Business

Growth in the country’s services sector accelerated to an 11-month high in July, driven by strong international demand and sustained domestic sales, a survey showed on Tuesday (August 5, 2025).

The HSBC India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, inched up to 60.5 in July from 60.4 in June, confounding a preliminary estimate that showed a drop to 59.8.

PMI readings above 50.0 indicate growth in activity on a monthly basis, while those below point to a contraction. The latest reading showed the dominant services sector has been expanding for four years.

The new export business sub-index — a key gauge of international demand — showed a marked acceleration in July, registering the second-strongest expansion in a year.

Total new business remained robust despite easing slightly from June’s pace, supported by advertising efforts and new client acquisitions.

Among service categories, finance and insurance emerged as the top performer for both new orders and business activity, while real estate and business services recorded the slowest growth.

Despite robust demand firms significantly slowed the pace of hiring to a 15-month low.

Price pressures intensified in July as firms faced higher costs for food items, freight and labour. Service providers passed these increases on to customers, with the rate of charge inflation slightly exceeding input cost inflation.

Any acceleration in inflation could affect the Reserve Bank of India’s monetary policy decision-making. The central bank is expected to hold its repo rate steady at 5.50% at its August 4-6 meeting but cut its key policy rate once next quarter, according to a Reuters poll.

Business confidence improved as firms anticipated benefits from marketing initiatives, technological innovation and growing online presence.

The HSBC India Composite PMI Output Index, which includes manufacturing, edged up to 61.1 in July from 61.0 in June, indicating the strongest expansion since April 2024.

The rupee depreciated 29 paise to 87.95 against the U.S. dollar in early trade on Tuesday (August 5, 2025), a tad above the crucial 88/$ level, after U.S. President Donald Trump’s latest salvos targeting India.

Forex traders said the Indian rupee was under pressure and may continue to remain under pressure during this week after Mr. Trump said he may announce higher tariffs for India for continuing to buy Russian oil.

In a fresh trade threat against India, Mr. Trump on Monday (August 4, 2025) said he will “substantially” raise U.S. tariffs on New Delhi, accusing it of buying massive amounts of Russian oil and selling it for big profits.

On August 1, Mr. Trump signed an Executive Order titled ‘Further Modifying The Reciprocal Tariff Rates’, raising tariffs for over five dozen countries, including a steep 25% for India.

At the interbank foreign exchange market, the rupee opened on a weak note a tad above the sensitive 88 per U.S. dollar level at 87.95 against the American currency, registering a decline of 29 paise over its previous close.

On Monday (August 4, 2025), the rupee depreciated 48 paise to close at 87.66 against the U.S. dollar.

The rupee has touched a record intra-day low of 87.95 on February 10, 2025.

Last week, Mr. Trump mounted a sharp attack on India and Russia for their close ties and said the two countries can take their “dead economies down together”, a remark which prompted New Delhi to say that India is the world’s fastest-growing major economy.

Mr. Trump had earlier announced a 25% tariff on imports of Indian goods along with an unspecified “penalty” for buying the “vast majority” of Russian military equipment and crude oil.

Meanwhile, Brent crude prices fell 0.28% to $68.57 per barrel in futures trade, after OPEC+ agreed to hike another large output increase in September, adding to oversupply concerns after U.S. data showed lacklustre fuel demand.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose marginally 0.04% to 98.81.

“The dollar could from here go to a broader downtrend given U.S. policy-making uncertainty and an economy that is finally showing the cracks,” Mr. Bhansali said.

Meanwhile, investors remain cautious ahead of the RBI monetary policy decision this week.

The RBI Governor Sanjay Malhotra-headed rate-setting panel on Monday (August 4, 2025) started the three-day deliberations to decide the next bi-monthly monetary policy.

The six-member Monetary Policy Committee (MPC) is scheduled to announce the next bi-monthly policy rate on Wednesday (August 6, 2025).

In the domestic equity market, Sensex declined 200.40 points or 0.25% to 80,818.32, while Nifty fell 58.90 points or 0.24% to 24,663.80.

Foreign institutional investors (FIIs) offloaded equities worth ₹2,566.51 crore on a net basis on Monday (August 4, 2025), according to exchange data.

Equity benchmark indices Sensex and Nifty declined in initial trade on Tuesday (August 5, 2025), dragged down by selling in oil & gas shares and persistent foreign fund outflows.

Investor sentiment was further dampened after U.S. President Donald Trump threatened to impose higher tariffs on India over its purchases of Russian oil.

