Retail inflation declined to a 25-month low of 4.25 per cent in May mainly on account of softening prices of food and fuel items, with experts saying that RBI is expected to hold interest rates steady in the current fiscal. This is the fourth straight month when retail inflation has declined and the third straight month of Consumer Price Index (CPI) based inflation remaining within the RBI's comfort zone of below 6 per cent. CPI-based inflation stood at 4.7 per cent in April and 7.04 per cent in May 2022.
The wholesale price-based inflation rose to a four-month high of 14.55 per cent in March, mainly due to hardening of crude oil and commodity prices, even though vegetables witnessed easing of price pressures. As per the government data released on Monday, WPI inflation has remained in double digits for the 12th consecutive month beginning April 2021. The last time such a level of WPI was recorded was in November 2021, when inflation was 14.87 per cent.
The RBI expects inflation in 2015 to hover around 6 per cent -- its target for January 2016 -- and sees risks to the target evenly balanced.
Investors' wealth eroded by more than Rs 2.21 lakh crore in early trade on Wednesday, with the market witnessing a selling-off amid prospects of aggressive rate hikes by the US Federal Reserve to tackle high inflation, and sluggish global trends. In less than an hour of the start of trading on Wednesday, the key indices -- Sensex and Nifty -- were deep in the red and witnessed significant volatility, reflecting jittery investor sentiments. The market capitalisation of BSE-listed companies, which is also an indicator of wealth of investors, tumbled more than Rs 2.21 lakh crore to Rs 2,84,49,727.56 crore amid the 30-share Sensex falling 564.76 points to 60,006.32 points.
Equity benchmarks Sensex and Nifty on Friday spurted by nearly 2 per cent, propelled by heavy buying in IT, metal and financial stocks amid a rally in global markets after lower-than-expected US inflation data. A strong rupee against the US dollar and unabated foreign capital inflows further bolstered sentiment, traders said. Easing US inflation triggered speculation that the US Federal Reserve might slow down the pace of interest rate hikes.
The food-price segment in the WPI has been growing at 8.3 per cent, much higher than the rise in the index for manufactured articles. In fact, segments like minerals and fuel have witnessed a decline in the WPI and have pulled the inflation down. The rise in food prices affects the common man more than the increase in prices of any other item.
'If you see the composition of items which are causing this spike in prices, most of them have little to do with the kharif harvest, except for pulses and vegetables to some extent.' 'I don't know on what basis the government is claiming that food prices will moderate in the weeks to come.'
The ever-astute Ravi Matthai, Director of Indian Institute of Management, Ahmedabad in 1971, offered me a basic salary of Rs 1,000 per month on my return from the United States. I doubt if IIMA could hire a faculty member at Rs 55,000 per month today! points out Dr Shreekant Sambrani.
While the average CPI hovers at 10 per cent for five years now, our tax benefits are almost a decade old.
Reserve Bank of India (RBI) Governor Shaktikanta Das had stumped the market in the previous two policies - in August and in October - first with action and then with words. In August, it was the introduction of an incremental cash reserve ratio (I-CRR) to take out excess liquidity, which took the markets by surprise. In October, there was no action. Rather, what is known as "open mouth operation", Das' comment that the central bank might conduct open market operations (OMOs) by selling bonds tempered the euphoria in the bond markets after JP Morgan's inclusion of India in its Emerging Market Bond Index.
It would not be surprising if India, the world's largest producer of milk, has to resort to imports to meet the elevated summer demand, states Surinder Sud.
The wholesale price-based inflation hovered over seven per cent through 2012, down from 10 per cent inflation seen in the previous year, reflecting the impact of tight money policy of the Reserve Bank of India.
Retail inflation dipped marginally to 6.44 per cent in February, mainly on account of a slight easing in prices of food and fuel items though it remained above the Reserve Bank's comfort level of 6 per cent for the second month in a row. As per the government data released on Monday, the Consumer Price Index (CPI)-based inflation was at 6.52 per cent in January and 6.07 per cent in February 2022. The retail inflation rate for the food basket worked out to be 5.95 per cent in February, marginally lower than 6 per cent in January.
