1. RBI cuts interest rate
The Reserve Bank of India’s (RBI’s) monetary policy committee cut interest rates on Wednesday. It announced the 25 basis point reduction on the back of a sharp fall in consumer inflation and the need to boost investment demand. A 100 basis points is one percentage point. The repo rate is now at 6%. This is the rate at which the central bank infuses liquidity into the banking system. The rate is at its lowest since November 2010. The RBI’s policy statement suggested that inflation may move higher. Markets are said to have interpreted this to mean that there is no further room for rate cuts. The BSE’s Sensex ended at 32,476.74, down 0.3%. Private investment demand remains weak, though lower cost of funds is said to have only a marginal role in reviving demand in the current scenario where companies are already highly leveraged, and banks have been hit by bad loans.
2. Apple beats expectations
Apple Inc. beat expectations when it declared results on Tuesday. The maker of the iPhone had higher sales than analysts expected. It also forecast higher revenues from the launch of the next edition of the iPhone later in the year. The company’s market capitalization hit a record high.
3. Lupin registers poor results
Pharmaceutical company Lupin Ltd reported a 59.4% fall in profit. It declared June quarter results on Wednesday. A combination of currency movements, weak performance in the US and the effect of the goods and services tax affected earnings. Sales in North America were down 26.8%. The region accounts for 42% of revenue.
4. SBI cuts savings rate
The State Bank of India (SBI) cut the interest rate on savings accounts on Monday. It reduced it from 4% to 3.5% per year. The country’s largest lender said that the cut will apply to deposits of up to Rs1 crore. The 4% rate will continue for deposits above the Rs1 crore mark. The move is said to be driven by the Rs1.5 trillion in deposits that came in just two months after demonetisation.
5. Auto sales rise
Car sales rose in July. Manufacturers sent more units to dealers during the month. The move was to help build stocks after the goods and services tax became effective on 1 July. Maruti Suzuki India Ltd’s recorded domestic sales of 154,001 units. This is a 22.4% rise over the same month last year for the market leader, according to a Mint report on Tuesday.
6. PMI dips on new tax
The roll-out of the goods and services tax (GST) seems to have impacted both services and manufacturing. The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) came in at 47.9. It was 50.9 in June. A value below 50 suggests contraction. The services reading came in at 45.9, compared to 53.1 in the previous month. Thursday’s services data makes it the lowest reading in nearly four years. Tuesday’s manufacturing reading is the lowest since February 2009.
7. L&T’s order inflows
Larsen and Toubro’s (L&T’s) order intake fell 11% to Rs26,400 crore compared to the June quarter last year. The fall is because of international orders and not domestic ones, a Mint analysis pointed out on Monday. Interestingly, infrastructure orders comprise 57% of total orders compared to 40% a year ago. This may indicate some green shoots.
8. Pakistan’s interim PM
Corruption allegations against former Pakistan Prime Minister Nawaz Sharif caused him to resign on 28 July. An interim prime minister, Shahid Khaqan Abbasi, took charge on Thursday. Sharif had to step down after Pakistan’s Supreme Court disqualified him, based on charges of corruption. Not a single one of Pakistan’s 27 prime ministers has completed a full term since its independence.
9. Flipkart-Snapdeal sale called off
E-commerce company Snapdeal (Jasper Infotech Pvt. Ltd) called off a much talked-about deal with rival Flipkart on Monday. The latter had offered $850 million to buy Snapdeal. The decision came even as Snapdeal has moved to reduce its employee costs. More than twice as many users had installed Flipkart’s application compared to Snapdeal, data shows.
10. Baba Ramdev’s apparel play
Yoga guru Baba Ramdev has announced that he would be getting into the clothing business. His company, Patanjali Ayurved Ltd, will launch a “swadeshi" clothing line by April, according to a spokesperson. The company plans to target Rs5,000 crore in sales in the first year, Mint reported on Thursday. The company has recorded over Rs10,000 crore in sales for the financial year ending March 2017.
Graphics by Prajakta Patil/Mint.
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