MARKETS, P9 COMPANIES, P4 INTERNATIONAL, P8 RBI REPORT CRYPTO DEALS ACCELERATING DIGITAL TRANSFORMATION ISLAND NATION IN TURMOIL Share of gold in forex reserves rises to over 7% by March end No RBI instructions to Coinbase to suspend UPI-based transactions: Sources HCLTech to focus on cloud services for growth: Roshni Nadar Ranil Wickremesinghe returns as Sri Lankan PM to quell crisis PUNE, FRIDAY, MAY 13, 2022 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. NO XII 184, 26 PAGES, `10.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 52,930.31 ▼ 1,158.08 NIFTY: 15,808 ▼ 359.10 NIKKEI 225: 25,748.72 ▼ 464.92 HANG SENG: 19,380.34 ▼ 444.23 `/$: 77.42 ▼ 0.19 `/€: 80.73 ▲ 0.85 BRENT: $106.86 ▼ $0.65 GOLD: `50,968 < > `00 — THURSDAY BLUES: RETAIL PRICES SURGE, MARKETS SEE DEEP CUTS At 7.79%, inflation Over 14% fall since Oct peak jumps to 8-yr high US E-COMMERCE MAJOR Amazon has filed an interlocutory application before the NCLT, asking it not to admit the insolvency petition filed against debtladen Future Retail (FRL), reports Rajesh Kurup in Mumbai. Earlier, Bank of India had moved the NCLT’s Mumbai bench seeking to initiate a resolution process against FRL, while New Delhibased Foresight Innovations had filed a similar petition against Future Enterprises, another group entity. Ford drops plans to make EVs from India plant US CARMAKER FORD has dropped its proposed plan to manufacture electric vehicles in India and make the country a hub for EV exports, reports Sajan C Kumar in Chennai. The company, which was shortlisted for PLI from among 20 other automakers, may write to the government communicating that it no longer intends to invest in the country under the PLI scheme. It had said at the time that it will use one of its plants in India for making EVs for the export purposes. RESULTS CORNER L&T net profit up 10% at `3,621 cr in Q4 PAGE 4 Tata Motors loss narrows in Q4 to `992 cr PAGE 4 Special Feature ‘Volkswagen network is across 80% of India’ Volkswagen this year aims to at least double the sales it saw in CY21, says Ashish Gupta ■ BrandWagon, P7 IIP 7.0 THE RUPEE HIT a new low of 77.63 against the dollar as the April data on inflation in the US spooked markets, leading to expectationsofmoreaggressive ratehikesbytheFederalReserve earlier than anticipated. The slide in the domestic currency wascappedbytheReserveBank ofIndia(RBI),whichwasunderstood to have intervened at around the 77.60 level. The rupee closed at 77.42 after hitting an intraday high of 77.37, supported by dollar sales bythe central bank.However,the RBIwas relativelyless aggressive in its intervention onThursday,accordingtomarket participants. Dipti Chitale, senior vice president — risk management consulting at Mecklai Financial Services, said that the RBI may have intervened around the 77.60 level mainly in the spot market, but not as strongly as on Tuesday. Expertssaythatthereislittle that the RBI can do beyond a Manufacturing 4.23 4 CPI RIL Infosys Bajaj Finance -859.82 HDFC 0 58,000 -300 56,000 -600 54,000 -900 52,000 52,930.31 -1,200 50,000 October 18, 2021 May 12, 2022 -1,500 9 13.2 2 6 1.96 0 0.9 CPI Food 3 Apr 2021 Apr 2022 0 might inch up further — even till September —,before starting to moderate. Estimates of average inflation in FY23 also vary widely between 6% to 7%. Most see an another40 bps rate hike in the June monetary policy review, while the increase could even be half a percentage point. Continued on Page 8 THE INDEX OF industrial production (IIP) grew at 1.9% in March from a year earlier, having crept up only marginally from 1.5% in the previous month,suggesting the fragile nature of the economic recovery. However,giventhesharply-contractedbaseinthewakeofCovid curbs during the second wave, industrial output in April may even record a double-digit expansion,analysts said. Official data released on Thursday showed that the IIP grew as much as 12.5%, sequentially,inMarch.Butitwas partlydrivenbyseasonalfactors that led to a spike in electricity generationandalsoweighedon manufacturing.With this, the IIPgrew11.3%inthelastfiscal, driven by a favourable base (it was -8.4% in FY21). Continued on Page 8 Inverted scale 77.40 Rate hike may slow growth a bit, says finance secretary 77.42 77.45 77.51 77.55 77.60 77.65 FE BUREAU New Delhi, May 12 Intra-day, May 12 77.35 77.50 March 2022 Source: MoSPI ● DOUBLE WHAMMY ● TAMING INFLATION -Jahangir Aziz `/$ 1.9 (% change, y-o-y) June 2021 Source: MoSPI, India Ratings Rupee