Multiple tailwinds for the automobile sector, including a cut in goods and services tax (GST) rates, are keeping analysts bullish on auto stocks from a long-term perspective, even as they see the rally running its course in the near term.
Wholesale inflation in the country rose marginally to 0.53 per cent in March compared to 0.20 per cent in the preceding month due to increase in prices of vegetables, potato, onion and crude oil. The Wholesale Price Index (WPI)-based inflation was in the negative zone from April to October and had turned positive in November at 0.26 per cent. The inflation in March 2023 was 1.41 per cent.
Among Sensex firms, Eternal, Infosys, Asian Paints, HDFC Bank, Bajaj Finserv and Titan were the major gainers. However, Tata Steel, Tech Mahindra, Adani Ports and Bharat Electronics were among the laggards.
The wholesale price-based inflation eased for the eighth consecutive month to 4.73 per cent in January on easing prices of manufactured items, fuel and power. The wholesale price-index (WPI) based inflation rate was 4.95 per cent in December 2022 and 13.68 per cent in January 2022. Inflation in food articles, however, rose to 2.38 per cent in January, from (-) 1.25 per cent in December, 2022.
Wholesale price inflation remained in the negative territory for the fourth month in a row in July at (-)1.36 per cent, even though prices of food items, especially vegetables, skyrocketed. The inflation, however, has inched up from (-)4.12 per cent recorded in June fuelled by 62.12 per cent rise in vegetable prices. In July last year, wholesale price index (WPI) was 14.07 per cent.
Global funds' assets under custody (AUC) in India have been flat this year, with a Rs 2 trillion drop in information technology (IT) holdings offset by gains in financial stocks. AUC is the total market value of equities held by FPIs.
Stock markets will be driven by further developments on the US-China tariff war front along with quarterly earnings announcements from IT majors Wipro and Infosys in a holiday-shortened week, analysts said. Global market trends and trading activity of foreign investors would also dictate market movement this week, experts noted.
The wholesale price index (WPI)-based inflation eased in January to 0.27 per cent, mainly due to moderation in prices of food items. WPI inflation was at 0.73 per cent in December 2023. The WPI inflation was in the negative zone from April to October and had turned positive in November at 0.39 per cent.
The wholesale price-based inflation declined to a 21-month low of 5.85 per cent in November on easing prices of food, fuel and manufactured items. After remaining in double digits for 19 months, the wholesale price index (WPI) based inflation declined to 8.39 per cent in October. The inflation was 14.87 per cent in November 2021. "Decline in the rate of inflation in November 2022, is primarily contributed by fall in prices of food articles, basic metals, textiles, chemicals & chemical products and paper & paper products as compared to the corresponding month of the previous year," the commerce and industry ministry said on Wednesday.
In an eventful week ahead, stock markets may face volatile trends before the RBI's interest rate decision and the US inflation data announcements, as investors continue to assess the broader implications of US tariffs on global economy and inflation, analysts said. Investors fear that a full-blown trade war will impact global trade and economic growth, according to market experts.
Retail inflation eased to a nearly six-year low of 3.16 per cent in April mainly due to subdued prices of vegetables, fruits, pulses, and other protein-rich items, creating enough room for the Reserve Bank to go for another round of rate cut in the June monetary policy review. The Consumer Price Index (CPI) based inflation was 3.34 per cent in March and 4.83 per cent in April 2024. It was 3.15 per cent in July 2019.
The wholesale price inflation was negative for 10 weeks in a row, but retail prices of items consumed by people in villages rose at the rate of nearly 13 per cent in the month of July.
The Centre on Wednesday increased the Dearness Allowance (DA) by 3 percentage points effective from July 1 this year, benefitting more than 1 crore employees and pensioners ahead of the Diwali festival. The Union Cabinet has approved to increase Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners by three percentage points of the basic pay/pension ahead of Diwali, Union Minister Ashwini Vaishnaw said after the Cabinet meeting.
Retail inflation rose at the fastest pace in four months in December 2023 at 5.69 per cent, on account of an increase in prices of vegetables, pulses, and spices, according to government data released on Friday. The annual inflation based on Consumer Price Index (CPI) was at 5.55 per cent in November and 5.72 per cent in the year-ago month. As per the data released by the National Statistical Office (NSO), the rate of price rise in the food basket, which constitutes nearly half of the CPI, increased to 9.53 per cent in December 2023, as against 8.7 per cent in the preceding month, and 4.19 per cent in December 2022.
Soaring vegetable prices pushed the retail inflation rate to a nine-month high of 5.49 pr cent in September, according to government data released on Monday. The consumer price index (CPI)-based retail inflation rate was 3.65 per cent in August and 5.02 per in September 2023. The previous high inflation rate was witnessed in December 2023 at 5.69 per cent.
'Challenge is basically near-term growth as the outlook has turned a bit adverse.'
Retail inflation eased to a one-year low of 4.75 per cent in May as prices of some kitchen items declined marginally, according to government data released on Wednesday. The Consumer Price Index (CPI) based retail inflation was 4.83 per cent in April 2024 and 4.31 per cent in May 2023 (previous low).
Shares of Oil marketing companies (OMCs) extended their gains for the fourth consecutive session on Thursday after crude oil prices plunged to six-month lows in the international markets, which boosted investor sentiments. Traders said the OMC stocks gained with crude oil prices hovering below $70 per barrel after OPEC-plus decision to increase output from April, a move which is expected to favour Indian refiners with added marketing margins on retail fuel.