The wholesale price-based inflation spiked to 12.54 per cent in October, mainly due to rise in prices of manufactured products and crude petroleum. WPI inflation has remained in double digit for the seventh consecutive month beginning April. Inflation in September this year was at 10.66 per cent, while in October 2020 it was at 1.31 per cent.
Retail inflation moved up marginally to 10.36 per cent in May on account of increase in prices of vegetables, edible oils and milk.
The Consumer Price Index based inflation was at 10.91 per cent in February.
Inflation in protein-based items -- egg, meat and fish -- stood at 14.36 per cent during the month. In oils and fats segment, it stood at 11.72 per cent.
Retail inflation declined marginally to 9.86 per cent in July due to lower prices of spices, cereals and its products although prices of vegetables remained high during the month.
Post workers are collecting data that determines the level of India's consumer price index, which is likely to become RBI's most important tool for setting monetary policy.
It was higher than 3.2 per cent rate registered in February, the lowest pace recorded in 20 months, state run Xinhua reported.
Bond markets, global as well as domestic, are likely headed towards hard times over the next three to six months, as higher vegetable prices, rising fuel costs, and improved wages may keep inflation hot, believe analysts, who expect the yields to hit 7.5 per cent in the near-term from the current 7.234 per cent. In this backdrop, they suggest investors can put in money in funds/instruments with residual maturity of 4 to 6 years, while longer-term investors can allocate cautiously to the longer end in the range beyond 7 years.
Retail inflation, based on the Consumer Price Index, was 8.83 per cent in February, as per the government data release in New Delhi on Wednesday.
Costlier vegetables and fruits, such as onions and tomatoes, drove retail inflation to 10.09 per cent in October, entering double digits after seven months.
Retail inflation during the first month of the current fiscal stood at 2.9 per cent, down from 4.6 per cent a year ago. Food inflation based on Consumer Food Price Index declined to a low of 0.1 per cent during the financial year 2018-19, the survey said.
This breathes in a sense of relief for the Indian economy already reeling under low growth rate, depreciation of rupee and slowing down of industrial production.
The CPI, based on retail prices, stood at 108.8 points in June.
In calendar year 2024, the stock price of Trent has zoomed 160% As compared to the 18% rally in the BSE Sensex during the same period. It has outperformed the market in the past 10 consecutive years.
Food prices for consumers rose an annual 10.65 per cent in May, slightly faster than an annual rise of 10.61 per cent in April.
The vegetables basket in Dec. recorded the highest inflation of 25.71 per cent.
The retail inflation was 9.90 per cent in November and 9.75 per cent in October.
The 30-share Sensex ended up 222 points at 25,229 and the 50-share Nifty ended up 73 points at 7,527.
The overall market breadth remained firm as 1,673 stocks are advancing while 1,303 are declining.
A wider fiscal deficit despite higher divestment will be a disappointing beginning.
'Over the next 12 months, it will be difficult to make 15 to 20 per cent return in the markets as the valuations appear stretched.'
There are respected names arguing both for and against this recommendation of the Urjit Patel committee.
Mixed earnings and not so encouraging macroeconomic data dented sentiment, Ajit Mishra, VP - Research, Religare Broking Ltd said. In twin blows to Indian economic revival, higher food prices drove retail inflation to a five-month high of 7.4 per cent, while factory output fell for the first time in 18 months. The second consecutive month of rise in consumer price index (CPI)-based inflation will add to the pressure on the Reserve Bank of India (RBI) to again raise interest rates to tame high prices. In the broader market, BSE Midcap declined 0.73 per cent while smallcap dropped 0.45 per cent.
Retail inflation declined to an 18-month low of 4.7 per cent in April mainly due to falling prices of vegetables, oils and fats, and came closer to Reserve Bank's target of 4 per cent, showed government data released Friday. It was for the second month in a row that Consumer Price Index (CPI) based inflation remained within the RBI's comfort zone of below 6 per cent. The government has tasked the central bank to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side.
While headline and core WPI are stuck in a disinflationary phase, the retail measure is inching north.
Inflation in fruits was 8.93 per cent.
FMCG: Cut in excise duty on baby, clinical diapers, adult diapers and sanitary napkins.
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