When a cyclical downturn hits the economy, big businesses get bigger, smaller ones struggle to survive while the dwarfs evaporate. As that story played out in India post GST rollout, the government handed another shot in the arm to the top 200 companies with the corporate tax cut. About time, the government spared a thought for the smaller businesses in the Budget. Because, at the end of the day, they form the backbone of the real economy.
STREET PULSE: Where we stand Nifty futures on Singapore Exchange traded 16 points down at 7 am (IST), signalling a weak start to trade on Dalal Street. Elsewhere in Asia, stocks drifted in thin trading on the last day of a year that has delivered spectacular returns across asset classes.
HERE'S WHAT TO WATCH  | Equities in Sydney had the biggest decline, with volumes more than 30% below average. New Zealand ended down. Hong Kong and China shares were mixed. Several markets including Japan are closed for holidays, while some have shortened trading sessions. |
| Overnight, stocks on Wall Street fell in their biggest one-day decline in four weeks after a record run. Dow fell 183 points, the S&P500 lost 18.73 points and the Nasdaq 60.62 points. |
| Oil prices edged lower on the final day of the year on Tuesday, but were on track for their biggest annual rise since 2016, supported by a thaw in US-China trade dispute and ongoing supply cuts. Brent futures for March delivery, the new front month contract, were down 11 cents at 66.56 a barrel, while WTI crude for February fell by 11 cents, or 0.2%, to $61.57. |
| The rupee appreciated by 4 paise to settle at 71.31 against the US currency amid weakening of the US dollar in overseas markets even as crude oil prices surged. |
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Cheaper Home Loans… SBI, the country's largest lender, slashed its external benchmark rate by 25 basis points to 7.8%, bringing cheer to mortgage borrowers and small businesses. The rate cut takes effect on January 1 but will benefit borrowers who have taken loans after October 1. New home loan borrowers will get mortgages starting at 7.9% compared with 8.15% earlier, SBI said in a statement.
Read More | Portfolio strategy for the New Year: Zeroing in on 2020's outperformers >>> |
| IPOs worth Rs 50,000 crore to light up Street next year >>> |
Air India Suitors… IndiGo and Abu Dhabi-based Etihad Airways have met government officials and evinced interest in ailing national carrier Air India. "Representatives from these companies have met government officials and, unofficially, shown interest in the national carrier. The Tata Group, however, has not shown any interest yet," a government official said. The government, which could not sell 76% in Air India last year, is offering 100% stake this time. But the response to road shows in Singapore and London were not encouraging.
Read More Huawei Gets All-Clear… The government has decided to allow all network equipment makers, including Huawei, to participate in 5G trials. This is the first time that India, caught in a diplomatic and economic tussle between the US and China, has taken an official stance on the matter. It boosts the Chinese company's hopes of playing a part in the deployment of the next-generation technology in India despite US objections.
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Tighter Purse Strings… The Finance Ministry has cut the amount various ministries and departments can spend in the last quarter to a maximum of 25 per cent of their Budget estimate for the entire financial year, citing the fiscal situation. The earlier limit for the last quarter spending was 33 per cent. Also, within the 25 per cent cap on spending for January-March, only a maximum of 10 per cent of the total Budget can be spent in March against 15 per cent earlier.
Read More Tax Notice on Ambanis... The income-tax department has sought clarifications from overseas following show-cause notices to the family members of Reliance Industries Chairman Mukesh Ambani regarding alleged evasion on account of foreign income. The Ambanis have said the notices are illegal, challenged an HSBC note that sparked the case and argued that the law can't be applied with retrospective effect.
Read More Meanwhile... The Big Four are super-busy despite the taint of lapses. Audit firms Deloitte, PwC, EY and KPMG may be under the scanner for lapses in big corporate frauds, but their forensics businesses are competing fiercely to win assignments from banks, regulators and companies. Forensic probes are currently under way at CG Power, IMA Bangalore, DHFL, Karvy, FIS India, PMC Bank and Infosys, among others, and given the complexity of assignments, competence and track record, they are certain to corner a large share of these projects. In addition, there are at least 30-40 ongoing bids or assignments that are in various stages of talks.
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