The benchmark stock indices have opened the day on a positive note once again, marking what could probably turn out to be the eighth straight day of gains.The return of normalcy in economic activity is helped fuel demand mount a strong recovery in September.Join us as we follow the top business news through the day.1:00 PMRelief on loans up to ₹2 crore addresses borrowers’ distress, RBI tells Supreme Court The Reserve Bank of India (RBI) has told the Supreme Court that the Centre’s resolve to shoulder the cost of ‘interest on interest’ for MSME loans and personal loans up to ₹2 crore addresses pandemic-induced financial distress among borrowers.The RBI termed it additional relief. The central bank reasoned that a complete waiver, on the other hand, of compound interest (interest on interest) chargeable during the six-month moratorium would destabilise “broader financial stability” and irreparably dent the banks.“A long moratorium exceeding six months can also impact credit behaviour of borrowers and increase the risks of delinquencies post resumption of scheduled payments. It may result in vitiating the overall credit discipline, which will have a debilitating impact on the process of credit creation in the economy. It will be the small borrowers who may end up bearing the brunt of the impact, as their access to formal lending channels is critically dependent on the credit culture,” the RBI told the Supreme Court in an affidavit filed late on October 9.
12:30 PMVedanta plummets over 24% after delisting failsThings didn’t go as planned for Vedanta.PTI reports: “Shares of Vedanta on Monday plummeted over 24 per cent after the company’s delisting went from almost-a-success to failure on account of a large quantity of unconfirmed orders.The stock tanked 23 per cent to Rs 94 on BSE. On NSE, it tumbled 24.37 per cent to Rs 92.15.In a regulatory filing, Vedanta said its buyback offer is deemed to have failed as per the terms of the delisting regulations after promoter Vedanta Resources did not receive the required number of shares to delist the firm.A large number of unconfirmed bids and some technical glitches in the tender process are likely to have contributed to the failure.The BSE on October 9 evening showed 137.74 crore shares, out of a total 169.73 crore shares held by the public, to have been offered for sale to promoters, larger than the threshold of 134.12 crore.Some bids, however, were pending confirmation from custodians.Reconciliation of data led to the number of shares offered for sale being trimmed to 125.47 crore.This, Vedanta said, was “less than the minimum number of offshore shares required to be accepted by the acquirers in order for the delisting offer to be successful.”“Accordingly, the acquirers will not acquire any equity shares tendered by the public shareholders in the delisting offer and the equity shares of the company will continue to remain listed on the stock exchanges,” it said.All equity shares tendered in the delisting offer shall be returned, it added.”12:00 PMMumbai power outage: BSE, NSE functioning normallyThe stock bourses remained unaffected by the surprise power outage in Mumbai.PTI reports: “Leading stock exchanges BSE and NSE on Monday said said they were functioning normally, amid a major power outage in large parts of Mumbai.“There is a power failure in south Mumbai. Exchange is working normally. The listing ceremony was concluded successfully for Mazagon Shipbuilders today morning,” a BSE spokesperson said.The NSE too said it is functioning normally.Large parts of the financial capital reported a major power outage on Monday morning due to a technical failure.In a tweet, Brihanmumbai Electricity Supply and Transport (BEST) said “the electric supply is interrupted due to TATAs incoming electric supply failure“.Multiple operators, including the state-run BEST, Adani Electricity and Tata Power supply power to the city.”11:30 AMGST Council to discuss compensation issue for third time in a row on October 12The GST Council in its meeting on Monday is likely to discuss the suggestion of non-BJP ruled States of setting up a ministerial panel to develop consensus on the issue of compensation, sources said.The Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising of State Finance Ministers, will for the third time in a row discuss the issue of funding the shortfall of Goods and Services Tax (GST) revenue of States.While some Opposition ruled States are demanding that a Group of Ministers be set up to arrive at a decision on the mechanism for funding compensation shortfall, BJP ruled States, which have already opted for the borrowing option given by the Centre, are of the view that they should be given a go ahead so that they can get money quickly.
