Refinitiv Newscasts - Asia Insight: Indian stocks edge higher in choppy trade as U.S. election looks too close to call

Geojit Financial Services

04/11/2020 08:30

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Source: Reuters Insider

Description: Indian shares edged higher on Wednesday following strong earnings
from blue-chip Sun Pharmaceutical Industries.
Gains were capped, however, by
an agonisingly close U.S. Presidential race, especially in major battleground
states.
Short Link: https://refini.tv/3kUh3lq

Video Transcript:

Welcome to your India focus on Asia Insight. I'm Angeline Ong. India’s
services returned to growth in October for the first time in eight months. The
IHS Markit Services Purchasing Managers' Index bounce to 54.1. Signs of
stabilization and services are likely to provide comfort to policymakers
grappling with the economic downturn. Now the services sector accounts for
around 55% of India's economy and nearly a third of its jobs. Indian shares
are on the rise for a third consecutive session as IT stocks gained after a
close US presidential election pushed the Dollar higher. The Nifty Banking
Index slipped though, snapping two sessions of gains. Vinod Nair, Head of
Research at Geojit Financial Services, says the policy of the United States
will be positive towards India no matter which candidate wins the election.
Across the rest of Asia, share markets were whipsawing as results from the
election prove far closer than polls had predicted. Some investors are now
hedging against the risk of a contested election or at least a drawn-out
process as mail-in ballots were counted. A tight race for the White House has
sent the Rupee to its lowest level since late August, tracking a decline in
other emerging market currencies. Traders say they expect the currency to
weaken further amid a bout of volatility across most financial markets. Now,
crude gave up its early gains even after industry data showed stockpiles in
the United States fell sharply. Trading was choppy as the outcome of the
election remains unclear. Virendra Chauhan, an oil analyst at Energy Aspects
in Singapore, says politics aside, there are European demand uncertainties
given the broad extensions of lockdowns. India’s crude oil imports fell
by almost 10% in September. Exports were down by almost a third. Asian’s
third biggest economy imports and exports refined fuels as it holds surplus
refining capacity. Now, the Reserve Bank of India is looking at diversifying
its foreign exchange reserve investments amid the fall in global interest
rates. Sources say it's likely to increase its gold investments as well as
buying Dollars and exploring investing in AAA-rated corporate bonds for the
first time. The RBI’s foreign exchange reserve stand at a record $561
billion. A look at some companies in the news then and shares of Sun
Pharmaceutical gained after the company forecast strong growth in its
specialty drugs portfolio over the next few years. The company reported a 70%
surge in second quarter profit on back of cost controls and a surge of sales
of Ilumya and Cequa. The Business Standard newspaper says Yes Bank is gearing
up to sell non-performing assets worth $434 million to asset restructuring
companies. It has appointed EY to advise it on sale. Now, the sale will help
the bank regain its lost place in the banking industry, which was marred by a
scandal involving its former promoter Rana Kapoor. The bankrupt Jet Airways,
the world's best-performing stock airline, its shares have surged almost 150%
this year. The rise has traders scratching their head since the carrier has
not flown since April 2019 after collapsing under a pile of debt. Traders say
it may be that retail investors are piling into the stock in the hope that
restructuring talks will get planes flying again. Jet has almost 17,000
creditors seeking claims of around $3.4 billion and has had most of its
landing slots confiscated. It does not have any employees to speak of either.
And finally winds and ventilation have failed to improve air quality in New
Delhi, as the burning of farm residue in neighboring Punjab and Haryana state
intensifies. Satellite images by NASA shows several dense clusters of red and
orange dots only over Punjab, indicating the rise in fires across the state.
The overall air quality index in the national capital was reported at 316. The
World Health Organization puts a safe figure at 50. And that’s it from
your India focus on Asia Insight. I’m Angeline Ong and this is Reuters