The benchmark stock indices opened the day on a negative note, falling from record highs.
Join us as we follow the top business news through the day.
U.S. long-term mortgage rates fall; 30-year at 2.67%
U.S. long-term mortgage rates declined this week to record low levels for the 15th time this year against the backdrop of an economy ravaged by the pandemic.
Mortgage finance giant Freddie Mac said on December 17 that the average rate on the 30-year fixed-rate home loan fell to 2.67% from 2.71% last week. A year ago, the benchmark rate stood at 3.73%.
The average rate on 15-year fixed-rate loans eased to 2.21% from 2.26%.
The housing market continues as a rare bright spot in the stalled U.S. economy, as home-loan rates have trended downward through most of this year.
That has bolstered demand from would-be homebuyers or people looking to refinance existing mortgages.
Fed balance sheet sees huge jump
Rupee opens 5 paise higher at 73.54 against US dollar
The rupee seemed to buck the trend seen in stocks this morning.
PTI reports: “The rupee appreciated 5 paise to 73.54 against the US dollar in opening trade on Friday as the weakness of the American currency and optimism surrounding the US stimulus aid package supported the domestic unit.
Traders said sustained foreign fund inflows also strengthened investor sentiment.
At the interbank forex market, the domestic unit opened at 73.55 against the greenback, then inched higher and touched 73.54, registering a rise of 5 paise over its previous close.
On Thursday, rupee settled flat at 73.59 against US dollar.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading up 0.21 per cent at 90.01.
“The dollar crashed on Thursday as hopes of stimulus and Brexit deal improved risk appetite and weighed on the safe haven appeal of the greenback. The dollar index broke below the 90 mark (for the first time) since January 2018,” Reliance Securities said in a research note.
However, Asian currencies were weak this morning and RBI could be present in the markets and could cap gains for the domestic unit, the note added.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 152.49 points lower at 46,737.85, and the broader NSE Nifty fell 47.45 points and was trading at 13,693.25.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 2,355.25 crore on a net basis on Thursday, according to exchange data.
Brent crude futures, the global oil benchmark, fell 0.33 per cent to USD 51.33 per barrel.”
Retail NPAs will be higher in second half of FY21: Axis Bank
Retail non-performing assets (NPAs) will be higher in the third and fourth quarter of FY21 and will go back to the pre-COVID-19 levels only in the new fiscal year, Axis Bank said on Thursday.
The third-largest private sector lender, however, said that the asset quality situation was much better than what was feared initially, and stressed that it had adequate provisions to take care of the reverses.
It may be noted that the damage to the economy because of the pandemic resulted in job losses or salary cuts, in turn impacting the loan repayment abilities in the otherwise resilient retail segment.
Given the fact that a lot of people lost their jobs, some had to take salary cuts and some industries were badly affected, it will have some impact on delinquency and portfolio collections.
“But these numbers are much lower than what we had anticipated,” head of retail lending Sumit Bali told reporters.
Indian shares fall from record highs as banks drag
A sharp fall in the indices this morning.
Reuters reports: “Indian shares slipped from record highs on Friday, dragged down by banking stocks, as investors locked in gains after indexes scaled fresh peaks in 18 of the past 27 sessions.
The blue-chip NSE Nifty 50 index fell 0.34% to 13,694.20 by 0446 GMT, while the benchmark S&P BSE Sensex was down 0.33% at 46,735.12. However, both indexes are on track for a seventh straight week of gains, a streak not seen since April last year.
“(The markets) have run up one way for quite some time,” said Samrat Dasgupta, chief executive officer at Esquire Capital Investment Advisors in Mumbai. “We will have all dips being bought in.”
As the end of the year nears, global markets have been swinging between broader optimism about COVID-19 vaccines and a global economic recovery and concerns about still rising infections.
However, Indian markets have mostly outperformed other Asian markets this year, boosted by record inflows from foreign institutional investors (FIIs), vaccine progress globally and signs of a nascent economic recovery in the country.
“I don’t see any big correction unless there is some interruption in liquidity. We are seeing average buying of at least 20 billion rupees ($271.96 million) per day from the FIIs,” Dasgupta said.
In Mumbai trading, the Nifty IT index rose 1.6%, while the Nifty Bank Index fell 1.2%. Lender HDFC Bank was the top drag to the Nifty 50, falling 1.8%.
Axis Bank fell 0.8%, after local media reports said that the private-lender expected an increase in retail non-performing loans in the third and fourth quarters of this financial year.
Defence manufacturers and suppliers Hindustan Aeronautics Ltd and Bharat Dynamics rose between 0.2% and 1.2%. India’s defence ministry on Thursday approved proposals to procure equipment worth 270 billion rupees from the domestic industry.”
Coca-Cola laying off 2,200 workers as it pares brands
The Coca-Cola Company has said that it was laying off 2,200 workers, or 17% of its global workforce, as part of a larger restructuring aimed at paring down its business units and brands.
The Atlanta-based company said on Thursday that around half of the layoffs will occur in the U.S., where Coke employs around 10,400 people. Coke employed 86,200 people worldwide at the end of 2019.
The coronavirus pandemic has hammered Coke’s business, as sales at places like stadiums and movie theaters dried up due to lockdowns. Its revenue fell 9% to $8.7 billion in the July-September period.
The downturn forced the company to accelerate a restructuring that was already underway.
“We’ve been challenging legacy ways of doing business and the pandemic helped us realize we could be bolder in our efforts,” Coke Chairman and CEO James Quincey said during an earnings call in October.