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IIP contracts, inflation rises and Parliament session ends

1. Retail inflation picks up

Prices rose at their fastest pace in months, up 3.81% in March compared to the same month last year. The March 2017 figures released on Wednesday showed an increase on the back of higher fuel prices. This is the highest rise since October 2016, when inflation was 4.2%. Rising inflation is likely to weigh on the Reserve Bank of India’s interest rate stance. A Mint report quoted Crisil chief economist D.K. Joshi that there are upside risks to inflation, although it currently lies within acceptable limits. Interestingly, rural and urban inflation figures have converged, mostly on the back of higher food and beverage prices.

2. IIP contracts

The Index of Industrial Production (IIP) showed a contract for the first time in the calendar year. It was down 1.2%, according to February data released on Wednesday. This is also its lowest figure since October 2016, when IIP came in contracted 1.9%. The fall was on the back of a decline in the manufacturing segment. It accounts for over three-fourth of the index. There has also been lower offtake in capital and consumer goods. Manufacturing output is down two percent.

3. Infosys disappoints

Infosys Ltd reported lack-lustre results on Thursday. It showed a 0.7% sequential rise in March quarter dollar revenues, and a 0.9% sequential decline in rupee revenues. It had a revenue of Rs17,120 crore. Its net profit was down 2.8% to Rs3,603 crore. The company also named Ravi Venkatesan as co-chairman of the company. It said that it would payout Rs13,000 crore from its cash holdings to shareholders through dividends or buybacks. The company’s promoters and other shareholders have been pushing for greater payouts. Founder Narayana Murthy had also asked for Venkatesan’s appointment as part of his list of demands when hostilities between the old promoters and the board and management were at its height in February.

4. Lower fiscal deficit plan for the government

The N.K. Singh panel has suggested that India aim for a lower fiscal deficit trajectory. It said that should look to get its fiscal deficit of to 2.5% of Gross Domestic Product (GDP) by 2022-23. The report had been submitted to Parliament on 1 February. The finance ministry made it public on Wednesday. The central government currently has a fiscal deficit of 3.5%, according to 2016-17 figures. It aims to end the current financial year with a fiscal deficit of 3.2%. Lower deficits would have a positive currency impact and improve the country’s credit rating, according to Angel Broking.

5. Supreme court blow for Tata, Adani

The country’s apex court dealt a major blow to both Tata Power Co. Ltd and Adani Power Ltd on Tuesday. It overturned a tribunal ruling that allowed the power companies to charge consumers more because of an increase in coal prices. Adani Power dropped 16% to Rs37.2. Tata Power was down 1.95% to Rs85.4. Adani was more affected because it has to write off gains that it had booked anticipating a favourable judgment. The tribunal had passed its order in 2016.

6. Parliament session ends

The second half of the Parliament’s budget session ended on Wednesday. The government managed to push through key reforms including the goods and services tax (GST). Other legislation includes The Mental Health Care Bill, 2013, The Enemy Property (Amendment and Validation) Bill, 2016, The Payment of Wages (Amendment) Bill, 2017 and The Maternity Benefits (Amendment) Bill, 2016. The session began on 31 January. It was held in two parts, with a one-month gap between the two sessions.

7. Flipkart gets funding

Tencent Holdings Ltd, eBay Inc. and Microsoft Corp together announced $1.4 billion in funding for Flipkart. Monday’s announcement values the country’s largest retailer at $11.6 billion. This is lower than its peak valuation of $15 billion. The additional capital will help Flipkart to compete with Amazon. Flipkart will also takeover eBay’s India business as part of the deal.

8. LIC books profits

Government owned Life Insurance Corp. of India (LIC) almost doubled the profits it booked in the 2016-17, compared to the previous year. Mint reported on Wednesday that profit-booked was up from Rs11,000 crore to Rs21,000 crore. The BSE bellwether index, the Sensex, was up 16.9% during the financial year. It gained 11.24% in the March quarter. The insurer has continued its policy of selling during rising markets, according to people familiar with the matter mentioned in the story. The insurer is said to follow a contrarian approach, buying during falling markets, and selling when markets rise. It is one of the largest investors in the market. LIC has total assets worth Rs24.5 trillion. It has at least 250 million policy-holders.

9. India’s Davis Cup foray

India will face Canada in the Davis Cup in September. The draw was announced on Tuesday. The Davis Cup this year marked the first time that veteran Leander Paes was dropped. He has been part of the Indian team for 27 years. The decision to drop him against Uzbekistan attracted some controversy. Rohan Bopanna was his replacement in the team. India won against 27th ranked Uzbekistan and will play the higher–ranked Canada in September. Canada is ranked 16th, while India is ranked 18th.

10. United Airlines passenger battered

United Airlines passenger Dr David Dao was forced to get off an overbooked United Airlines plane on Sunday. A video of his bloody injuries as he was forced off the plane caused a controversy which has invited calls for boycotting the airline. The US department of transportation has launched an inquiry into the matter. United chief executive officer Oscar Munoz issued an apology on Tuesday. Meanwhile, the stock has been in decline, losing over $400 million in market cap over Tuesday and Wednesday.

Graphics by Prajakta Patil/Mint.

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