Asserting that retail inflation excluding food and fuel is still at an elevated level, the Reserve Bank of India on Tuesday said it would endeavour to curb price increases.
The RBI must first deal with the adverse turn of events in the CPI.
The rate of price rise was at 6.77 per cent in June last year.
The benchmark National Stock Exchange Nifty has rallied 4 per cent, or 750 points, from this month's low to end at 19,732 on week ending November 17. Technical analysts say the market could consolidate around the current levels as it is nearing the resistance zone. "The near-term uptrend status of the market remains intact, but there is a possibility of some more consolidation or minor weakness for the Nifty in the next one to two sessions.
The government will unveil the Consumer Price Index data and the Wholesale Price Index data for August on Monday.
Repo rate may well end 2013 at 8 per cent, where it had begun the year.
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A section of the market believes RBI should hold rates as negative real rates will hurt savings and investment.
The increase is in accordance with the accepted formula, which is based on the recommendations of the 6th Central Pay Commission, it said.
Analysts say RBI will cut rates because the liquidity crunch that began this time last year is still hurting the economy and also with an eye on the August industrial production numbers, which showed a contraction by 1.1 per cent -- the steepest in seven long years.
Inflation based on the Wholesale Price Index cooled to a 5-year low of 1.77 per cent in October driven by softening prices of fuel and food items.
The Reserve Bank is likely to maintain status quo on interest rates in its forthcoming monetary policy review but may change the stance in view of retail inflation piercing its upper tolerance limit, global uncertainties created by the ongoing Russia-Ukraine war, and the urgency to protect and boost growth, feel experts. The RBI governor-headed rate setting panel -- Monetary Policy Committee (MPC) -- will be holding its first meeting of the 2022-23 fiscal from April 6 to 8. The outcome will be announced on April 8.
When oil prices collapse from $110 to $45, economic agents in India experience a large income windfall.
Mutual funds (MFs) are betting on a turnaround in the healthcare sector to boost returns but are divided on the prospects of the information technology (IT) sector amid uncertain growth outlook. At the end of June, all of the top 20 fund houses were overweight on the healthcare sector vis--vis the sector's presence in the BSE 200 index, shows a report by Motilal Oswal Financial Services (MOFS). In the case of the IT sector, only six of the 20 fund houses had overweight positions.
The WPI number follows retail inflation (CPI) data, which had slipped to a record low of 3.78 per cent in July.
These stocks offer the best combination of maximum 'buy' recommendations from brokerages and share price upside over the next 12 months.
Global markets trends, inflation, release of industrial output data and quarterly earnings will dictate movement of the equity benchmarks this week, analysts said, adding that volatility might continue amid slew of announcements of macroeconomic data at the global level too. Moreover, foreign fund movement, crude oil prices and trend in rupee would also act as major drivers for the equity market, they added. "The direction of global equity markets along with movement in dollar index and crude oil prices will continue to dominate while inflation numbers of the USA on May 11 and inflation and IIP numbers of India on May 12 will also cause volatility in the market," said Santosh Meena, head of research, Swastika Investmart Ltd.
Oil and select auto heavyweights bore the brunt of selling pressure; ONGC, RIL, Tata Motors, M&M key losers.
'The risk is in not being invested and missing out on an upmove.'
"The main risk stems from the uncertainty surrounding the outcome of the south west monsoon in view of the rising probability of an El Nio event around July-August, and its implications for food inflation," RBI said, as it kept the status quo on key interest rate for the third time in a row.
The price difference between branded tea and loose tea has narrowed to a mere 5 per cent, helping the consumer to opt for branded labels. According to Bloomberg, the wholesale price index for tea in India gained 74 basis points from 128.30 in January to 222.50 at end of October this year. As a consequence, tea manufacturers in the wholesale and loose tea business, besides branded tea players, have increased prices.
If credit is not going to flow in response to a policy rate cut, while inflationary pressures, as well as expectations, may be stoked, a rate cut may not be appropriate at this point
According to currency dealers, any sharp movement in the rupee might result in the Reserve Bank of India intervening in the foreign exchange market.
