FPI outflow hits six-month high: Rs 34.99 crore offloaded in August; US tariffs, high valuations fuel pull-out
Foreign investors significantly withdrew Rs 34,993 crore from Indian equity markets in August, marking the largest divestment in six months. This outflow, driven by US tariffs and high domestic valuations, surpassed July's figures. Despite exchange selling, FPIs invested in the primary market and debt, reflecting a mixed investment strategy.from Latest Business News Today: Stock Markets, Financial News, India Business & World Business News https://ift.tt/k2lbhm7
In response to the US tariff hike, the government is preparing measures to protect industries and workers, focusing on employment-heavy sectors. Economic Affairs Secretary Anuradha Thakur expressed confidence in achieving the fiscal deficit target, citing strong macroeconomic fundamentals, robust capex, and broad-based economic expansion reflected in the 7.8% growth in the April-June quarter.
Optiemus Infracom, in collaboration with Corning, has launched India's first tempered glass manufacturing unit in Noida, with an initial investment of Rs 70 crore. The facility aims to produce 2.5 crore units annually, creating 600 jobs.
India-China trade has grown, but a significant trade deficit favoring China persists, raising concerns in India. Despite increased exports, imports from China far outweigh them, leading to a widening gap. This dependence on Chinese goods, particularly in key sectors, poses economic and strategic challenges for India, prompting measures to boost domestic manufacturing and diversify supply chains.
Reliance Industries unveils an ambitious green energy plan, aiming to establish the world's most comprehensive new energy system. The company will balance traditional energy dominance with increased renewable investments, targeting significant green hydrogen production and a massive integrated solar facility in Jamnagar. RIL envisions making India self-sufficient in energy within the next decade.
Power Finance Corporation (PFC) and Japan Bank for International Cooperation (JBIC) have formalized a loan agreement amounting to 60 billion Japanese Yen, approximately Rs 3,500 crore, to facilitate clean energy initiatives in India. This collaboration, under JBIC’s GREEN initiative, aims to bolster sustainable development and fortify economic relations between India and Japan.
Reliance Industries Chairman Mukesh Ambani declared India's rise as unstoppable at the company's Annual General Meeting. He highlighted India's rapid GDP growth, projecting a potential 10% annual increase with the right reforms. Ambani envisioned a four to five-fold rise in per capita income within two decades, fostering a more prosperous and equitable nation.
Maruti Suzuki India chairman RC Bhargava urged India to stand united against the 50% tariffs imposed by the US, emphasizing the need to maintain dignity and resist bullying. He acknowledged the global uncertainty caused by these tariffs and welcomed the government's plan to restructure the Goods and Services Tax (GST), hoping for a reduction on small cars.
Stock market today: Indian stock markets witnessed a significant downturn, with the Nifty50 closing at 24,500.90 and the BSE Sensex at 80,080.57. The decline was primarily attributed to newly imposed 50% US tariffs on Indian goods, triggering uncertainty among exporters.
The Indian government has cancelled the auction of five critical mineral blocks. This decision follows a poor response in the fifth round of sales. The cancelled blocks include a rare earth element mine in Karnataka. No bids were received for three blocks. Auctions for a tungsten mine and another REE block were also annulled.
The government is addressing failed transactions under the PM-Kisan scheme due to Aadhaar mapping issues and incomplete KYC. Banks are directed to improve communication with farmers and assist in meeting eligibility requirements. A financial inclusion drive is underway, boosting participation in Jan Dhan Yojana and social security schemes, alongside Re-KYC updates.
India's readymade garment industry faces a slowdown, with revenue growth projected to decrease due to tariffs impacting US exports. While domestic demand offers some cushion, profitability is expected to decline. Exporters are shifting focus to other markets like the EU and UK, hoping the FTA with the UK will provide relief.
The Asian Development Bank is poised to finance Pakistan's railway infrastructure upgrade, stepping in after delays in Chinese funding threatened the crucial Reko Diq mining project. The ADB will spearhead a $2 billion upgrade of the Karachi-Rohri section, essential for transporting copper ore. This intervention addresses concerns about evacuating output from the mine, with production slated to begin in 2028.
Global stock markets experienced a downturn on Tuesday following President Trump's actions, including the dismissal of a Federal Reserve official and threats of export controls on microchips. Asian and European markets reacted negatively, with indices like Hang Seng, Nikkei, and FTSE 100 all declining. These developments have heightened concerns about central bank independence and potential trade conflicts, impacting investor confidence.
OYO is preparing to file its DRHP in November, aiming for a $7-8 billion IPO valuation, approximately 25-30 times its EBITDA. SoftBank, a major shareholder, is confident after gauging market sentiment and plans to highlight OYO's strong Q1 performance. The company is also considering a new parent brand identity and a separate app for its premium hotels.