The 30-share BSE Sensex declined by 315.03 points or 0.39% to 80,703.69 in early trade. The 50-share NSE Nifty went lower by 41.80 points or 0.17% to 24,680.95.

Among the Sensex firms, BEL, HDFC Bank, Reliance Industries, ICICI Bank, Infosys, Hindustan Unilever, Adani Ports, Mahindra & Mahindra, Asian Paints, and Tata Steel were the major laggards.

Maruti, State Bank of India, HCL Technologies, Axis Bank, UltraTech Cement, Tata Motors, Titan, NTPC and Bajaj Finance were among the gainers.

“The latest tweet from Mr. Trump that ‘I will be substantially raising U.S. tariffs on India’ for buying Russian oil is a big threat. If he walks his talk, India-U.S. relations will further strain, and the impact on India’s exports to the U.S. can be worse than thought earlier.

“India’s GDP growth and corporate earnings in FY26 will also be impacted. The market, still trading at elevated valuations, has not discounted such an eventuality. It remains to be seen how things evolve. India’s response, with facts, that ‘Targeting India is unjustified and unreasonable’ sends a message that India will not be making undue concessions and compromises,” V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments, said.

This means the market is in uncharted territory in the near-term. If Mr. Trump raises tariffs in India further, the market will react negatively. Investors may wait and watch for the developments to unfold, he added.

In Asian markets, South Korea’s Kospi, Shanghai’s SSE Composite index, Hong Kong’s Hang Seng and Japan’s Nikkei 225 index were quoted in positive territory.

The U.S. markets ended higher on Monday (August 4, 2025).

Global oil benchmark Brent crude dipped 0.33% to $68.53 a barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹2,566.51 crore while Domestic Institutional Investors (DIIs) outnumbered the FIIs by purchasing equities worth ₹4,386.29 crore on Monday (August 4, 2025), according to exchange data.

On Monday (August 4, 2025), the 30-share Sensex gained 418.81 points to settle at 81,018.72, and the NSE Nifty jumped by 157.40 points to close at 24,722.75.

Indian Energy Exchange (IEX) on Tuesday (August 5, 2025) said it had achieved highest-ever monthly electricity traded volume of 12,664 million units (MU) in July, marking an increase of 25.5 per cent on a year-on-year basis.

A total of 16.26 lakh Renewable Energy Certificates (RECa) were traded during the month, an IEX statement said.

According to the statement, the market clearing price in the Day-Ahead Market was ₹4.18/unit during July, down 16 per cent year-on-year (YoY).

Similarly, price in the Real Time Market was at ₹3.83/unit during July this year, a fall of 23 per cent YoY.

The Day-Ahead Market (DAM) including HPDAM achieved 5,510 MU volume in July 2025, as compared to 5,056 MU volume in July 2024, an increase of 9 per cent YoY.

The Real-Time Electricity Market (RTM) reported the highest-ever monthly traded volume in July this year.

The RTM volume increased to 5,109 MU in July 2025, from 3,334 MU in July 2024, registering an increase of 53 per cent YoY.

Day-Ahead Contingency and Term-Ahead Market (TAM), comprising of HPTAM, contingency, daily & weekly and monthly contracts up to 3 months, traded 917 MU in July 2025, as compared to 714 MU volume in July 2024, an increase of 28 per cent YoY.

IEX Green Market, comprising the Green Day-Ahead and Green Term-Ahead Market segments, achieved 1,025 MU volume during July this year, as compared to 990 MU in July 2024, registering an increase of 4 per cent YoY.

The weighted average price in Green Day-Ahead Market (G-DAM) for July 2025 was ₹3.91/unit.

A total of 16.26 lakh RECs were traded in the trading sessions held on July 9, 2025 and July 30, 2025, at a clearing price of ₹360/REC.

REC traded volume in July this year decreased by 48 per cent on a YoY basis.

Non-banking financial company Tata Capital has filed updated draft papers for an Initial Public Offering (IPO) comprising up to 47.58 crore equity shares.

The proposed IPO is a combination of a fresh issuance of 21 crore equity shares as well as an Offer For Sale (OFS) of 26.58 crore shares, according to the updated Draft Red Herring Prospectus (DRHP) filed on Monday (August 4, 2025).

Under the OFS, Tata Sons will offload 23 crore shares, and the International Finance Corporation (IFC) will divest 3.58 crore shares.

The funds mobilised through the issue will be used for augmentation of the company’s Tier-1 capital base to meet future capital requirements, including onward lending. Tata Capital filed draft papers in April with the markets regulator Sebi for an IPO through a confidential pre-filing route and had received Sebi’s approval in July. Following this, companies are required to file an updated DRHP before filing an RHP.

