News Nook: Dec 6, 2024

Indian Sector Specific News:

A) BFSI:

1) SEBI Proposes New Closing Price Mechanism

• Currently, stock closing prices are calculated using the average price of trades done in the last 30 minutes (VWAP). SEBI now wants to use a new method called a 15-minute Call-Auction Session (CAS) to decide closing prices. 
• Instead of relying on the average of many trades, SEBI plans to set the closing price based on a 15-minute session where buyers and sellers meet to decide a single price through demand and supply, aiming to reduce volatility and improve accuracy on high-event days like index rebalancing.
• This unified price will better reflect the stock's actual value and prevent unusual price swings caused by big trades, especially on days with events like index changes.
• Source: Moneycontrol

2) Sensex Tops 82,000, Nifty Surges Past 24,750 Ahead of RBI Policy

• Indian markets rallied with the Sensex rising over 800 points and Nifty gaining 240 points, driven by strong buying in heavyweight IT stocks like TCS, Infosys, and Wipro. Optimism from FIIs and positive global cues, including US Fed Chair Powell's remarks on economic resilience, boosted sentiment.
• FII inflows reversed from months of selling, injecting ₹5,224 crore in December so far. Global and local optimism around economic growth and expectations of RBI's rate-cut signals further lifted markets.
• Source: Moneycontrol

3) Business Correspondents May Soon Sell Insurance to Boost Rural Inclusion

• The Business Correspondent Resource Council (BCRC) has urged IRDAI to let bank BCs sell insurance products, including weather-indexed schemes, to support rural buyers impacted by climate-related shocks.
• With India's insurance premium income surging from ₹1 trillion in FY05 to ₹6.7 trillion in FY24, leveraging BCs and digital banking units could deepen insurance penetration and strengthen financial inclusion.
• Source: Business Standard

4) Sebi Orders Mishtann Foods to Return Misappropriated ₹100 Crore, Bars Key Entities

• Sebi uncovered ₹100 crore misappropriated by Mishtann Foods through circular trading with shell entities controlled by its directors. Promoters, directors, and auditors are barred from markets for two years.
• The company inflated financials and diverted funds to personal accounts. Sebi demands fund recovery within 45 days and scrutiny continues, with possible criminal proceedings.
• Source: Economic Times

B) Pharma:

1) Pharmexcil Collaborates with E&Y for Handbook on Pharmaceutical Exports

• Pharmexcil, with Ernst & Young (E&Y), is creating a Sectoral Handbook on Drugs and Pharmaceutical Exports to boost India's global market competitiveness. Pharma exporters and stakeholders are invited to provide inputs for the draft through a detailed questionnaire.
• The handbook aims to guide businesses and policymakers in aligning with international market demands, enhancing India's position in pharmaceutical exports.
• Source: Pharmabiz

C) Telecommunication:

1) Telecom Stocks See Gains as BSE Telecommunication Index Rises

• The BSE Telecommunication index rose by 22.6 points (0.76%) to 2977.98 at 09:30 IST. Top gainers included ITI Ltd (+8.46%), MTNL (+6.54%), and Bharti Hexacom Ltd (+1.59%).
• Broader market indices also saw gains, with the BSE SmallCap index up 0.2% and the BSE Sensex up 46.97 points (0.06%) to 81812.83.
• Source: Capital Market

D) Agriculture:

1) Government Commits to MSP Procurement Amid Farmers' Protests

• Union Agriculture Minister Shivraj Singh Chouhan assured the Rajya Sabha that the Modi government will purchase all farm produce at the Minimum Support Price (MSP), emphasizing the administration's commitment to farmers.
• Chouhan highlighted past governments' failure to adopt the M.S. Swaminathan Commission's recommendations on MSP calculations, contrasting it with the Modi government's proactive stance.
• Source: Economic Times

E) Energy:

1) Equinor and Shell Announce UK Oil & Gas Joint Venture

• Norway's Equinor and Shell will merge their UK offshore oil and gas assets into a 50:50 joint venture based in Aberdeen, Scotland. The entity aims to sustain Britain's energy supply and domestic production.
• With stakes in key fields like Mariner, Rosebank (Equinor), and Shearwater, Clair (Shell), the venture is projected to produce over 140,000 barrels of oil equivalent per day by 2025, becoming the largest independent producer in the British North Sea.
• Source: Business Standard

F) IT:

1) IT Companies Face Margin Pressure in Q3FY25: SBI Securities

• Margins for Indian IT firms are projected to decline in Q3FY25 due to fewer working days, furloughs, and wage hikes. Seasonal and structural factors, alongside geopolitical tensions and U.S. policy uncertainties, add to the challenges.
• Positives include favorable currency movements, a strong deal pipeline, declining attrition, recovery in BFSI discretionary spending, and higher capacity utilization, which could support medium-term growth.
• Source: BW Online

2) Google Partners with Andhra Pradesh to Drive AI Adoption

• Google has partnered with the Andhra Pradesh government to advance AI adoption in healthcare, sustainability, and startups. The collaboration includes AI skill development, startup support, and pilot projects in agriculture, traffic management, and citizen services.
• Google will provide 10,000 certificates for its Google AI Essentials course and other certifications in cybersecurity and data analytics. The partnership aims to address real-world challenges and boost the state's growth through AI technology.
• Source: Financial Express

Indian Economy and Government Initiatives:

• The RBI's Monetary Policy Committee (MPC) will announce its bi-monthly policy decisions on December 6, 2024, at 10:00 am, with a live address by RBI Governor Shaktikanta Das.
• The live address will be streamed on RBI's official YouTube channel and social media platforms, with a press conference scheduled for 12:00 pm.
• The RBI's Monetary Policy Committee kept the repo rate unchanged at 6.5% for the 11th consecutive time, citing persistent inflation concerns despite slowing economic growth. The central bank maintained a 'neutral' stance, focusing on controlling inflation, particularly high food inflation.

Bonus Briefs:

• Geopolitical Uncertainty May Drive Market Volatility: Markets were resilient in 2024 despite geopolitical risks, but 2025 could see more volatility due to potential changes in U.S. leadership, trade conflicts, and military tensions, such as the ongoing wars in Israel and Ukraine.
• Inflation and Protectionist Policies Could Impact Global Economy: With increasing protectionist policies and rising defense spending, inflation could stay high, affecting markets and economic growth, especially in the U.S., EU, and China.
• Unpredictable Government Policies Could Shake Markets: Changes in fiscal, trade, and immigration policies—particularly with the U.S. elections—could create policy uncertainty, making financial markets more unpredictable, especially for weaker corporate issuers and emerging markets.