The decline in retail inflation has been mainly on account of falling prices of vegetables and pulses
RBI watchers are going to be on tenterhooks for the next 3 weeks.
Retail inflation in April softened further and fell to a four-month low of 4.87 per cent.
Stocks of Indian steel companies are reeling from pricing pressure that is partly blamed on cheap imports. The stocks have declined up to 9 per cent on the NSE in one month, likely allowing investors an opportunity to use the correction to enter the pack as pricing pressure eases. "In steel or any other commodity, if prices or spreads are nearing their bottom, it can be an opportune time to invest in those stocks.
'Revision of the base year for both CPI and GDP are long overdue.' 'The basic data that went into the 2011-2012 series were mainly from surveys done in 2011 or earlier.' 'We have since seen the emergence of new sectors like platform-based work and online marketing.' 'The employment surveys and the consumption surveys need to reflect these adequately.'
The Centre has decided to create a buffer stock of 350,000 tonnes.
Gail India subsidiary Mahanagar Gas (MGL) on Friday announced a steep reduction in the retail price of compressed natural gas (CNG) by Rs 8/kg and domestic PNG (piped natural gas) by Rs 5/SCM across its licenced area. The move comes on the heels of the Centre revising the pricing methodology of domestically-produced natural gas on Thursday as proposed by the Kirit Parikh committee and following it with the new price announcement earlier in the day. In February, the city gas distributor reduced its CNG price by Rs 2.5/kg but prices are still around 80 per cent more than those in April last.
Vegetables account for 5.44 per cent of the Consumer Price Index.
The forthcoming Budget is likely to make a provision of Rs 64,000 crore (Rs 640 billion) for the Mahatma Gandhi National Rural Employment Guarantee Scheme in 2011-12, against Rs 40,100 crore (Rs 401 billion) in the current fiscal.
The statistics ministry has proposed the new base year for GDP and IIP as 2017-18 while for CPI it will be 2018.
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The wholesale price-based inflation accelerated to a record high of 12.94 per cent in May, on rising prices of crude oil and manufactured goods. Low base effect also contributed to the spike in WPI inflation in May 2021. In May 2020, WPI inflation was at (-) 3.37 per cent. This is the fifth straight month of uptick seen in the wholesale price index (WPI)-based inflation. In April, 2021, WPI inflation hit double digit at 10.49 per cent. "The annual rate of inflation, based on monthly WPI, was 12.94 per cent for the month of May, 2021 (over May, 2020) as compared to (-) 3.37 per cent in May 2020.
The earlier high was in January this year at 5.07 per cent.
Total debt for listed Indian companies excluding financials fell only 4 per cent to $368 billion in the year ended in March 2015.
Rising crude oil prices, traction in China equities and inflation concerns back home are casting a shadow on the Indian equity markets in the short term, believe analysts at Jefferies. They said this could see the markets remaining range-bound in the near term before the next leg up.
The retail inflation rate breached the 6 per cent upper tolerance limit of the RBI for the first time in seven months in January, while the wholesale price index stayed in double-digits for the 10th month in a row, showed two sets of data released by the government on Monday. Retail inflation, the key input for the RBI while reviewing the repo rate every two months, soared during the month mainly because of a spike in certain food items. The previous high for retail inflation was 6.26 per cent in June 2021.
Companies in the banking, finance sector and insurance (BFSI) sector have underperformed on the bourses despite leading the earnings growth charts in the post-pandemic period. This has created a dichotomy between their earnings and share prices. BFSI companies have never been less expensive than the rest of the equity market.
Deflation masked the rise in food inflation to a 5-month high.
The Reserve Bank of India, which mainly factors in retail inflation to decide its monetary policy, has been tasked by the government to ensure the rate of price rise remains around 4 per cent.
PMO being sent daily updates on food cost situation in four major metropolitan cities to ensure no unusual flare-up.
India's services sector lost momentum in July as demand was curtailed by competitive pressures, elevated inflation and unfavourable weather, a monthly survey said on Wednesday. The seasonally adjusted S&P Global India Services PMI Business Activity Index fell from 59.2 in June to 55.5 in July, pointing to the slowest rate of growth in four months. For the 12th straight month, the services sector witnessed an expansion in output. In Purchasing Managers' Index (PMI) parlance, a print above 50 means expansion while a score below 50 denotes contraction.
While the farmers are not getting remunerative prices for their produce, at the same time they are forced to pay high prices for items they consume.
'As the markets are expected to remain jittery in the near term, we advise investors to use this opportunity to enter quality largecaps from a long-term perspective.'
This could be the reason why Prime Minister Narendra Modi mentioned tomato, onion, and potato as his government's 'TOP' priority, in an election rally on February 5 in poll-bound Karnataka.
The rise in May Wholesale Price Index based inflation has been mainly on account of 31.44 per cent increase in prices of potato, 19.40 per cent in fruits and 12.75 per cent in rice.
Had you invested Rs 10,000 each in JSW Steel, Titan Company and Bajaj Finance 20 years ago, when they were just penny stocks (trading below Rs 10), you would have become a millionaire by now.
CLSA says government actions to facilitate investment more important for revival than a token monetary easing.
India's manufacturing sector activity moderated in April, but still recorded the second fastest improvement in operating conditions in three-and-a-half years supported by buoyant demand, a monthly survey said on Thursday.
'The economy is suffering (perhaps 'enjoying' is a better word) the lowest credit demand in decades; banks are struggling with stressed loans equivalent to near 10 per cent of GDP,' points out Devangshu Datta.
High oil prices are expected to push up inflation to 3.9 per cent in the next three months, hardening interest rates, economic think-tank IEG has said.
India spends significantly less on defence than could be expected from a country that faces simultaneous armed threats from two hostile neighbours -- China and Pakistan.
Consumer prices rose an annual 5.11 per cent (2012 base) in January.
Retail inflation fell to a 15-month low of 5.66 per cent in March, mainly due to a decline in food prices, government data showed on Wednesday. The inflation figure in March is within the RBI's comfort zone as it is below 6 per cent. The retail inflation based on Consumer Price Index (CPI) was 6.44 per cent in February 2023 and 6.95 per cent in the year-ago period.
RBI Governor Raghuram Rajan will announce the monetary policy on April 1 and expectations of a status quo are rising ever since the official data on consumer price inflation for February pointed to a cool down to 8.1 per cent.
India's wholesale prices declined at a faster-than-expected annual rate of 2.33 per cent in March.
Wholesale fuel prices in May fell 10.51 per cent year-on-year.
Lower income groups earning less than Rs 100,000 a year are yet to recover as are those earning between Rs 100,000 and Rs 200,000.
Food prices, which have contributed to a large part of inflation over recent years, have remained benign, despite unseasonal rain.
Monetary Policy- Easing expected to happen later this financial year.
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