After a sharp outperformance in the mid-and small-cap segments in the first half of calendar year 2023 (H1-CY23), analysts are now turning cautious on these two market segments and suggest investors stay selective and look for valuation comfort and earnings visibility before investing. The S&P BSE Midcap index has surged 13.7 per cent in H1-CY23, and the S&P BSE Small-cap index gained 12.7 per cent during this period, data shows. The S&P BSE Sensex, in comparison, has moved up 6.4 per cent.
Rajan has been facing continuous attacks by Bharatiya Janata Party MP Subramanian Swamy and some other sections, who have alleged that he has failed to lower interest rates and boost the economy
Some say the MPC will raise the rate, while others are of the view that there is already de facto interest rate tightening through rising bond yields, which might prompt the central bank to go for a pause.
The government is scheduled to release index of industrial growth for November and consumer price inflation for December later today.
Inflation breached the upper end of the RBI's comfort level of 4 per cent plus-minus two percentage points.
The report, however, said it remains watchful of the upside risks to inflation emanating from pass-through of minimum support prices (MSPs), adverse movement in crude oil prices, volatility in global financial markets, lagged impact of the rupee weakness on input prices, adverse implications from fiscal slippage and staggered impact of HRA increases by states and its second-round impact.
'New record for the Nifty50 is only a question of when.'
The rate of price rise of food items stood at 12.68 per cent in the corresponding week of the previous year.
The Indian economy is likely to post better than anticipated growth in the second quarter (July-September) owing to robust urban consumption and expansion in services, a Business Standard analysis of high-frequency indicators showed. While gross domestic product growth in the September quarter is expected to come below the 7.8 per cent print in the June quarter due to a favourable base fading, analysts say the print will be much closer to 7 per cent than the 6.5 per cent anticipated earlier. While the Reserve Bank of India (RBI) had estimated 6.5 per cent growth for July-September, last month Governor Shaktikanta Das said the growth figure would surprise on the upside.
India's services sector growth accelerated in April, as strong demand conditions resulted in the fastest increase in new business and output in close to 13 years, a monthly survey said on Wednesday. The pick-up in demand occurred in spite of escalating price pressures. The seasonally adjusted S&P Global India Services PMI Business Activity Index rose from 57.8 in March to 62.0 in April, signalling the fastest expansion in output since mid 2010, amid a pick-up in new business growth and favourable market conditions.
Bajaj Finserv was the biggest gainer in the Sensex pack, rising 2.21 per cent, followed by Titan, ITC, Kotak Mahindra Bank, HDFC Bank, HDFC, Bajaj Finance, IndusInd Bank, ICICI Bank, HUL, Reliance Industries and Mahindra & Mahindra. Wipro, Tata Consultancy Services, Power Grid and Tech Mahindra were the laggards.
India's annual industrial output grew at a slower-than-expected pace of 3.6 percent in September.
The S&P BSE Sensex and the Nifty50 have hit record highs amid the poll outcome-triggered bull frenzy at the bourses. Most analysts feel that the indices are on course to rise further over the next few months - till the general elections - albeit amid intermittent corrections - largely triggered by global developments. Bharatiya Janata Party's (BJP's) win in the three state elections of Madhya Pradesh (MP), Rajasthan and Chhattisgarh, analysts at Jefferies believe, reinforces the consensus expectations of a Modi win 2024 national elections with a greater likelihood of over 300 seats for the BJP.
It may be a little early to cheer the recovery in the fast-moving consumer goods (FMCG) space as a deceleration in discretionary demand, after the festival season, may offset fragile rural recovery, analysts have cautioned. "The overall demand environment for staples remains muted, while discretionary demand trends have seen some deceleration after the festival season. "We believe margins in staples have bottomed out, but we expect only a gradual uptick with the ongoing softening in raw material prices.
Banks and Capital Goods scrips among the top losers in noon deals.
Retail inflation inches up to 3.77%; IIP growth dips to 3-month low
The country saw two straight years of deficient monsoons.
DBS called Rajan's decision not to seek an extension as a 'negative surprise'.
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