The Indian economy continues to sustain the momentum achieved in the first half of 2023-24 and expectations of a fresh round of capex by the corporate sector is likely to fuel the next leg of growth, the Reserve Bank Bulletin said on Tuesday. "The likelihood of the global economy exhibiting stronger than expected growth in 2024 has brightened in recent months, with risks broadly balanced," said an article on 'State of the Economy' published in the bulletin.
The Indian services sector growth touched a ten-month high in June aided by robust expansion in international sales and job creation, amid positive demand trends and ongoing improvement in sales, a monthly survey said on Thursday. The seasonally adjusted HSBC India Services PMI Business Activity Index rose from 58.8 in May to 60.4 in June, driven by sharp upturn in new business orders.
Retail inflation, based on Consumer Price Index, hit a 15-month high of 4.88 per cent in November
Wholesale inflation rate declined marginally to 0.2 per cent in February compared to 0.27 per cent in the preceding month despite a slight uptick in the food basket. The Wholesale Price Index (WPI)-based inflation was in the negative zone from April to October and had turned positive in November at 0.26 per cent. The inflation in February 2023 was 3.85 per cent.
Quarterly earnings of corporates, trading activity of foreign investors and inflation data are the key factors that are expected to drive the momentum in the equity markets this week, analysts said.
Outgoing Reserve Bank Governor Shaktikanta Das said on Tuesday that restoring inflation-growth balance is the most important task ahead of the central bank. Addressing a press conference on his last day as the central bank chief, Das said his successor will have to navigate the changing world order, effectively deal with cyber threats, and focus on harnessing new technologies.
'If nominal growth improves and earnings pick up, Indian stock markets could see a rally next year.'
This is the highest level of wholesale price index-based (WPI) inflation since February, when it was 2.26 per cent.
Among Sensex firms, Tata Consultancy Services, Adani Ports, Hindustan Unilever, Nestle, Bajaj Finserv and NTPC were the laggards. IndusInd Bank, Titan, Mahindra & Mahindra and Maruti were among the biggest gainers.
In a data-packed week, the domestic macroeconomic figures -- industrial production and inflation numbers -- along with global trends would dictate trends in the equity market this week, analysts said. According to experts, markets may face volatile trends due to high valuations. Equity benchmark indices Sensex and Nifty hit their fresh record peaks on Thursday. Besides, trading activity of foreign investors, movement of global oil benchmark Brent crude and rupee-dollar trend would also influence trading in equities.
The retail inflation eased to a four-month low of 4.87 per cent in October, mainly due to cooling prices of food items, government data showed on Monday. The Consumer Price Index (CPI) based retail inflation fell to a three-month low of 5.02 per cent in September. The previous low inflation was recorded at 4.87 per cent in June.
Wholesale price-based inflation rate fell to a 3-year low of (-) 3.48 per cent in May on easing prices of food, fuel and manufactured items, strengthening the case for continuing with the pause in rate hike in the coming months of the current fiscal. This is the second straight month when WPI has been in the negative zone mainly on account of a higher base and falling prices of fuel and manufactured goods. Food prices also eased during May. In May, 2022 WPI inflation was at 16.63 per cent. Last month, it was (-) 0.92 per cent.
Chief economic adviser to the finance ministry Arvind Virmani on Wednesday said the retail price-based inflation, which is ruling above the wholesale price index, will come down with a lag but would not fall as much as the rate of rise in wholesale prices is falling.
Benchmark stock indices Sensex and Nifty declined on Monday, extending the losing run to the fourth day amid selling in IT shares and foreign fund outflows. The 30-share BSE Sensex dropped by 247.01 points or 0.30 per cent to settle at 82,253.46. During the day, it fell 490.09 points or 0.59 per cent to 82,010.38 but recovered some of the losses towards the close.
The Reserve Bank of India's (RBI's) caution on inflation, highlighted during the recent monetary policy meeting, may put investors' faith in fast moving consumer goods (FMCG) stocks to test, analysts said. They, however, believe FMCG stocks may ride through this near-term investor anxiety as related companies are, typically, well-equipped to handle inflation due to their pricing power and steady demand for essential goods.
The wholesale price index (WPI)-based inflation rose in December at 0.73 per cent mainly due to a sharp rise in food prices. The WPI inflation was in the negative zone from April to October and had turned positive in November at 0.26 per cent.
GST 2.0 may cushion consumers against US tariffs, but like the 2019 corporate tax cut, it risks being another tactical fix rather than a structural growth strategy, expects Debashis Basu.
How is it that tomatoes recorded a price fall in official statistics when it remained unaffordable for the common person in June?
Retail inflation eased to 7.04 per cent in May, mainly on account of softening food and fuel prices as the government as well as the RBI stepped in to control spiralling price rise by way of duty cuts and repo rate hike. However, the inflation print stayed above the Reserve Bank's upper tolerance level of 6 per cent for the fifth month in a row. The Consumer Price Index (CPI) based retail inflation was 7.79 per cent in April.
Retail inflation declined to a three-month low of 5.02 in September, mainly due to easing food prices, according to the government data released on Thursday. The inflation has come back to the Reserve Bank's comfort level of below 6 per cent after a gap of two months. The inflation based on the consumer price index (CPI) was 6.83 per cent in August and 7.41 per cent in September 2022.
The central bank is widely expected to increase the repo rate by 25 basis points on Tuesday to 7.75 per cent to fight inflation even as it continues to unwind its rupee defense steps, a Reuters poll showed.
This adjustment is aimed at helping workers cope with the rising cost of living, a labour ministry statement said.
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