The hardening of the Wholesale Price Index follows an uptick in retail inflation.
Raghuram Rajan on February 2 left the key interest rate unchanged.
The broader market performance, however, is expected to be better by virtue of good performance of state-owned banks on a low base.
The Reserve Bank of India (RBI) is likely to take a "more dovish" stance in its upcoming monetary policy review on December 2 and may go in for a cut repo rate in February, according to a British brokerage house report.
The global brokerage firm further said that BoP would be INR-supportive.
This was the fifth consecutive quarter when the Indian markets have seen positive flows from FIIs.
After a delayed start, the monsoon is advancing steadily.
BofA-ML revised its end-2015 rupee-dollar forecast to 60 from 64 earlier.
Rajan had overturned the majority opinion of the members and chose to hold the rates at the last monetary policy review in October.
According to the global financial services major, the Consumer Price Index based inflation is peaking off and is expected to be around 7.5-8 per cent in September.
"According to the global financial services major, though CAD at 3.2 per cent of GDP is significantly lower than the 4.8 per cent it registered in fiscal year 2012-13 ", it still remains higher than the 2.4 per cent of GDP that we estimate as the optimal current account deficit".
The April-June quarter GDP slipped to 7 per cent from 7.5 per cent.
India's current account deficit (CAD) is likely to ease to 4.4 per cent of the GDP in the current fiscal year on lower oil and gold prices, Bank of America Merrill Lynch (BofA-ML)said in a research note.
A below-normal monsoon can bring down India's GDP growth by 0.50-0.75 per cent this financial year, forcing the Reserve Bank to delay rate cuts to 2015, Bank of America-Merrill Lynch (BofA-ML) said.
In a recent report, BofA-ML suggests investors to track these six event risks in July apart from the Greek drama
RBI would get the comfort of meeting its 8 per cent January Consumer Price Index-based inflation target, BofA-ML said, adding that 'we expect the RBI to cut 75 bp in 2015 from February with inflation on course to 6 per cent in January 2016'.
Share rises further to 73 per cent from 66 per cent last year; Some overseas i-banks seen scaling down operations
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The newly-appointed Governor Raghuram Rajan said on Wednesday Reserve Bank of India will offer a window to banks to swap the fresh FCNR-B dollar funds, mobilised for a minimum tenor of three years and over, at a fixed rate of 3.5 per cent per annum. According to Bank of America Merrill Lynch, "the move should fetch $8-10 billion", adding that the move would help in shifting rupee risks away from NRIs at a time of extreme volatility.
Brokerage firm Bank of America Merrill Lynch (BofA-ML) on Monday said the ongoing US government shutdown is positive for the country, as it gives additional time to recoup the forex reserves.
Equity strategists are basing their expectation on strong corporate earnings recovery, supportive global economic growth, and gradual improvement in business sentiment.
The budget has strong growth impulses and response of the economy is positive.
BofA-ML mandated to find buyer for 27.5% stake in media group's holding firm
Though valuations have moderated, they are still above average.
The Reserve Bank may cut key interest rates as early as this week.
Brokerage firm CLSA says in its interactions with government officials, measures such as the dollar-deposit scheme were under consideration.
Analysts are expecting inflation to fall further in October and November on base effect. Inflation measured by consumer prices has been trending down for over four months, and came in at 6.7 per cent in September.
Global growth expectations have slumped to a five-month low.
Adopting a wait- and-watch approach ahead of US Fed meeting
However, some experts also feel that there is a case for front-loading of interest rate cut to give a push to the economy
2022 is shaping up as the year brimming with job opportunities for people who possess relevant skillsets. Therefore, it is crucial for fresh graduates and young professionals to enroll in relevant certification courses to add more feathers to their introductory portfolio
Hailstorms may cause Rs 12k-cr crop damage, El Nino a bigger worry.
At a time when major economies have increased spending, India will have to do the same.
Vishal Sikka said such a plan is on the anvil.
Green bonds refer to bonds issued mainly by power companies to finance energy efficient projects
Experts hail 2014 as the worst year for banks.
In the past two weeks China has cut interest rates.
BlackBerry has signed a letter of intent agreement under which a consortium to be led by Fairfax Financial Holdings Limited has offered to acquire the company subject to due diligence, it said in a statement.
Sahara accuses Mirach Capital of cheating, forging bank letter.
Tata Steel and Tata Chemicals under investor watch
Demonetisation impact, earnings growth, central bank policies will get attention.
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