Latest Business News of the Day: Sensex and NIFTY Rally as Exit Polls Predict a Landslide Victory for the NDA Govt, Oil Prices Rise Amid Production Cuts by OPEC, UPI Transactions Gain Pace

Sensex and NIFTY rally as exit polls predict a landslide victory for the Narendra Modi led NDA government. Oil prices rise amid production cuts by OPEC. State-run oil marketing companies hike diesel and petrol prices post elections. Japan’s GDP rises 2.1% in Q1. Japan’s Orix to buy IL&FS Group’s wind assets. UPI transactions overtake those made by debit and credit cards in January. RBI working on liquidity line for NBFCs. Uber and Ola cut down investments in their food business.

 

Moving on to the top Business news of the day.

 

 ELECTIONS 

 

Sensex and NIFTY rally as exit polls predict a landslide victory for the Narendra Modi led NDA government.

 

Record High: Benchmark indices ended Monday's session at record closing high, surging almost 4%, a day after exit polls predicted the return of the Narendra Modi-led National Democratic Alliance (NDA) to power.
 

S&P BSE Sensex reclaimed the 39,000-mark, while the Nifty Bank posted its biggest one-day gain.
 

Sensex ended the day 3.75%, or 1,422 points, higher at 39,352. SBI, IndusInd Bank, Larsen & Toubro, and YES Bank leading the list of gainers.
 

Up and Up: Nifty extends gains to close at 11,828, up 421points or 3.69%.
 

History suggests exit polls have often been wide off the mark, but analysts say the buffer between projected seats and the magical halfway mark of 272 is heartening. More on this here

 

 OIL 


Oil prices rise amid production cuts by OPEC. State-run oil marketing companies hike diesel and petrol prices post elections. 
 
 
Stet: Oil prices rose to multi-week highs on Monday after Saudi Energy Minister Khalid al-Falih indicated towards a consensus among OPEC and allied oil producers to continue with regulated supplies that have helped support prices this year. 
 
 
Brent crude was up by 90 cents, or 1.3%, at $73.11 a barrel, having earlier touched $73.40, the highest since April 26.
 
 
US West Texas Intermediate crude was up 71 cents, or 1.1% higher, at $63.47 a barrel. The US benchmark reached $63.81 earlier, the highest since May 1.
 
 
Previously: OPEC, Russia and other non-member producers, an alliance known as OPEC+, agreed to cut output by 1.2 million bpd from Jan 1 for six months to prevent inventories from increasing and weakening prices.
 
 
State-run oil marketing companies hiked diesel and petrol prices today, across Delhi, Mumbai, Kolkata and Chennal. While, petrol prices have been raised by 8-10 paise a litre, diesel prices were increased by 15-16 paise a litre.
 
 
Crude oil prices have been under pressure due to trade tensions between US and China.
 
 
 JAPAN 
 
Japan’s GDP rises 2.1% in Q1. Japan’s Orix to buy IL&FS Group’s wind assets.
 
 
A Pleasant Surprise: The Japanese economy clocked an unexpected growth of 2.1% in Q1 2019, amidst the ongoing US-China trade war.
 
 
The economy expanded an annualized 2.1% during the January-March period, following 1.6% revised growth in the previous quarter.
 
 
Racing Ahead: The gain was attributed to positive net exports and an increase in government spending, which offset weaker private investment and personal consumption.
 
 
 
The seven wind power plants, owned by IL&FS Wind Energy Limited (IWEL) in the form of special purpose vehicles (SPVs) are spread across 12 states, and have a total generation capacity of 874 MW.
 
 
 FINANCIALS 

UPI transactions by value have overtaken those made by debit and credit cards in January. RBI working on liquidity line for NBFCs. 
 
 
Marching Ahead: The value of transactions on the Unified Payments Interface (UPI) platform recorded this January - INR1.09L cr, overtook those made by debit and credit cards at INR1.05L cr. 
 
 
However, the ticket sizes of UPI-based payments, especially person-to-merchant (P2M) transactions, remain relatively small (INR500-INR1,000) as consumers tend to opt for netbanking over UPI and wallets for larger payments.
 
 
Interesting to note is the fact that the volume in the initial adoption phase of UPI was driven by incentives that led to high volumes but low ticket sizes.
 
 
Line of Credit: RBI is working on a liquidity line for non-banking financial companies (NBFCs), including opening a special borrowing window for NBFCs, similar to what banks have.
 
 
The RBI is unlikely to offer liquidity directly, but through banks, for which a special concessional liquidity window can be opened.
 
 
 INSIGHTS 

Uber and Ola cut down investments in their food businesses.
 
 
 
While Ola’s pullback is more drastic, Uber has halved the annual allocation for its food-delivery business in India to $90-$120m.
 
 
Uber’s decision to cut spends comes at a time when talks to sell its food delivery business in India to Swiggy fell through on the back of its IPO plan, which entailed cost-cutting by management.
 
 
With Ola and Uber mark their withdrawal, the battle for dominance in India’s fast-growing online food delivery market is back to being a two-way affair between Swiggy and Zomato,
 
 
Brownie Points: Kishore Biyani’s entrepreneurial journey has been a rollercoaster ride since he first started selling fashion fabric to garment manufacturers in November 1983. Over the last four decades, Biyani has been through several cycles of business and technology disruptions, including the economic slowdown of 2008 when he had to scale down the business, negotiate with the lenders and rejig the operations.
 
 
Listen In: Kishore Biyani on his survival lessons for the future here.
 
 
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