Sources had told PTI that the IPO size could be $2 billion, valuing the company at around $11 billion.

If successful, this IPO will be the largest initial share sale in the country’s financial sector. It will also mark Tata Group’s second public market debut in recent years, following the listing of Tata Technologies in November 2023.

This move is part of the company’s efforts to comply with the Reserve Bank of India’s (RBI’s) listing requirements.

As per the RBI mandate, upper-layer NBFCs are required to list on the stock exchange within three years of being designated as such. Tata Capital was categorised as an upper-layer NBFC in September 2022. For the financial year 2024-25, Tata Group’s financial services firm reported a PAT of Rs 3,655 crore as compared to ₹3,327 crore in FY24, and revenues surged to ₹28,313 crore from ₹18,175 crore. The issue is being managed by a consortium of book-running lead managers, including Axis Capital, Kotak Mahindra Capital Company, BNP Paribas, HDFC Bank, HSBC Securities and Capital Markets (India) Pvt Ltd, Citigroup Global Markets India Pvt Ltd, ICICI Securities, IIFL Capital Services, SBI Capital Markets, and JP Morgan India.

IndusInd Bank on Monday (August 4, 2025) announced the appointment of Rajiv Anand, former Deputy Managing Director of Axis Bank, as its new MD and CEO.

The board, basis approval of the Reserve Bank of India (RBI), have at its meeting held on August 4 approved the appointment of Rajiv Anand as ‘Additional Director’ in the category of Managing Director and CEO and Key Managerial Personnel of the bank for three years, IndusInd Bank said in a late evening regulatory filing.

The appointment is effective from August 25, 2025, up to August 24, 2028, subject to the approval of the shareholders of the bank, it said.

He would assume charge at a time when the bank is reeling under a slew of issues stemming from alleged irregularities of the top management in recognising bad loans and trading reverses.

Mr. Anand retired as deputy managing director of Axis Bank on August 3 upon completion of his third term as a director on the bank’s board.

He joined Axis Asset Management Co. Ltd. in 2009 as its founding MD and CEO. In his next assignment, he was appointed president of retail banking at Axis Bank. Subsequently, he was inducted into the board of the Axis Bank and took over as the head of wholesale banking.

Last month, the RBI extended the tenure of the committee of executives of the bank for one month as IndusInd Bank expected the regulator’s clearance for its new MD and CEO by that time.

The situation arose following the resignation of MD and CEO Sumant Kathpalia in the wake of accounting lapses costing ₹1,960 crore to the lender in the 2024-25 fiscal year.

The private sector lender in March reported the accounting lapses in the derivative portfolio, estimated to have an adverse impact of approximately 2.35 per cent of the bank’s net worth as of December 2024.

The original tenure of the Committee of Executives constituted on April 29 was till July 28, 2025.

 IndusInd Bank gains after naming Rajiv Anand as CEO

 IndusInd Bank climbed 2.3% on Tuesday (August 5, 2025), a day after the lender named industry veteran Rajiv Anand as its chief executive for a three-year term.

The stock was the top gainer on the Nifty Bank and Nifty Private Bank indexes, which were trading 0.1% lower each.

It also gained the most on the benchmark Nifty 50, which was trading flat.

Tesla announced an “interim” compensation award worth about $29 billion for Elon Musk on Monday, asserting the need to retain the controversial CEO at a moment of fierce competition for top talent.

The electric vehicle maker said in a statement it will award a distribution of 96 million Tesla shares to Musk as it “intends to compensate its CEO for his future services commensurate with his contributions to our company and shareholders.”

The award comes as Tesla challenges a Delaware court ruling that struck down a 2018 package of about $55.8 billion. With that appeal dragging out, Monday’s announcement marks an interim step while the company develops a “longer-term CEO compensation strategy,” Tesla said in a letter to shareholders.

“We have recommended this award as a first step, ‘good faith’ payment,” said the letter. “Retaining Elon is more important than ever before.”

The move comes amid a fierce battle for top engineering talent as companies like Google and Meta compete for leadership on artificial intelligence.

The Tesla letter, signed by Tesla board members Robyn Denholm and Kathleen Wilson-Thompson, described Musk as a “magnet for hiring and retaining talent at Tesla,” noting that Tesla is transitioning from its electric vehicle focus “to grow towards becoming a leader in AI, robotics and related services.”