sinks to record low on US inflation; RBI intervenes SHRITAMA BOSE Mumbai, May 12 Detailed report on Page 9 6 60,000 -539.25 CPI core (Contribution in points) -892.56 7.79 SENSEX HDFC Bank 12 8 5.4 RETAILINFLATION BEAT analysts’ expectations and surged to a 95-month high of 7.79% inAprilonabroad-basedrisein price pressure across food,fuel and core segments, bolstering the chances of another round of aggressive rate hike by the central bank in June to break the back of inflation. Having refrained from an out-of-cycle revision of its inflation forecast earlier this month even as it hiked the repo rate by 40 basis points to 4.4%, the Reserve Bank of India (RBI) will now have to sharply raise its projection for the June quarter and for the full year (FY23) from the April predictions of 6.3% and 5.7%, respectively. Inflation based on the consumer price index (CPI) breached the RBI’s mediumterm target of 2-6% for a fourthstraightmonththrough April, driven substantially by global factors, mainly the rise in commodity prices and supply-chain disruptions in the wake of the Ukraine war. While some analysts feel retail inflation might have peaked in April, others say it 15 13.8 8.38 62,000 Top contributors to the Sensex fall 61,765.59 -1,063.21 BANIKINKAR PATTANAYAK New Delhi, May 12 IIP growth inches up to 1.9% in March (% change, y-o-y) 10 64,000 -1,369.09 IN THE NEWS Amazon asks NCLT to not admit BoI plea against Future Back-to-back rate hike likely in June EQUITY MARKETS TUMBLED onThursdayasinvestorsfeared raging inflation would derail growth as central banks across the globe move to raise rates, reports fe Bureau in Mumbai. Thesentimenthasalreadybeen hurt by an ordinary earnings season so far accompanied by cautiousmanagementcommentaryondemandinthemonths ahead. While strategists note that India remain an expensive market despite the correction fromtheOctoberpeaks,theBSE Sensex has fallen 14.3% from the peak on October18,2021. Open Prev. close: 77.24 Close point as a strong rupee is also detrimental to local exporters. “Sincetherupeehasdepreciated farlessthanthecurrenciesofits export competitors,the fallwas long overdue,” Chitale said. Thedollarindex,whichindicatesthestrengthoftheUSdollar against a basket of currencies,recentlysurgedtoa20-year high of $104.43. What is also exerting pressure on the rupee is the flight of foreign portfolio investors (FPIs) from the Indian equitymarkets,experts said. RATE HIKE BY the RBI to controlinflationwillleadto a“lesshighgrowthrate”for the country as demand is expected to moderate as a result of the central bank’s move,finance secretaryTV SomanathansaidonThursday, reports fe Bureau in NewDelhi.“When interest rates go up, demand is expected to moderate and that’s part of the reason for increasing the interest rates,” he told CNBC TV18. He,however,added that “India would still be one of the fastest growing economies”. ■ P2 Continued on Page 8 Campbell Wilson to pilot Air India FE BUREAU Mumbai, May 12 TATA SONS-OWNED AIR India on Thursday appointed aviation industry veteran Campbell Wilson as its chief executive officerand managing director,monthsafterformerTurkish Airlines chairman Ilker Ayci turned down the offer. Wilson has about 26 years of aviation industry expertise across both full service and low-cost airlines. At present, he is the CEO of Scoot, SingaporeAirlines'(SIA's)wholly-owned low-cost subsidiary. The Air India board has approved the appointment, which is subject to requisite regulatory approvals, Tata Sons said in a statement. “IamdelightedtowelcomeCampbell to Air India.He is an industryvet- eran havingworked in key global markets cutting across multiple functions. Further,Air India would benefit from his added experience of havingbuiltanairlinebrandin Asia. I look forward to workingwithhimin building a world- It is an honour to be selected to lead the iconic Air India and be a part of the highlyrespected Tata Group. class airline,” Air India chairman N Chandrasekaran said. Wilson will continue to be with Scoot till June 15. He had started off as a management trainee with SIAin NewZealandin1996.Hethenworked with SIA in Canada, Hong Kong andJapan,beforereturning to Singapore in 2011 as the founding CEO of Scoot, which he led until2016.Later,Wilson also served as the seniorvicepresident, sales and marketing, SIA,beforereturning for a second stint as the CEO of Scoot in April 2020. Continued on Page 8 Pune
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