11:00 AMCovid-19 accelerates the fall of small businesses
Smaller businesses are getting hammered during Covid, accelerating a trend already in place pre-pandemic. In 1989 businesses with fewer than 100 employees accounted for 40% of workers employed by all U.S. firms. As of 2018, that had fallen to 33%. https://t.co/J2zJqIet69 pic.twitter.com/jjycf58AqK— Lisa Abramowicz (@lisaabramowicz1) October 11, 2020
10:40 AMRupee edges 3 paise higher at 73.13 in opening tradeSlight gains for the rupee this morning amid a positive opening for stocks.PTI reports: “The Indian rupee traded with moderate gains of 3 paise at 73.13 against the US dollar in the opening session on Monday, tracking softer crude oil prices and sustained buying in domestic equities.The domestic unit started off the session on a strong note at 73.10, up 6 paise, but ceded some ground as trade progressed and quoted 73.13 a dollar at 1020 hours.The domestic currency had settled 8 paise higher at 73.16 a dollar on Friday after the Reserve Bank kept key interest rates unchanged while retaining an accommodative stance.On a weekly basis, however, the domestic currency had lost 3 paise to the US dollar.Global crude oil benchmark Brent was trading 0.84 per cent lower at 42.46 a barrel.Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, gained 0.02 per cent to 93.07.On the domestic equity market front, the BSE Sensex was trading 246.06 points up at 40,755.55; and the NSE Nifty was 58 points higher at 11,972.Foreign investors had offloaded Indian equities worth a net Rs 39.39 crore on Friday, exchange data showed.”10:20 AMFuel demand rises in Sept. over AugustFuel demand in September rose month-on-month for the first time since June as easing coronavirus restrictions supported economic activity and travel, but consumption remained weaker than a year earlier, government data showed on Friday.Consumption of refined fuels rose 7.2% in September from the prior month to 15.47 million tonnes, the first increase since June when demand rose to 16.09 million tonnes.However, demand fell 4.4% from the same period a year earlier, posting its seventh consecutive year-on-year slide, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed.
10:00 AMIndian shares rally for eighth day as Infosys, private sector banks shineYet another good start to the day for the stock indices.Reuters reports: “Indian shares rose on Monday for an eighth straight session, driven by gains in IT major Infosys Ltd and private-sector lenders, while investors also eyed inflation data due later in the day.The NSE Nifty 50 index rose 0.6% to 11,989.00 as of 0346 GMT, while the S&P BSE Sensex was up 0.7 % at 40,798.97. IT major Infosys Ltd, due to report results later this week, was up 0.6%.Shares in UTI Asset Management and Mazagon Dock Shipbuilders are set to make their debut on the exchanges later in the day, while consumer price inflation data is due at 1200 GMT.India’s central bank appealed to the country’s top court to let banks classify loans as non-performing, saying a ban imposed to help borrowers in the COVID-19 pandemic could greatly harm the nation’s financial system. That helped banking stocks, sending the Nifty banking sub index up 1%.”
-South Korea, Australia, Hong Kong, China stocks ⬆️-Japan stocks ⬇️-Yuan falls as much as 0.7% lower against the dollar after policy makers acted to restrain its strength by making it easier to bet against-Oil ⬇️1%-Gold ⬇️https://t.co/qVRt4zVdZb pic.twitter.com/wrceTJFI3i— Bloomberg Asia (@BloombergAsia) October 12, 2020
9:30 AMPerils of treading the PE pathLast week, I was interviewing a fresher. His enthusiasm for stock markets was infectious. He excitedly opened his mobile to show me the list of stocks he had filtered using online financial screeners.He was going to start investing in, what he thought were, stocks that the rest of the market had not ‘discovered.’ And at prices that he thought were true ‘value.’ Not surprisingly, I found many of his low PE stocks were value traps or worthless.If you are a new investor like him, running screeners through equity apps to pick your stocks, here’s what you need to know about the PE ratio.PE ratio is nothing but the measure of the price of a company’s stock as a multiple of the earnings that a company generates/seeks to generate. The PE ratio is calculated either using the current earnings per share (annualised) or the trailing, four-quarter earnings or the expected earnings per share (forward PE).Many stock market crash courses will teach you to ask yourself whether a company will grow at the rate of its PE. For example, when a stock’s PE is 35 times, the question you are required to pose is whether you expect a 35% growth in the company’s earnings.