Information Technology To Lead The Pack
India’s headline inflation rate based on the Consumer Price Index (CPI) jumped to 6.01 per cent in January 2022 from 5.66 per cent in December 2021.
Indian frontline equity indices Nifty 50 and Sensex ended the fortnight in the green territory with marginal gains of 0.36 per cent and 0.37 per cent, respectively. The markets witnessed high volatility over the last two weeks on account of geopolitical tensions between Russia and Ukraine, weak cues from the US Federal Reserve and rising inflation concerns. BSE Mid-Cap and Small-Cap indices bore the brunt of heavy FII selling – clos- ing the fortnight with losses of 2.87 per cent and 5.87 per cent, respectively. As per data released by the National Statistical Office, India’s headline inflation rate based on the Consumer Price Index (CPI) jumped to 6.01 per cent in January 2022 from 5.66 per cent in December 2021. At 6.01 per cent, last month’s CPI inflation reading is the highest in seven months.
India’s wholesale price inflation rate eased in January but remained in double digits for the tenth consecutive month amid rising crude oil prices. Data released shows that the Wholesale Price Index (WPI)-based inflation rate eased to 12.96 per cent in January 2022 from 13.56 per cent in the previous month. During January, while inflation for manufactured items decelerated to 9.42 per cent, food inflation rate accelerated to double digits at 10.33 per cent, mostly due to an unfavourable base. BSE IT index slipped by 0.97 per cent over the fortnight, while FMCG and Oil & Gas indices also fell ~1.38 per cent each.
According a recent report by NASS- COM, India’s IT sector is set to grow at 15.5 per cent – the fastest in over a decade to USD 227 billion in FY22 as the pandemic pushes up demand for digitization at companies across the world. Quoting an excerpt from the report, “From a revenue pie perspective, exports are set to grow 17.2 per cent to USD 178 billion in FY22 or half of the overall service exports, while the domestic market will grow 10 per cent to USD 49 billion. E-commerce revenues will touch USD 79 billion in FY22 from the year-ago period’s USD 57 billion.” Over the fortnight it was announced that Anil Agarwal-led Vedanta and Hon Hai Technology Group (i.e. Foxconn) have formed a joint venture (JV) to manufac- ture semiconductors in India.
This is the first JV in the electronics manufacturing space post the PLI scheme. BSE Realty and Power indices were among the top losers, plunging 4.01 per cent and 3.01 per cent, respectively. Reliance Jio once again eclipsed Bharti Airtel to add the most regularly paying users in December even as its gross subscriber base shrunk as tariff hikes kicked in. Jio continues to remain India’s biggest carrier by active customers for the sixth straight month. As per data released by the Telecom Regulatory Authority of India (TRAI), Jio added 47.2 lakh active subscribers in Decem- ber compared with its one-year average monthly addition of 29 lakhs.
Bharti Airtel and Reliance Jio’s active subscriber base grew 0.23 per cent and 1.31 per cent, respectively, over the preceding month, while Vodafone Idea’s subscriber base fell 0.91 per cent. Despite retail inflation rising to 6.01 per cent in January and likely to remain elevated in the forthcoming months, Swiss brokerage firm UBS Securities India expects the Reserve Bank of India (RBI) to leave key policy rates un- changed throughout the first half of this year. The brokerage firm sees the policy to change only from the second half wherein the Monetary Policy Commit- tee (MPC) may deliver a 50 basis points hike in the second half starting from the August 2022 policy. Trading data shows that during the fortnight FIIs were net sellers to the tune of Rs17,857.29 crore, while DIIs were net buyers to the tune of Rs 14,154.40 crore.
