Top Business News Today: Gold Price in India Rises to Four-Month High, US Stock Futures Slide

Gold price in India rises to four-month high. US stock futures slide on back of weak Chinese industrial output data, fall in chipmaker shares. Facebook invests in Indian social-commerce startup, Meesho. SEBI to put in place a rigorous disclosure regime for credit rating agencies. WPI inflation slips to near 2-year low in May, declines to 2.45%. India to impose retaliatory tariffs on 29 US products. Facebook signs up Visa, Mastercard, Paypal and others to back its new cryptocurrency. Huawei delays launch of foldable phone.

 

Moving on to the top Business news today: 

 

 TRADE 

 

India to impose retaliatory tariffs on 29 US products. Gold price rises to four-month high.

 

We Won’t Keep Calm: Less than a week after Washington withdrew duty-free benefits for Indian exporters, India has decided to impose the long due retaliatory tariffs on 29 US products.

 

India has repeatedly postponed imposing the retaliatory tariffs on US goods worth $235m since it first announced these on 20 June last year. The current deadline expires on 16 June.

 

US had earlier this month terminated India’s designation as a beneficiary developing nation under the key Generalized System of Preference (GSP) trade programme with effect from June which allowed $5.6bn worth of Indian exports to enter the US duty free.

 

Gold Rush: Gold prices in India rose by INR331 to INR33,290 per 10 gram, their four-month high today on back of global geopolitical tensions, escalating US-China trade worries and stronger Rupee.

 

 GULF 

 

US stock futures slide on back of weak Chinese industrial output data, fall in chipmaker shares.

 

US stock futures witnessed a slump on Friday on back of a fall in semiconductor shares alongside weak Chinese industrial output data. 

 

Dow Jones futures were lower by 0.2%, S&P 500 futures slipped 0.3% and Nasdaq futures were off by 0.8%.

 

The fall in chipmaker shares is believed to have been primarily triggered by Broadcom’s weak quarterly results. Broadcom also lowered its full-year revenue guidance, stating that the US-China trade tensions and export restrictions on Huawei were hurting demand for chips. 

 

Also This: Chinese industrial production was up 5.5% Y-o-Y, the slowest pace of growth in 17 years, yet another instance of the US-China trade tensions affecting growth.

 

The Blame Game: The Trump administration on Thursday blamed Iran for an attack on two oil tankers at the mouth of the Persian Gulf. 

 

Early Thursday morning, a Norwegian and a Japanese tanker carrying oil products from the Persian Gulf to Asia reported explosions while in the Gulf of Oman and burst into flames. All 44 sailors on both ships were rescued by US and Iranian naval vessels. 

 

The news comes only a month after four other tankers were attacked in the same area, after Iran vowed to close the vital Strait of Hormuz to all traffic if US sanctions on its oil exports intensified. US officials blamed Iran for that earlier attack, though they have not yet presented evidence to back up their assertions.

 

More on this here.

 

 MEESHO 

 
Facebook invests in Indian social-commerce startup, Meesho. 
 
 
Facebook Invests in “Meri Shop”: In a first, social media platform, Facebook has invested an undisclosed amount in exchange for a minority stake in Meesho, an online marketplace that connects sellers with customers on social media platforms such as WhatsApp, in an attempt to explore new options for revenue generation.
 
 
Previously: In July 2014, Facebook had acquired Little Eye Labs, a Bengaluru-based startup that makes a software tool to analyse the performance of Android apps, for a reported $10m-$15m.
 
 
The Bengaluru-based company, Meesho has so far raised over $65m, including a $50m series C funding round just about seven months ago. Meesho was also incubated at one of US’s top startup accelerator, Y Combinator, in 2016.
 
 
Beat the Heat: Some look at this as a good branding exercise by Facebook, at a time when it is facing heat due to regulatory overreach. 
 
 

 INDIA 


SEBI to put in place a rigorous disclosure regime for credit rating agencies. WPI inflation slips to near 2-year low in May, declines to 2.45%. 
 
 
Attention!: Markets regulator, Securities and Exchange Board of India (SEBI) to put in place a rigorous disclosure regime for credit rating agencies (CRAs).
 
 
What Has Changed: CRAs now have to specify upfront key details, which they think could lead to a default. They should also provide their rationale for their rating.
 
 
The move comes on back of the recent crisis at entities such as IL&FS, DHFL, Essel Group, Yes Bank and Reliance Anil Ambani Group, where debt instruments were rated AAA or equivalent at the time of investment and de-rated later.
 
 
For Some Perspective: Public funds in India mainly invest in debt instruments based on ratings from CRAs, which now have to list out sensitive factors, including financials and sectoral details, that could impact the rating of a debt instrument.
 
 
In Other News: Wholesale price-based inflation slipped to 22-month low at 2.45% in May vs 3.07% in April and 4.78% in May 2018.
 
 
The fall in WPI was supported by fall in prices of food articles, fuel and power items.
 
 
 TECH 
 

Facebook signs up Visa, Mastercard, Paypal and others to back its new cryptocurrency. Huawei delays launch of foldable phone.
 
 
Facebook has signed up more than a dozen companies including Visa, Mastercard, PayPal and Uber to back its new cryptocurrency, which it plans to unveil next week and launch next year.
 
 
What: These companies will invest around $10m each in a consortium that will govern the digital coin, called Libra. 
 
 
This money will be used for funding the creation of the coin, which will be pegged to a basket of government-issued currencies to avoid regulatory overreach. 
 
 
Fold on Hold: Huawei has decided to delay the launch of its foldable phone “Mate X”, which was earlier targeted to launch this month, as it does extra tests, perhaps after Samsung’s foldable smartphone broke down earlier this year during reviews by the media.
 
 
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