RBI Governor Sanjay Malhotra highlighted India's robust macroeconomic fundamentals and strong post-pandemic recovery at the FIBAC conference. He noted the economy's impressive growth, contained inflation, and a healthy external sector with sufficient foreign exchange reserves. Malhotra emphasized the importance of balancing regulation with growth to navigate the global economic environment effectively.
The Asian Development Bank has approved a $410 million package for Pakistan's Reko Diq copper and gold mine project. This initiative aims to tap into one of the world's largest undeveloped reserves, potentially making Pakistan the fifth-largest copper source by 2028.
Bajaj Auto has ensured a sufficient supply of rare earth magnets and other crucial materials, securing production for the festive season. Demand for their Chetak electric scooter remains strong, with deliveries now underway as supplies normalize.
The government is pushing domestic mineral security. Exploration has started in Mizoram and Assam. The Centre will consult northeastern states before extraction. The Mines and Minerals Bill, 2025 is a turning point. India aims for self-reliance in critical minerals. The National Critical Mineral Mission is cleared. It will run till 2030-31. Private firms are encouraged to explore abroad.
China might permit yuan-backed stablecoins. This move aims to enhance the yuan's global presence. The State Council will review a plan to compete with US stablecoins. Leaders will discuss stablecoin adoption. Hong Kong and Shanghai are expected to lead local rollouts. Discussions on yuan and stablecoin usage may occur at the Shanghai Cooperation Organisation Summit. This could reshape global finance.
A Group of Ministers (GoM) has accepted a proposal to streamline the GST rate structure, reducing it from four slabs to two. The existing 12% and 28% rates would be eliminated, leaving standard rates of 5% and 18%. This reform aims to simplify the indirect tax system, provide relief to various sectors, and create a more transparent and growth-oriented regime.
Starting November 1, 2024, Indian Railways has shortened the advance ticket booking window to 60 days, intensifying competition for seats during the festive season when migrant workers travel home.
Air Canada will gradually resume operations following an agreement with its flight attendants' union, CUPE, ending a strike that disrupted travel for approximately 130,000 passengers daily. The deal, reached after mediation, guarantees pay for ground work, a key issue for the union. While flights will resume Tuesday evening, full service restoration may take over a week.
The Cabinet Committee on Economic Affairs has approved the construction of a six-lane Capital Region Ring Road in Odisha. This project aims to reduce congestion in Bhubaneswar, Cuttack, and Khordha. The bypass will connect major National Highways and economic nodes. It will improve freight movement and boost socio-economic growth. The project is also expected to generate significant employment opportunities.
The Cabinet Committee on Economic Affairs, led by Prime Minister Narendra Modi, has approved the development of a new greenfield airport in Kota-Bundi, Rajasthan. The Airports Authority of India (AAI) will construct the airport at an estimated cost of Rs 1507 crore. The new airport will accommodate A-321 type aircraft and manage the expected increase in traffic in the area.
India's semiconductor ambitions receive a boost as Minister Ashwini Vaishnaw lauds progress in chip manufacturing, emphasizing the goal of becoming a "product nation." He highlighted the Design Linked Incentives (DLI) scheme, supporting startups like IIT-M incubated Mindgrove Technologies, which designs secure IoT chips.
The Centre is proposing a two-slab 'Next Gen GST' structure, sparking revenue concerns. Government sources clarify that the Centre and states share revenue equally, anticipating increased consumption to boost revenue over time. Despite initial concerns when the compensation cess period ended, GST revenues have improved, with tax buoyancy expected to rise further with proposed reforms.
Qantas Airways faced a penalty of $59 million for unfairly firing over 1,800 ground staff during the Covid-19 pandemic. This is in addition to the $78 million compensation already agreed upon. The court found the airline guilty of serious labor law breaches. Qantas CEO Vanessa Hudson apologized for the hardship caused.
During a holiday-shortened week, five of the top ten most valued companies experienced a surge in market capitalization, totaling Rs 60,675.94 crore, driven by positive market sentiment. SBI and HDFC Bank emerged as the frontrunners, while Reliance Industries maintained its position as the most valued firm. Conversely, LIC and Bajaj Finance witnessed a decline in their valuations.
Prime Minister Narendra Modi announced the circulation of the draft for next-generation GST reforms among states, urging their cooperation for implementation before Diwali. These reforms aim to simplify the GST law and revise tax rates, benefiting the poor, middle class, and businesses. Modi emphasized the government's continuous focus on reforms to ease the lives of people and businesses.
Sebi witnessed a surge in settlement applications, receiving 703 in 2024-25, a notable increase from the previous year. The regulator settled 284 cases, collecting significant settlement charges and disgorgement amounts related to various securities law violations. Simultaneously, difficult-to-recover dues rose to Rs 77,800 crore, even as Sebi actively addressed appeals before the Securities Appellate Tribunal.
