There are few signs inflation is easing. New figures show wholesale inflation in India surged to a 13-month high in August. The wholesale price index jumped 9.78% during the month. In July it gained 9.22%. The numbers come just two days after the announcement of industrial output numbers for July. Those numbers were the worst in nearly two years. What’s more, RBI is scheduled to meet on Friday to consider a fresh hike in policy rates. It has already raised rates 11 times since March of last year, but has achieved little by way of controlling inflation.
And while inflation surges, the Indian rupee has plunged. The currency tumbled to a low of roughly two-years against the American dollar. On Wednesday the rupee fell to Rs48.02 to the dollar. The currency has been falling for eight trading days in a row. The rupee has weakened thanks to a flurry of dollar-buying and foreign investors exiting cutting down their exposure to Indian markets.
Switching to corporate, Maruti’s labour troubles in Manesar have now spread to Suzuki’s other subsidiaries in the area. Workers at Suzuki Motorcycles, Suzuki Castings and Suzuki Power-train have all been on strike since Wednesday afternoon. They’re likely to be joined by workers from Maruti’s Gurgaon plant on Thursday. That’s a total of about 7,000 employees. The strike appears to be in reaction to Maruti’s decision to fire 57 workers at it Manesar plant on Wednesday. Workers are also unhappy about Maruti’s decision to staff the Manesar factory with temporary workers in their absence.
Indian markets rebounded on Wednesday, after making losses in the last three sessions. The gains came after hopes of a respite from rate hikes and more export opportunities thanks to the weakened rupee. The Sensex leapt up 242 points to finish at 16,710. And the Nifty gained 72 to 5,013.