India’s stock markets witness strong rebound on positive global cues
Indian equities surged on positive cues that included a strong recovery in Chinese tech stocks, progress in Russia-Ukraine peace talks, and a decline in global crude oil prices. The benchmark Sensex gained 1.86 percent to close at 56,817 points. The Nifty rose 1.87 percent.
Why it’s important: The stock markets had plunged steeply after Russia invaded Ukraine. It has now recouped most of its losses, providing a bonanza to bargain hunters. The recovery, however, is still fragile and the markets are expected to remain volatile.
Future Retail will try to reverse store takeover by Reliance Industries
Future Retail has said it was committed to taking action to seek value adjustments and reversing the takeover of its stores by Reliance Industries, even as Amazon alleged that Future Retail colluded with Reliance to willingly surrender store leases, violating a court injunction against the transfer of the prized assets.
Why it’s important: The long legal tussle between Future and Amazon took an unexpected turn when Reliance started staking over Future Retail’s stores on nonpayment of rent. Reliance’s $3.4 billion proposed purchase of Future’s assets is now a fait accompli. It remains to be seen whether this holds up in courts and tribunals.
India most likely to import 2 million tonnes of cheap Russian oil
India may take advantage of a Russian offer to sell its crude oil cheaply and bear the cost of insurance and transportation. The country could import as much as 2 million tons, or about 15 million barrels of crude oil, from Russia that is facing a financial crunch due to Western sanctions. The development comes after reports that Indian Oil Corporation) bought 3 million barrels of Russian crude for May delivery.
Why it’s important: The surging price of crude oil after war began in eastern Europe was worrying for India as higher retail prices will lead to increased inflation that could come in the way of a incipient economic recovery. Crude prices have eased since then and the Russian deal might make the Indian oil basket even cheaper, leading to a lower quantum of increase in pump prices.
Highway construction takes a blow due to longer monsoon, pandemic
India’s highway construction has slowed down to a four-year low of around 30km a day in the current financial year the targeted 40km because of pandemic disruptions and a longer rainy season. The central government is now expected to complete building about 11,000km of roads in the year to March, instead of its target of 12,000km.
Why it’s important: Since the coronavirus pandemic started, the Indian government has been boosting capital spending to strengthen infrastructure that it believes will provide a boost to economic activity hampered by the virus outbreak. Building roads swiftly is a large component of that plan.
Aviation recovery may hit air pocket on record in jet fuel prices
Even as regular international flight resume, airline firms received a price shock as there was record hike in jet fuel prices. In New Delhi, aviation turbine fuel price rose a record 18.3 percent to about Rs 110 per liter, crossing the Rs 100 mark for the first time. Prices in Kolkata, Mumbai and Chennai rose even higher on local levies. It was the sixth hike in 2022 and the second this month.
Why it’s important: The price of fuel constitutes around 30-40 percent of the cost of operating an airline in India. The price rise will contract profit margins, but the carriers are unlikely to pass on the cost to passengers, hoping that the pricing pressure will soon ease.
Indian billionaires became richer by $159 billion in 2021
Mukesh Ambani, India’s richest man, has posted a 24 percent rise in his wealth to $103 billion, retaining the wealthiest Asian title for the second straight year, according to the 2022 M3M Hurun Global Rich List. A 153 percent increase in wealth had made Gautam Adani the second-richest Asian. Adani was the biggest gainer in the world in 2021 by adding $49 billion to his wealth, or about Rs 6,000 crore every week.
Why it’s important: The gain in wealth by the superrich in India shines a spotlight on wealth inequality in the country that is still home to the largest number of poor people in the world. The pandemic has dealt a blow to the earnings of the middle class and the poor, but the rich have become richer.
Compact SUVs to take pole position, beat premium hatchbacks in 2021-22
Compact SUVs are expected to overtake premium small cars to become the top-selling segment in the Indian passenger vehicle market in the financial year ending March. More than one in every two passenger vehicles sold in the country now is a utility car, driven by a strong demand for SUVs.
Why it’s important: Hatchbacks have been consumer favorites for many years in India. But the launch of SUV models priced below Rs 10 lakh in the past few years, availability of easy finance and supply chain disruptions that affected production of hatchbacks more have translated into higher sales for compact SUVs.
Banks, corporate treasuries express interest in LIC IPO
Indian banks and corporate treasuries have approached the government to participate in the initial public offering of Life Insurance Corporation of India, indicating keen interest for the country’s largest listing on the stock markets.
Why it’s important: Although the IPO of the country’s largest insurance firm is likely to see a delay due to geopolitical tensions, the interest shown by local lenders and corporate treasuries at the road shows augers well for the government that is seeking to sell 5 percent of its stake to raise around Rs 750 billion.
India’s proposal to waive IP rights on COVID-19 vaccines sees strong support
The US, European Union, India, and South Africa have reached a consensus on key elements of a long-sought intellectual property waiver for Covid-19 vaccines. There’s now a tentative agreement among the four World Trade Organization members that still needs formal approval from 164 member nations.
Why it’s important: The move has been opposed by nations such as Switzerland and Britain that have large pharma sectors. If approved by the WTO, it would likely see a surge in revenues for Indian vaccine makers that have large capacities.
Travel and hospitality industry urges government to roll out stimulus
The tourism, travel, and hospitality industry associations have once again requested the central government to roll out liquidity and other support measures after the government admitted in the Lok Sabha that about 21. 5 million jobs were lost in the tourism sector due to the Covid-19 pandemic.
Why it’s important: A stimulus package for the sector will be important as companies have seen plummeting business due to the pandemic. Without government support, the employer of large numbers of people will take at least a couple of years to recover.
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