India is strategically focusing on manufacturing mature-node chips (28nm-65nm) to address the rising demand in automotive, telecom, and industrial sectors. The government's Semicon India Programme, with significant financial incentives, is attracting manufacturers and fostering a local supply chain.
BofA Securities anticipates Nifty 50 fluctuations, projecting a year-end target of 25,000 amidst uncertainties like potential US trade tariffs and a shaky US economic outlook. While S&P Global Ratings upgraded India’s sovereign credit rating, the brokerage expects Nifty earnings to grow moderately, with markets potentially facing short-term corrections.
Infosys is empowering clients to significantly cut manpower costs, potentially by 5% to 35%, using its poly-AI framework. This adaptable AI architecture allows businesses to seamlessly shift solutions across different models, avoiding reliance on single tools. As tech spending slows, Infosys is developing autonomous agents capable of independent operation, boosting efficiency and lowering costs.
Following Bangladesh's decision to allow duty-free rice imports, Indian rice prices have surged by up to 14% in two days. Traders are rapidly exporting to Bangladesh, causing a temporary domestic supply disruption and pushing up retail prices of key varieties. Despite increased exports, India's rice stocks remain robust, potentially aiding market recovery from a global price dip.
Brazil unveiled a $5.5 billion support package to aid businesses hit by new US tariffs. President Lula da Silva's plan includes tax breaks and insurance for exporters. Simultaneously, the US imposed visa restrictions on Brazilian officials linked to Cuba's medical program.
China is easing urea export restrictions to India, potentially sending up to 300,000 tons, signaling improved relations amid trade tensions with the US. This shift follows increased tariffs by the US on Indian goods and comes after strained relations due to border conflicts in 2020.
Indian banks will observe closures for Independence Day on August 15, followed by Janmashtami on August 16 in several states, leading to a long weekend with limited services. While most states observe holidays, some states like Tripura, Maharashtra, and others will have banks operating on Saturday.
The Union Cabinet has approved four new semiconductor projects under the India Semiconductor Mission, boosting the nation's ecosystem. These projects, with an investment of Rs 4,600 crore, include India's first commercial compound fabrication facility and an advanced glass-based substrate packaging unit.
New Income Tax Bill 2025: The Lok Sabha has passed the New Income Tax Bill 2025, a major overhaul aimed at simplifying tax procedures for individuals and corporations. The revised bill, incorporating recommendations from a Parliamentary Select Committee, reduces text volume, streamlines the taxation timeline, and clarifies provisions for refunds and deductions.
Air India will suspend its Delhi-Washington nonstop flights from September 1, 2025. This is due to a shortage of wide-body planes. The airline is revamping its legacy fleet. Passengers can rebook or get full refunds. The retrofit program aims to enhance customer experience. Supply chain issues have delayed the completion to October 2028.
Tesla has inaugurated its second showroom in Delhi's Aerocity and is set to expand its supercharging network across key Indian metropolitan regions before commencing deliveries in September. The company plans to establish supercharging facilities in Gurugram, Noida, and Saket, prioritizing infrastructure development in Delhi and Mumbai.
Nobel laureate Abhijit Banerjee suggests India reassess Russian oil imports due to increased US tariffs, potentially impacting $27 billion in exports. He proposes leveraging trade negotiations with the US and China, including reconsidering investment restrictions. Banerjee also advises exploring ASEAN membership while acknowledging China's greater importance, and expresses concerns about India's economic growth and middle-class strain.
The Confederation of Indian Industry (CII) proposes comprehensive land reforms, including a GST-like council for coordinated policy and standardized stamp duty rates between 3-5% nationwide, to enhance India's manufacturing competitiveness. CII advocates for integrated land authorities in each state and complete digitization of land conversion processes.
Punjab National Bank aims to sell over 100 NPA accounts to ARCs, targeting recoveries of 40-50% and a total business of Rs 30 lakh crore by FY26. The bank is focusing on profitable growth, aiming for 11-12% credit growth and 9-10% deposit growth, while streamlining corporate lending and boosting MSME and agriculture sectors.
Indian stock markets anticipate a volatile week. Us tariff impact, first quarter earnings, and inflation data are expected. Investors will closely monitor India's CPI and WPI inflation figures. Global developments, especially US-India trade talks, are crucial. Key earnings from companies like Ashok Leyland and ONGC could drive stock movements. Foreign investors have already withdrawn funds, adding to market uncertainty.
Technocraft Ventures, a wastewater treatment solutions provider, has filed for an IPO with Sebi, consisting of a fresh issue of shares and an offer for sale by a promoter. The company intends to use the IPO proceeds for working capital and general corporate purposes. Technocraft Ventures reported a revenue of Rs 279.56 crore and a profit of Rs 28.
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