Morning News Call – India, January 6

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INDIA TOP NEWS • Indian court halts Amazon, Future arbitration in blow to U.S. giant A Delhi court has halted arbitration proceedings between Indian conglomerate Future Group and its estranged U.S. partner Amazon.com in light of the national antitrust agency’s suspension of a 2019 deal between the two sides. • India’s services growth slows in Dec, inflation pressures persist India’s services sector expanded for a fifth straight month in December, albeit at a slower pace than in the previous month, as demand rose but concerns over another wave of COVID-19 and inflationary pressures cast a shadow over the outlook, a survey showed. • Bharat Biotech gets approval to test nasal COVID-19 shot as booster – report India’s drug regulator on Wednesday granted approval to Bharat Biotech for conducting late-stage trials of its nasal COVID-19 vaccine to be used as a booster shot, according to a Mint report, which cited ANI. • India says safety concerns restricting use of Merck COVID pill India has not added Merck’s COVID-19 pill to its national treatment protocol for the disease due to known safety concerns that have restricted its use elsewhere, a senior health official told a media briefing on Wednesday. • India asks Xiaomi to pay $88 million in import taxes it found it evaded India on Wednesday said it had asked the local unit of Chinese smartphone giant Xiaomi to pay $87.80 million in import taxes after an investigation found that the company had evaded some duties. • India confirms first Omicron-related death as COVID-19 cases jump A diabetic man who died in the western state of Rajasthan was India’s first fatality from the Omicron COVID-19 variant, the health ministry said on Wednesday, adding that overall infections had doubled to 58,097 over the past four days. • Udaan raises $200 million via convertible notes Indian e-commerce firm Udaan has raised $200 million via convertible note financing in a round in which new and existing investors participated, an internal memo by the company’s chief financial officer said on Wednesday. GLOBAL TOP NEWS • Hawkish Fed signals it may have to raise rates sooner to fight inflation A “very tight” job market and unabated inflation might require the Federal Reserve to raise interest rates sooner than expected and begin reducing its overall asset holdings as a second brake on the economy, U.S. central bank policymakers said in their meeting last month. • Growth in China’s Dec services accelerates – Caixin PMI Activity in China’s services sector expanded at a faster pace in December amid higher demand and easing inflationary pressure but continuing small-scale COVID-19 outbreaks weighed on the outlook, a private sector survey showed. • Toshiba shareholder calls for extraordinary meeting to vote on break-up plan Toshiba’s second-largest shareholder called for an extraordinary investor vote to force the Japanese company to get two-thirds support before continuing with a controversial plan to split in three. LOCAL MARKETS OUTLOOK (As reported by NewsRise) • SGX Nifty nearest-month futures were trading 0.7% lower at 17,856.00. • The Indian rupee is expected to weaken against the dollar after U.S. equities plunged and Treasury yields climbed following the minutes of the Federal Reserve’s meeting last month. • Indian sovereign bond yields are likely to edge higher in early trade tracking U.S. Treasuries following the minutes of the Federal Reserve’s latest policy meeting. The yield on the benchmark 6.10% bond maturing in 2031 will likely trade in the 6.49%-6.55%. GLOBAL MARKETS • U.S. stocks fell sharply on Wednesday, with the Nasdaq plunging more than 3% in its biggest one-day percentage drop since February, after U.S. Federal Reserve meeting minutes signaled the central bank may raise interest rates sooner than expected. • Asian shares fell, extending a global slump after Federal Reserve meeting minutes pointed to a faster-than-expected rise in U.S. interest rates due to concerns about persistent inflation. • The dollar hovered near a five-year high to the yen, supported by a surge in U.S. Treasury yields on rising bets for a Federal Reserve rate hike by March. • U.S. Treasury yields soared on Wednesday after minutes of the last Federal Reserve policy meeting came in more hawkish than expected, flagging three or more interest hikes this year to quell surging inflation. • Oil prices lost ground, easing from their highest levels in more than a month as OPEC+ producers stuck to a plan to boost production and U.S. fuel stockpiles surged amid declining demand. • Gold prices were little changed, as a surge in U.S. Treasury yields following hawkish meeting minutes released by the Federal Reserve offset the precious metal’s safe-haven demand amid rising cases of the Omicron coronavirus variant. CLOSE FII INVESTMENTS EQUITIES DEBT PNDF spot 74.3/74.33 January 5 1,356.55 crore (126) crore 10-yr bond yield 6.5% Month-to-date 4,308 crore (317) crore Year-to-date — — (FII investment numbers are in Indian rupees. Source: National Securities Depository Limited) For additional data: India govt bond market volumes Stock market reports Non-deliverable forwards data Corporate debt stories [IN CORPD] Local market closing/intraday levels [IN SNAPSHOT] Monthly inflows [INFLOWS RTRS TABLE IN] ($1 = 74.42 Indian rupees) (Compiled by Priyanka Das in Bengaluru)