Business Live: Shares hit record highs as govt set to roll out vaccines; services sector loses more steam in Dec, job cuts resume


The Nifty and the Sensex opened the day on a  positive note, scaling further highs as the vaccine against coronavirus is all set to be rolled out.

Join us as we follow the top business news through the day.

11:30 AM

OPEC+ approves slight crude output increases

Members of the oil cartel OPEC and their partners agreed Tuesday to raise output slightly in February and March, but only in Russia and Kazakhstan.

Overall the amount of crude oil the group has voluntarily withdrawn from global markets is to decline from 7.2 million barrels per day to 7.125 mbd in February, and 7.05 mbd in March, the OPEC+ group said in a statement issued at the end of its first ministerial meeting of the year.

It called at the same time for caution on the part of those active in the sector owing to the coronavirus pandemic.

To ensure the market is not flooded with oil while pandemic-related risks to demand remain high, OPEC kingpin Saudi Arabia decided to cut its own production by one million barrels per day in both months, Energy Minister Prince Abdulaziz bin Salman told a press conference.

 

11:00 AM

Danes are getting free 20-year mortgages

 

10:30 AM

India’s services sector loses more steam in Dec, job cuts resume

Economic greenshoots could be under threat.

Reuters reports: “Growth in India’s dominant services industry continued to lose momentum in December as a resurgence in coronavirus infections weighed on new business and employment, a private survey showed on Wednesday.

Asia’s third-largest economy has been gradually recovering from a coronavirus-induced recession but is not expected to return to pre-pandemic levels soon, especially within the service industry – the engine of economic growth and jobs in the country.

The Nikkei/IHS Markit Services Purchasing Managers’ Index fell to 52.3 in December from November’s 53.7 but held above the 50-mark separating growth from contraction for a third straight month.

“A spike in COVID-19 cases was reported as a key factor restricting growth of new work intakes among service providers, which in turn curbed the rise in output and led to increased business uncertainty about the outlook,” Pollyanna De Lima, economics associate director at IHS Markit, said in a release.

“It is clear that the early part of 2021 will continue to be challenging and we’re looking at a sustainable recovery and some return to normality once COVID-19 vaccines become available.”

India has the second-highest number of coronavirus infections in the world. On Sunday it approved two coronavirus vaccines for emergency use but it could take years to vaccinate over 1.3 billion people with its rudimentary healthcare system.

Although a sub-index monitoring overall demand ended a rough 2020 in growth territory, it declined to a three-month low as night curfews in some major cities depressed demand.

Demand from abroad remained firmly in contraction territory as many countries reimposed lockdown measures to contain a fresh spike in COVID-19 cases.

Weak demand forced firms to lower their prices despite an uptick in input costs, which increased at the quickest pace since February.

Meanwhile, job market conditions darkened, slipping back into contraction, although the pace of job shedding remained minimal.

“Given the damaging impact of the pandemic on the service economy, some companies are facing financial difficulties, which is preventing staff hiring. December saw the ninth round of job shedding in ten months,” De Lima added.

Optimism about the next 12 months faded at the end of the year as firms were concerned about the uncertainty surrounding the pandemic, the rupee’s depreciation and rising inflationary pressures, the survey showed.

Despite a pick-up in factory activity, sluggish demand for services meant the India composite PMI fell to a three-month low of 54.9.”

10:00 AM

Shares hit record highs as govt set to roll out vaccines

The bull run continues in the stock market.

Reuters reports: “Indian shares inched higher to record levels on Wednesday, extending a months-long rally driven by foreign fund flows, while the country gets ready to roll out a COVID-19 vaccination programme by next week.

The blue-chip NSE Nifty 50 index rose 0.24% to 14,234.00 and the benchmark S&P BSE Sensex climbed 0.19% to 48,528.69 by 0352 GMT.

Both indexes have now hit record highs in all trading sessions of the new year, helped by continued foreign fund inflows and progress on COVID-19 vaccines.

Foreign investors pumped more than $20 billion into Indian equities last year, according to Refinitiv Eikon data.

On Tuesday, India’s top health official said the country was set to roll out a COVID-19 vaccination programme by next week, aiming to cover 300 million people by July.

In Mumbai trading, HDFC Bank rose 0.4% and was among the top boosts to the Nifty 50, after the country’s largest private-sector lender reported higher advances and deposits as of Dec. 31, 2020.

Titan Company rose 2.5% after reporting strong results in its jewellery and watches and wearables divisions for the third quarter.

Broader global markets fell as investors prepared for a possible Democrat triumph in Senate runoffs in the U.S. battleground state of Georgia.”

9:30 AM

Global and India output set to expand in 2021-2022, says World Bank

Global economic output is projected to grow by 4% in 2021 assuming widespread roll-out of a COVID-19 vaccine throughout the year, as per the World Bank’s Global Economic Prospects (GEP) report released on Tuesday. This projection is still 5% below pre-pandemic levels. India is expected to grow at 5.4% in fiscal year 2021/22 and 5.2% in fiscal 2022/23 after an expected contraction of 9.6% in fiscal 2020/21.

India’s expected contraction in the current fiscal year is due to a sharp decline in household spending and private investment. There was severe income loss in the informal sector which accounts for 4/5ths of employment, as per the GEP report. However, recent data indicate that recovery in manufacturing and services is gaining momentum. In 2021, the rebound from the low base is expected to be countered by subdued private investment growth due to financial sector weakness, the report says.

The global recovery has been dampened by the resurgence of the coronavirus but is expected to strengthen as confidence, trade and consumption start improving, supported by vaccinations. After an estimated 3.6% contraction in 2020, U.S. GDP is expected to grow at 3.5% in 2021 and the Euro area at 3.6%.

 

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