Herald morning quiz: January 1

Treasuries Move Back To The Upside

After moving notably lower over the course of the previous session, treasuries moved back to the upside during trading on Thursday.

Bond prices initially showed a lack of direction but moved higher as the day progressed. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.8 basis points to 1.515 percent.

The rebound by treasuries may partly have reflected bargain hunting after the weakness among bonds on Wednesday pushed the ten-year yield to its closing level in over a month.

Meanwhile, traders largely shrugged off a Labor Department report unexpectedly showing a modest drop in first-time claims for U.S. unemployment benefits in the week ended December 25th.

The report said initial jobless claims dipped to 198,000, a decrease of 8,000 from the previous week’s revised level of 206,000.

The slight pullback surprised economists, who had expected jobless claims to inch up to 208,000 from the 205,000 originally reported for the previous week.

A separate report from MNI Indicators growth in Chicago-area business activity picked back up in the month of December.

MNI Indicators said its Chicago business barometer rose to 63.1 in December from 61.8 in November, with a reading above 50 indicating growth. Economists had expected the business barometer to inch up to 62.0.

Most overseas markets will be closed on Friday, potentially leading to light trading activity on the day amid a lack of major U.S. economic data.

Rupee gains 12 paise to 74.30 against U.S. dollar in early trade

In the previous session, the rupee surged 29 paise to close at a more than one-month high of 74.42 against the U.S. dollar

The rupee appreciated by 12 paise to 74.30 against the U.S. dollar in opening trade on December 31, tracking gains in domestic equity markets.

At the interbank foreign exchange, the rupee opened strong at 74.35 against the American dollar, then inched higher to 74.30, registering a rise of 12 paise from the last close.

In the previous session, the rupee surged 29 paise to close at a more than one-month high of 74.42 against the U.S. dollar.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.05% higher at 96.01. Meanwhile, on the domestic equity market front, the 30-share Sensex was trading 446.07 points or 0.77% higher at 58,240.39, while the broader NSE Nifty advanced 143.40 points or 0.83% to 17,347.35.

Global oil benchmark Brent crude futures fell 0.39% to USD 79.22 per barrel.

Foreign institutional investors were net sellers in the capital market on December 30, as they offloaded shares worth ₹986.32 crore, as per exchange data.

Tesla Recalls Nearly 500K Cars To Fix Rear-View Mirror, Front-trunk Issues

Luxury electric car maker Tesla Inc. (TSLA) has recalled over 475,000 cars in the US to fix technical issues that can potentially increase the risk of accidents.

Tesla has recalled 356,309 vehicles to fix potential rear-view camera issues, which affects 2017-2020 Model 3s. The company will fix a cable that over time may separate after wear and tear, blocking the rear-view camera feed.

Another 119,009 Model S vehicles have been recalled due to issues with the front trunk. The company will fix the front-trunk latch that could result in the hood opening unexpectedly. This recall involves Model S vehicles manufactured between 2014-2021.

The recall nearly equals Tesla’s total global deliveries last year, as the company delivered nearly 500,000 cars in 2020, according to Tesla’s annual report.

In both cases, the reports state that “Tesla is not aware of any crashes, injuries, or deaths” relating to the faults.

The recalls come after the U.S. regulator started a safety investigation into the Tesla “Passenger Play” feature that allows Tesla users to play video games on the cars’ touchscreens when in motion. Tesla said last week that the feature would now only be available when a car is in park after the preliminary evaluation of the play feature was announced by NHTSA.

GST Council defers implementation of tax rate hike on textiles

Currently, tax rate on manmade fibre (MMF) is 18 per cent, MMF yarn 12 per cent, while fabrics are taxed at 5 per cent.

The GST Council on Friday decided to put on hold the decision to hike tax rate on textiles to 12 per cent after many states, including Tamil Nadu and West Bengal, opposed the move, an official said.

The 46th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state counterparts, decided to deliberate on the issue further in its next meeting.

Currently, tax rate on manmade fibre (MMF) is 18 per cent, MMF yarn 12 per cent, while fabrics are taxed at 5 per cent.

The Council in its previous meeting on September 17 had decided to correct the inverted duty structure in footwear and textile sectors.

With effect from January 1, 2022, all footwear, irrespective of prices, will attract GST at 12 per cent. It was also decided that 12 per cent uniform GST rate wold apply on textile products, except cotton, including readymade garments. States like Gujarat, West Bengal, Delhi, Rajasthan and Tamil Nadu have said they are not in favour of a hike in Goods and Services Tax (GST) rate on textiles to 12 per cent, from 5 per cent, with effect from January 1, 2022.

Amit Mitra, advisor to West Bengal Chief Minister, had earlier urged the Centre to roll back the proposed tax rate hike on textiles, saying this would lead to closure of around 1 lakh textile units and 15 lakh job losses.

Herald morning quiz: January 1

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