India’s CPI inflation for Feb-22 came in higher than expected at 6.07%
India’s CPI inflation for Feb-22 came in higher than expected at 6.07% even as the WPI inflation also was much higher than anticipated at 13.11% for Feb-22. It was largely an outcome of the surge in crude prices and its downstream effect. In fact, wholesale inflation has been in double digits for the 11th month in succession. Clothing, footwear and fuel drove up CPI inflation even as food inflation was marginally lower. The pressure came from fuel inflation and manufacturing inflation, reflecting sharp input cost pressures.
Tata Group announced the name of N Chandrasekaran as the chairman of Air India
Tata Group announced the name of N Chandrasekaran as the chairman of Air India. This was after Turkey’s Ilker Ayci declined the position of chief executive of Air India. Chandra is already the chairman of Tata Sons and Air India will include a lot more of executive responsibilities. Chandra has been a 30 year veteran of the Tata group, including the CEO of TCS till 2017. Interestingly, Chandrasekaran is the first non-Parsi professional executive to head Tata Sons. The market cap of Tata group has grown smartly under Chandra.
RBI had banned Paytm Payments Bank from taking on fresh accounts
It looks like the problems are just not ceasing for Paytm. Just a couple of days back, the RBI had banned Paytm Payments Bank from taking on fresh accounts till the RBI completed a total audit of its IT and systems. While the road rage incident may be dismissed as a one-off, a more serious charge has emerged about leaks of key information to Chinese companies. While Paytm has denied these allegations, the damage was visible in the price as the stock lost 13% to Rs.680. Paytm is down 68.5% from its listing price.
India will buy crude oil and other commodities from Russia
India will buy crude oil and other commodities from Russia at discount once rupee-rouble transactions are enabled. This is due to sanctions imposed on Russia by the West over its aggression in Ukraine. India currently relies on Russia for about 2-3% of crude, but may increase it if they get a good price. Currently, Russia is offering oil and other commodities at heavy discounts. Global traders have been avoiding Russian oil to dodge sanctions. With SWIFT restrictions, India will first need a rupee-rouble mechanism in place.
FPI selling in 2021-22 has been worse than the selling in 2008
It is evident that FPI selling in 2021-22 has been worse than the selling in 2008. While FPIs sold $28 billion during the 2008 global financial crisis, they have already sold $36 billion since this global sell-off started in Apr-21. FPIs have been cautious about India for some time overvaluation concerns, high input inflation and the possibility of aggressive rate hikes by the US Federal Reserve. Things went awry after Russia attacked Ukraine last month and added to geopolitical risk. Nifty impact has been much smaller in 2022.