Indian equities post highest gain in three months at 2.54 percent
India’s benchmark indices posted the second biggest gain of the year amid positive momentum in global markets. The benchmark Sensex soared 2.54 percent, to 54,318 points, and Nifty surged 2.63 percent to 16,259 points. It was the biggest single-day gain since February 15.
Why it’s important: Investor sentiment was seen improving after China relaxed lockdowns. The rally is likely to be short-lived, as high inflation, steep crude oil prices and a weak rupee have stressed corporate earnings.
LIC shares tumble 8.6 percent on disappointing market debut
Shares of state-run Life Insurance Corporation of India fell 8.62 percent on listing although investors have bid for nearly three times the shares on offer in India’s largest IPO that saw the government netting Rs 210 billion. It debuted at Rs 867.20, a discount to its IPO allotment price of Rs 949. LIC is valued at around Rs 5.54 trillion, making it the country’s fifth-most valuable company by market capitalization.
Why it’s important: Weak investor sentiment and market volatility in the recent past took a toll on the listing of the insurance giant. However, the long-term outlook remains positive.
Wholesale inflation soars to 15.08 percent in April, highest in nine years
Wholesale price-based inflation rose to its highest level in at least nine years to 15.08 percent in April from 14.5 percent in March. The Wholesale Price Index has now stayed in double digits for over a year, and the April figure is the highest in the current data series with the base year of 2011-12.
Why it’s important: Rising prices of food and commodities are driving wholesale inflation, strengthening the case for sharper interest rate hikes by the Reserve Bank at the monetary policy review in June. It is likely to remain high for the next few months.
Elon Musk puts Twitter deal on hold on fake accounts concerns
Elon Musk, the world’s richest man, has said the $ 44 billion purchase of Twitter can’t move forward until the social media company provides more clarity on how many of its accounts are fake, casting doubt on his planned takeover of the platform.
Why it’s important: There are now questions on whether Musk, known for his maverick and bombastic ways, is serious about buying Twitter, as he fights the company’s top management in public. Twitter has refuted his allegations.
NSE approaches market regulator to settle 2021 glitch incident
The National Stock Exchange has approached the capital markets regulator, requesting it to settle a probe into a technical glitch last year that halted trading for some four hours. It has filed a consent application with the Securities and Exchange Board of India to resolve the issue.
Why it’s important: The incident on February 24 last year stopped trading in equities and derivatives. An entity facing investigation into alleged security market violations can settle a case with SEBI through a consent application by paying a fee, without admitting wrongdoing.
Weak rupee spells more trouble for consumer durables firms
As the rupee continues to slide against the dollar, it has added to the troubles of consumer durables companies, which are left with little choice but to hike prices yet again. The sector has already taken around five to six price hikes since 2021.
Why it’s important: High commodity costs, pandemic lockdowns in China, and a depreciating rupee that pushes up the cost of imported components are leading to higher prices of consumer durables. This might lead to a vicious cycle as higher prices can destroy demand.
High market volatility lowers IPO valuations, fundraising plans
Volatile stock markets and an exodus of foreign investors are beginning to shake the primary markets as well, as several companies preparing to sell shares to the public lower their fundraising targets and market valuations.
Why it’s important: The volatile conditions do not augur well for initial public offerings, and the primary market may see a brief pause in activity. Initial share sales worth more than Rs 1 trillion have been filed with the market regulator, which might have to wait longer for a more suitable window.
Investigation in Axis Mutual Fund frontrunning case unearths details
Two suspended fund managers of Axis Mutual Fund allegedly shared confidential information about the asset manager’s trades with brokers in Gujarat in return for bribes, according to new details discovered by an investigation by the Securities and Exchange Board of India.
Why it’s important: Frontrunning, or the practice of trading in securities ahead of large client orders, is a serious securities market offence. It erodes trust and could lead to losses or inferior prices for customers.
Airtel’s net profit surges to Rs 20 billion in fiscal fourth quarter
Bharti Airtel posted a net profit of Rs 20.08 billion for the quarter ended March, a 164 percent annualized growth. Profit jumped 142 percent from Rs 8.29 billion in the three months to December 2021. The telecom operator recorded a 22.3 percent growth year-on-year in consolidated revenue to Rs 315 billion for the March quarter, while revenue from its India business rose 22.7 percent to Rs 225 billion.
Why it’s important: India’s second largest telecom operator is benefitting from the tariff hikes announced last year. It is also reaping better results because the number of 4G customers crossed 200 million, resulting in higher revenues.
Inflation risk is getting accentuated: Reserve Bank article
Inflation risks have become more accentuated in recent months at a time the economy is consolidating its recovery, with most sectors exceeding pre-pandemic levels of activity, according to an article published in the bulletin of the Reserve Bank of India.
Why it’s important: Emerging economies face risks of capital outflows and higher commodity prices feeding into inflation. India faces challenges in rebuilding from pandemic disruptions. The views expressed in the article were those of the authors and did not necessarily represent those of the central bank.
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