With the average WPI-based inflation at 7.5% and CPI-based one above 10%, a bit of aggression is required to beat inflation. Four experts give their views.
Trading in the equity market this week will be highly influenced by a host of important triggers, with quarterly earnings from IT majors TCS, Wipro, and domestic inflation and IIP data taking the centre stage in dictating the movement in equities, analysts said. Besides, global factors and trading activity of foreign investors will also drive markets. "We are approaching the first quarter earnings season, with HCL Tech, TCS and Wipro set to report their earnings this week.
Food inflation inched up to 17.40 per cent for the week ended January 16 on account of high prices of potato and pulses. The wholesale price-based food inflation was 16.81 per cent in the previous week. Potato prices rose as much as 57.56 per cent over the last year, followed by prices of pulses which jumped by 46.87 per cent.
'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.'
Inflation fell marginally to 3.01 per cent in the week ended August 27 from 3.08 per cent a week ago, despite rise in prices of food, aviation fuel and manufactured items.
From the Sensex pack, HCL Technologies, Infosys, Wipro, Bharti Airtel, Larsen & Toubro, Mahindra & Mahindra, Tata Consultancy Services and Asian Paints were the major gainers. Axis Bank, IndusInd Bank, Bajaj Finance, JSW Steel, State Bank of India and Tata Steel were among the major laggards.
The bank is due to review the monetary policy on July 30.
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.
CRISIL also expects the average Wholesale Price Index inflation to be higher at around 8 per cent as against of 7 per cent estimated earlier.
Central bank should raise key policy rates again but avoid becoming a prisoner of its own making.
Noting that India's inflation record was 'much, much better' against emerging economies, Basu said inflation should go down from September and as per expectations and calculations of the Finance Ministry, it will go below seven per cent from September.
After remaining unchanged in the previous week, inflation fell to a 40-month low of 4.83 per cent during the week ended February 19 due to cheaper edible oils, vegetables and some of the manufactured products despite higher global oil prices.
Headline inflation, as measured by the wholesale price index, was 9.7 per cent in March, 8.7 per cent in April and 9.1 per cent in the following month.
Inflation rose for the third consecutive week to 5.03 per cent for the week ended May 29 despite cheaper vegetables and fruits, eggs and several edible oils.
The forecast has an error margin of four days, which is considered normal
The wholesale price-based inflation stands at 9.9 per cent in March, but many analysts criticise the compilation of data, saying it includes several items that are no longer in vogue.
RBI faces contradictory signals.
The UPA government's commitment to keep the price rise under check notwithstanding, inflation rose by 0.47 per cent to 4.67 per cent for the week ended May 15 due to surging prices of mass consumption items like vegetables, milk and edible oils.
The 30-share Sensitive Index or Sensex ended the weak in the negative region. It tanked 620 points to close at 13,802, a loss of 4.3% compared to Thursday's close.
Data released on Thursday showed prices of essential commodities like cereals went up by 12.7 per cent, rice by 11.75 per cent, wheat 12.6 per cent and pulses rose by 42 per cent.
In its monetary and macroeconomic development report, RBI has raised hopes of a rate cut but also flagged some challenges.
The Sensex opened with a positive gap of 63 points at 15,896, but soon slipped into red owing to nervousness in the markets. The Sensex finally ended with a significant loss of 489 points at 15,343. The NSE Nifty dropped 125 points to close at 4,647. BHEL and HDFC, L&T and M&M, ICICI Bank, Maruti and Reliance, HDFC Bank, DLF, Reliance Communications and Infosys, Cipla, Tata Motors and NTPC were major losers. Ambuja Cements, Reliance Energy, SBI and TCS too were losers.
RBI may wait for a substantial downtrend and maintain repo at the current level in its third-quarter review.
An analysis by Business Standard suggests that for the week ended May 10, for which data will be released next Friday, the inflation rate will range between 7.67 per cent and 8.05 per cent, depending on how the index moves.
Some see CRR cut as tight liquidity continues.
A Reuters poll forecast the wholesale price index , India's main inflation measure, rose an annual 7.6 per cent in November, up from 7.45 per cent in October.
With inflation turning positive after 13 weeks, the Reserve Bank on Thursday said the wholesale price index may rise to six per cent by this fiscal end a development that may pose challenges to the central bank in maintaining a stable monetary policy.
The report said that weak global growth prospects have kept company prices in check in the international market and the same sentiments were being reflected in the domestic market. According to CMIE, prices of basic metal and metal products are projected to decline by 10.5 per cent in the current fiscal.
After remaining firm for two consecutive weeks, inflation fell marginally by 0.14 per cent to 4.26 per cent for the week ended April 24 even as prices rose for fruits, vegetables, eggs and various manufactured items, including edible oils.
The rate of inflation for the week stood\nat minus 1.14 per cent as against minus 1.61 per cent for the week ended June 6,\nofficial data released in New Delhi on Thursday.
This is the second week in a row when inflation remained in negative territory. The wholesale price index stood at 11.80 per cent during the corresponding week a year ago.
The worst of recession could coincide with the run-up to the elections.
National Sample Survey Organisation, a division within the ministry of statistics, has been roped in to collect price data for the new series and a dry run is on the anvil in the next couple of months. The new series will have 2004-05 as the base year, as against 1993-94 in the present mode and will reflect a consumption basket that is relevant in today's scenario, thereby making inflation data more reliable. The new series will have 2004-05 as the base year.
After six weeks of decline, inflation rose marginally by 0.11 per cent to 4.33% during the week ended June 11.
Food inflation, measured by the Wholesale Price Index, was 7.33 per cent in the previous week.
Inflation based on the wholesale price index rose marginally to 4.2 per cent for the week ended November 12, from 4.14 per cent in the previous week mainly due to the rise in prices of minerals and non-food essential items.
Although inflation had touched 6.12 per cent during the week ending January 6 this fiscal, but it came down to 5.95 per cent in the following week.
Food inflation, as measured by the Wholesale Price Index, stood at 9.01 per cent in the previous week, while it was over 21 per cent in the first week of June last year.
The latest numbers likely to be seen by the government as a silver lining after the slowdown in economic growth during the first quarter.
BSE Capital Goods and FMCG indices surged between 1-2%
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