Musk is viewed within the business world as a unique talent after his success with building Tesla and SpaceX into major global companies.

But his stewardship at Tesla has come under scrutiny in the last year as car sales and profits have tumbled.

This trend has been partly due to Musk’s support for far-right political causes, but also is related to a sluggish rollout of new auto models after the polarising Cybertruck sold poorly.

In a July 23 Tesla earnings call, Musk warned of more potentially “rough” quarters ahead before the company’s robotics and AI ventures pay off.

On the call, Musk reiterated his concern about the current framework in which he holds about 13% of Tesla shares prior to Monday’s award.

“As I’ve mentioned before, I think my control over Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can’t be thrown out if I go crazy,” Musk said.

Tesla’s statement did not explicitly mention Musk’s foray into politics, which has sparked consumer boycotts and vandalism. But the letter by Denholm and Wilson-Thompson alluded to concerns that Musk’s attention had drifted from the company, calling the interim package a step towards “keeping Elon’s energies focused on Tesla.”

The massive pay package comes eight months after the judge in a Delaware court rejected Musk’s even larger compensation at Tesla, denying an attempt to restore the pay deal through a shareholder vote.

Musk would be required to forfeit the new compensation package should the appeals court rule in his favor and grant him the full 2018 compensation, which at the time was valued at $55.8 billion.

The new payout is sure to fuel concerns about the compensation for Musk, already the world’s richest man, and whether the Tesla board is placing a sufficient check on the company’s chief executive.

Tesla shares rose 2.4% Monday in early trading.

Palantir Technologies on Monday raised its forecast for annual revenue for the second time this year, expecting robust demand for its artificial intelligence-linked services from businesses and governments.

The data analytics and defense software firm projected revenue in the range of $4.14 billion to $4.15 billion for 2025, up from its earlier forecast of between $3.89 billion and $3.90 billion.

The raised forecast is also above analysts’ average estimate of $3.90 billion, according to data compiled by LSEG.

Palantir, which was initially backed by the CIA, has capitalised on its expertise in managing and analysing data to help train and run new AI apps using its platforms.

Its shares have more than doubled in value this year, far outpacing the 6% gain for the benchmark S&P 500, as investors bet on its ability to benefit from the proliferation of AI technology and government spending on defense tech.

Palantir, co-founded by tech billionaire Peter Thiel, said it now expects revenue derived from U.S. businesses to come in above $1.30 billion, up from its earlier guidance of more than $1.18 billion.

They nearly doubled to $306 million in the June quarter. The business is closely watched as the company works to cut its reliance on government contracts.

Sales to the U.S. government jumped 53% to $426 million, representing more than 42% of total second-quarter revenue of about $1 billion, which beat estimates.

Last week, the U.S. Army said it might purchase services of up to $10 billion from Palantir over a decade.

Palantir also forecast third-quarter sales above estimates.

The company’s second-quarter adjusted earnings of 16 cents per share beat estimates of 14 cents.

Fitch is downgrading U.S. chipmaker Intel’s credit rating by one notch on Monday, according to a note by the ratings agency, which assigned a negative outlook to Intel’s rating. Fitch downgraded Intel to BBB from BBB-plus, placing it just two notches shy of junk credit status.

The downgrade follows Fitch’s assessment that Santa Clara, California-headquartered Intel faces heightened challenges maintaining demand for its products. Fitch cited growing competition from peers such as Dutch rival NXP Semiconductors , Broadcom Inc and Advanced Micro Devices .

“Credit metrics remain weak and will require both stronger end markets and successful product ramps, along with net debt reduction over the next 12-14 months” for Intel to recover its recent ratings, Fitch analysts wrote on Monday.

Fitch added that while Intel holds a better market position than other similarly rated peers, its financial structure is relatively weaker and it faces “higher execution risk.”

Intel still enjoys a strong market position in the provision of PCs and traditional enterprise servers, Fitch noted, while warning the company faces heightened PC competition from Qualcomm and AMD.

Intel will need to ramp up its PC shipments while also reducing its balance sheet debt to recover its previous credit ratings, Fitch said.

The ratings agency called Intel’s liquidity profile “solid,” which as of June 28 consisted of a $21.2 billion mix of cash, cash equivalents and short-term investments, as well as an untapped $7 billion credit revolver. It also had an undrawn $5 billion, 364-day revolver that will come due in January 2026, Fitch said.

Fellow ratings agency S&P Global similarly downgraded Intel’s credit rating to BBB from BBB-plus in December, while Moody’s Ratings downgraded its senior unsecured debt’s rating in August last year.