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Rupee rises 14 paise to 71.58 against US dollar in early trade

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The rupee appreciated by 14 paise to 71.58 against the US dollar in early trade on Monday as China’s easing move and rate cut hopes by the US Fed enthused investors.

Forex traders said market investors were optimistic about cut in interest rates by the US Federal Reserve following below-par US jobs data.

Besides, China’s easing move also enthused investors.

In a bid to inject more liquidity into the economy, the People’s Bank of China on Friday said it would slash the amount of cash lenders must keep in reserve to its lowest level in 12 years.

At the interbank foreign exchange the rupee opened at 71.72, then gained further ground and touched a high of 71.58, registering a rise of 14 paise over its previous close.

Rupee had settled at 71.72 against the US dollar on Friday.

Forex traders however said said weak opening in domestic equities weighed on the rupee.

Domestic bourses opened on a negative note on Monday with benchmark indices Sensex trading 129.77 points higher at 36,852.00 and Nifty up 31.90 points at 10,914.30.

Moreover, sustained foreign fund outflows and rising crude prices also dragged the local currency down.

Foreign institutional investors (FIIs) remained net sellers in the capital market, pulling out Rs 957.05 crore on Friday, according to provisional exchange data.

Brent crude futures, the global oil benchmark, rose 0.96 per cent to trade at USD 62.13 per barrel.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.04 per cent to 98.43.

The 10-year government bond yield was at 6.59 per cent in morning trade.

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Business

Rupee slips 7 paise to 71.26 against USD as China virus fears spooked investors

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The rupee depreciated by 7 paise to close at 71.26 against the US dollar on Thursday as the spread of a deadly new virus from China spooked investors.

However, softening crude prices and strong domestic equity market restricted the rupee’s fall, forex dealer said. At the interbank foreign exchange market, the local currency opened on a weak note at 71.21. During the day, it swung between a high of 71.16 and a low of 71.35.

The Indian currency finally settled at 71.26, registering a 7 paise decline over its previous close.

“USD/INR Pair traded in range of 71.20–71.30, as markets looks out for new triggers rupee keeps trading in range but with weak bias due to corona virus being spread in China, which can dampen investment infusion. Rupee can be range of 71.20-71.35 in coming sessions,” Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities said.

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Reliance outpaces industry in petrol, diesel sales from its outlets

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Reliance Industries Ltd (RIL) has outpaced industry in clocking double digit sales growth in petrol and diesel from its nearly 1,400-odd petrol pumps in the third quarter ended December 31, 2019.

In an investor presentation post announcing earnings for October-December 2019, Reliance, operator of the world’s largest oil refining complex, said it registered an 11 per cent growth in diesel sales and 15 per cent growth rate in petrol sales from its 1,394 fuel retail outlets.

This is compared to industry growth rate of 0.2 per cent for diesel and 7.1 per cent for petrol.

Its per outlet throughput at 342 kilolitres per month was also nearly double that of petrol pumps operated by public sector firms such as Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL).

“Superior product mix and high asset utilisation underpinned strong earnings,” it said in the presentation adding India’s oil demand grew 3.2 per cent in October-December with petrol demand rising 7.1 per cent and LPG surging by 15 per cent.

“Preference for petrol cars, improving road infrastructure and rural connectivity is driving petrol demand,” it said. A pick up in tourist movement post festive season provided support to ATF demand.

Reliance said there was a strong traction in retail and bulk fuel sales through its network.

“Growth driven by focus on large fleet customers (25 per cent year-on-year growth), fleet aggregators (114 per cent),” it said.

Its ATF sales were driving up via new customer acquisition and higher share from existing customers. “Improved ATF network competitiveness through logistical and supply source optimization,” the presentation said.

LPG sales was up 37 per cent with new customers and increasing penetration in new markets.

Reliance said its petrol retail sales revenues were up 5 per cent at Rs 3,725 crore in the third quarter. As much as 538 million litres of fuel was sold in the three month period.

Of the 1,394 petrol pumps that Reliance operates, 518 are company owned and the remaining dealer operated.

In April last year, Reliance agreed to sell 49 per cent in its petro retail business to UK’s BP plc for Rs 7,000 crore. Reliance-BP joint venture agreed to expand the network to 5,500 in the next five years.

The country currently has 66,817 petrol pumps, with public sector retailers owning 59,716. PSU retailers have plans to double this network and have already starting appointing dealers. Russia’s Rosneft-backed Nayara Energy, formerly Essar Oil, has 5,525 petrol pumps and has plans to scale them up to more than 7,000 in two-three years. Royal Dutch Shell has 169 outlets and is slated to add 150-200 more petrol pumps.

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Amazon’s $1-bn investment not a favour for India: Piyush Goyal

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Commerce minister Piyush Goyal on Thursday said global online retail giant Amazon.com Inc indulged in predatory pricing even as Bharatiya Janata Party leader Vijay Chauthaiwale took a dig at its founder Jeff Bezos for publishing “unduly” critical reports on the Modi government in The Washington Post, which he owns.

A day after Bezos, currently on a visit to India, announced fresh investments of $1 billion in India, Goyal said Amazon was not doing any favours to the country with its investment asked whether the huge losses made by the company were linked to “predatory pricing or some unfair trade practices”.

Goyal acknowledged Amazon’s investments in warehousing but asked whether the money was being brought in “largely to finance losses in an e-commerce market place model.” He added that this raised questions of “where the loss came from”.

There has been considerable pressure on the government from the affiliates of the Rashtriya Swayamsevak Sangh, its ideological parent, and also trader groups to reconsider the policy on FDI in online retail. Traders claim Amazon is taking away their business. Amazon’s position is that it serves as a platform in India and that many of the traders who complain are themselves on the platform.

Ashwani Mahajan of the Swadeshi Jagran Manch, an affiliate of the RSS, said Goyal’s comments indicate that the Centre may have become “more sensitized to the problems of opening up FDI (in online retail)”.

“There is a fear in every trader’s mind that these global chains will kill their business.”

Meanwhile, reacting to a statement by Bezos where he said the 21st century will be India’s; Chauthaiwale tweeted: “@JeffBezos, please tell this to your employees in Washington DC. Otherwise your charm offensive is likely to be waste of time and money.”

“I am a regular customer of Amazon and not against them. But I am definitely against what Washington Post is writing,” Chautaiwale said.

An Amazon spokesperson did not immediately comment on the matter.

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