts and a recovery from the coronavirus pandemic will spur fuel demand.
Brent crude futures for August were up 78 cents, or 2%, at $40.35 a barrel, by 0636 GMT. The contract climbed to as high as $40.53, the highest since March 6, after gaining 3.3% on Tuesday.
U.S. West Texas Intermediate (WTI) crude futures gained $1.06, or 2.9%, at $37.87 a barrel. It rose to as much as $38.18, also the highest since March 6. The contract ended the previous session up 3.9%.
Both benchmarks have risen sharply in recent weeks from the lows of April, buoyed by a continuing recovery in China, the epicentre of the virus outbreak, while other economies are slowly opening up after lockdowns to contain its spread.
The Organization of the Petroleum Exporting Countries (OPEC) and other major producers including Russia, a group known as OPEC+, may extend production cuts of 9.7 million barrels per day (bpd), or about 10% of global output, into July or August, sources told Reuters.
The cuts are currently due to run through June, scaling back to a reduction of 7.7 million bpd from July to December, but Saudi Arabia has been pushing to keep the deeper cuts in place for longer."
Brent crude oil rises above $40 a barrel for the first time in almost three months as the OPEC+ alliance weighs extending its deep output cuts (Brent is now above both the 50- and 100-day moving averages) | #OOTT More on @TheTerminal pic.twitter.com/EZ5ExXvsSC— Javier Blas (@JavierBlas) June 3, 2020
Zoom Video's revenue, profit skyrocket amid coronavirus pandemic
U.S.-head-quartered teleconferencing solution provider Zoom Videos revenue for the February-April 2020 quarter sprinted 169% to USD 328.2 million, driven by demand for its services amid work from home and physical distancing measures due to COVID-19 outbreak.
The companys profit sky-rocketed to USD 27.0 million compared to USD 0.2 million in the year-ago quarter.
The NASDAQ-listed firm also nearly doubled its revenue guidance for the full year 2021 to between USD 1.775 billion and USD 1.800 billion. In March this year, the company had forecast revenues to be in the range of USD 905.0 million and USD 915.0 million for the full year.
PSBs disburse Rs 3,893-crore loans to MSMEs under Emergency Credit Line Guarantee Scheme
Data on loans disbursed under the government's credit-based stimulus package for the economy.
PTI reports: "The Finance Ministry on Wednesday said that public sector banks (PSBs) have disbursed Rs 3,892.78 crore in the first two days of the month under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector hit hard by the coronavirus-induced lockdown.
Meanwhile, PSBs have sanctioned loans worth Rs 10,361.75 crore under the 100 per cent ECLGS starting June 1.
The scheme is the biggest fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman last month.
Public sector banks have already sanctioned loans worth Rs 10,361.75 crore under the 100 per cent Emergency Credit Line Guarantee Scheme. Out of this, Rs 3,892.78 crore has already been disbursed, Finance Minister Nirmala Sitharaman said in a tweet
On May 21, the cabinet had approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through ECLGS for the MSME sector.
Under the scheme, 100 per cent guarantee coverage will be provided by National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers, in the form of a guaranteed emergency credit line (GECL) facility.
For this purpose, a corpus of Rs 41,600 crore was provided by the government spread over the current and the next three financial years."