Domestic Indices Yet To Gather Steam
Bharti Airtel recently announced that Google (i.e. Alphabet Inc.) will invest up to USD 1 billion in the telecom major as part of the company’s India Digitisation Fund.
Indian frontline equity indices Nifty 50 and Sensex fell 1.97 per cent and 3.10 per cent, respectively, during the fortnight on account of heavy selling by FIIs, soaring crude oil prices and inflation concerns. BSE Mid-Cap and Small-Cap indices underperformed the headline benchmark indices by plummeting 4.02 per cent and 3.55 per cent, respectively. According to the National Statistical Office’s first revised estimate released on January 31, 2022, India’s Gross Domestic Product (GDP) contracted by 6.6 per cent in FY21. The revised estimate compares favourably with the provisional estimate of a 7.3 per cent contraction, released in May 2021.
A big chunk of the upward revision for the GDP in FY21 seems to have come from the manufacturing sector, which was earlier estimated to have contracted by 7.2 per cent in FY21. However, as per the first revised estimate, the manufacturing sector contracted by a mere 0.6 per cent last year. The first revised estimate for FY21 also impacts the GDP growth estimate for FY22. As per the National Statistical Office’s first advance estimate, India’s GDP was seen growing 9.2 per cent in FY22. However, the first revised estimate for FY21 implies a real GDP growth rate of 8.8 per cent for the current financial year.
The implied nominal GDP growth rate for FY22 is now 17.2 percent as against the first advance estimate of 17.6 per cent. Bharti Airtel recently announced that Google (i.e. Alphabet Inc.) will invest up to USD 1 billion in the telecom major as part of the company’s India Digitisation Fund. The deal includes Google investing USD 700 million to acquire 1.28 per cent ownership in Airtel and up to USD 300 million towards potential multi-year commercial agreements. Over the fortnight, BSE Realty and BSE IT indices plunged 6.93 per cent and 5.36 per cent, respectively, becoming the top losers of the pack. BSE Auto index also corrected by 1.49 per cent during the fortnight. A majority of automakers recorded growth in wholesale dispatches on a month-on-month basis in January 2022.
The country’s largest carmaker, Maruti Suzuki reported a 7 per cent drop in its domestic passenger vehicle dispatches to the dealers. Total domestic sales for Maruti Suzuki stood at 1,32,461 units in January 2022 as against 1,42,604 units in the same period last year. According to the company, the shortage of electronic components had a minor impact on the production of vehicles which are primarily sold in the domestic market and the company took all possible measures to minimise the impact.
According to credit ratings agency ICRA,the domestic two-wheeler sales witnessed 21 per cent year-on-year decline in January even as the segment registered a 14 per cent sequential growth in domestic wholesale volumes.
The low sales volume during January underlines the unfavourable impact of price hikes, rising fuel costs, weekend lockdowns and Omicron-related concerns on consumer sentiment. As per the Ministry of Finance, GST collection in January crossed ₹ 1.38 trillion in January, reporting a growth of 15 per cent over the year-ago period on pickup in economic activity and anti-evasion measures. January is the fourth month when Goods and Services Tax (GST) collection has crossed the ₹ 1.3 trillion mark and the seventh month in a row when it crossed the ₹ 1 trillion mark.Trading data shows that during the fortnight FIIs were net sellers to the tune of ₹ 37,681.84 crore, while DIIs were net buyers to the tune of ₹ 17,793.73 crore.
