Data recap: Sensex, inflation, funding winter

The Sensex closed above 70,000 for the first time on Thursday, taking 551 days to add the last 10,000 points, while inflation rose to a three-month high. Meanwhile, funding slowdown continued for India's tech start-ups, falling to a five-year low.

Sensex soars

The Sensex hit the 70,000 milestone on the back of foreign institutional inflows. The benchmark index took 551 days to go from 60,000 to 70,000, much longer than the 158 days it took to go from 50,000 to 60,000.

Nevertheless, the revival of foreign inflows after two months lifted sentiment, experts said. While the market could take a breather, the outlook remains positive on strong growth and peaking interest rates.

Cautious approach

Even as the Reserve Bank of India (RBI) has left the policy repo rate unchanged since February, market expectations have created some dissonance with the central bank.

The overnight index swap (OIS) rate, a remarkably good predictor of interest rates, rose during June-September, possibly spooked by the spike in inflation, an analysis by Plain Facts showed.

OIS rates have declined since then but remain significantly higher than RBI’s terminal repo rate of 6.5%. This shows markets are cautiously hopeful, but are not expecting a quick rate cut.

EV bets

₹800 crore: That’s what Hindalco Industries will invest to set up a new plant near Sambalpur in Odisha to manufacture fine-quality aluminium foil used in rechargeable batteries, Mint reported. The aluminium flagship of the Aditya Birla Group is expected to commission the plant by 2025.

High-performance aluminium foils are used by cell makers as a current collector for cathode materials. The company will initially produce 25,000 tonnes of the product.

Climate conscious

While world leaders tussle over ways to control climate damage, its effects are being felt far and wide. Most Indians acknowledge the dangers of climate change and are willing to make an extra effort to mitigate it with sustainable life choices, according to a new survey by Mint and Development Intelligence Unit. All but 5% of respondents said India’s climate patterns have changed over the past two decades.

Moving destinations

The Indian economy is growing quickly, and new companies are being set up rapidly as well. Almost 110,000 new firms were incorporated in the first seven months of the financial year, and the 12-month total could surpass the record set last year, an analysis by howindialives.com showed.

While the top five states still account for over half the companies incorporated during the period, the shares of four of them are down since 2018-19.

Metro expansion

€500 million: That’s how much financial assistance KfW, Germany’s state-owned investment and development bank, is set to provide for the expansion of the metro in Bengaluru, Mint reported.

KfW, which is looking to increase its funding in green-energy and sustainable-mobility projects in India, is also financing metro projects in Mumbai and Nagpur, among other cities. The funds will be used to build new lines for the Bengaluru Metro.

Price pinch

Even though inflation has dropped below 6%, it came in at a three-month high of 5.5% in November, led by higher food prices. While core inflation was at a comfortable level, food inflation surged to 8.7% from 6.61% the previous months.

Food inflation has been a major pain point this year and has prevented inflation from falling sustainably to the RBI's medium-term target of 4%. A below-normal monsoon has only made things worse.

Chart of the week: Funding crisis

Indian tech startups continued to face a slowdown in funding in 2023, with investments hitting a five-year low of $7 billion, according to Tracxn. While Bengaluru, Mumbai and Delhi-NCR continued to attract significant funding, they were nowhere close to the levels seen the previous year.

Follow our data stories on the “In Charts" and “Plain Facts" pages on the Mint website.