Inflation fell for the tenth consecutive week to 5.01 per cent in the week ended February 5, touching the lowest level after the UPA came into power, due to cheaper vegetables, fruits and edible oils.
Inflation, as measured on the Wholesale Price Index (WPI), has been in the negative zone since November 2014.
State Bank of India chairman A K Purwar said on Friday that interest rates will remain stable in the short term despite rising inflation, and may not remain soft in the medium and long term.
The wholesale price-based inflation in February rose to 13.11 per cent on hardening of prices of crude oil and non-food items, even though food articles softened. After two months of mild easing, WPI inflation accelerated in February and remained in double digits for the 11th consecutive month, beginning April 2021. WPI inflation last month was 12.96 per cent, while in February last year, it was 4.83 per cent. The rise in crude oil and natural gas prices after the Russian invasion of Ukraine, beginning February 24, has put pressure on the wholesale price index, even though food articles saw softening across categories of vegetables to pulses to protein-rich items.
The WPI inflation stood at negative 2.4% in May 2015, compared with a negative 2.65% in April 2015.
'Spending by the middle class is limited with a focus on savings. However, there is buoyancy at the top-end.'
Inflation for the month of August stood at 8.51 per cent, according to the new Wholesale Price Inflation (WPI) series.
Retail inflation measured by the consumer price index has risen sharply across food and non-food constituents, including services, keeping inflation expectations high, the Reserve Bank of India said in its Second Quarter Review of Monetary Policy 2013-14.
The broader markets ended in line with the benchmark indices- BSE Midcap and Smallcap indices ended higher by 1.3% and 0.9% each.
The inflation in vegetables remained stubborn, which jumped 16.91 per cent
Inflation in pulses, vegetables and cereals was higher in Jan.
Overall, volume growth is likely to be in the range of 3-8 per cent for two-wheelers and 5-7 per cent for passenger vehicles owing to healthy demand from urban and rural areas and pending order books.
Wholesale fuel prices in May fell 10.51 per cent year-on-year.
The cooking oil national industry body -- Solvent Extractors' Association (SEA) of India has suggested immediate initiation of government to government (G2G) dialogue with Indonesia on the proposed palm oil export ban from April 28 by them as it would have an adverse repercussions in India. Indonesia, which is the world's largest producer of palm oil and meets nearly 50 per cent of the total palm oil requirement in India annually, had announced to ban exports till further notice apparently to contain edible oil prices in their domestic market. "We have suggested our government initiate dialogue with Indonesian counterparts at the highest diplomatic level on the cooking oil export ban.
Onions had the highest inflation rate among all major commodities.
Reversing its very short upward trend, inflation fell by 0.23 per cent to touch about two-year low of 4.10 per cent for the week ended June 18 even as food items and manufactured products become costlier.
In October, CPI inflation was 5 per cent.
Analysts remain selective on cement stocks amid the likely government's capex push ahead of the scheduled general elections in May 2024. While UBS has initiated coverage on the Indian cement sector with an anti-consensus negative view and suggests investors sell select cement stocks on a rally, those at Nomura remain selectively bullish on the sector and prefer companies with large brownfield optionality and multi-region presence. In the near-term, UBS expects strong earnings of cement companies in the next two quarters to be driven by robust demand and margin tailwinds, but suggests any sharp uptick in stock prices could offer a good opportunity for booking profits in the related counters.
RBI targets to keep inflation at 4 per cent, (+/- 2 per cent), and its rise beyond this comfort zone will put pressure on the central bank to hike rates.
More rate cut by RBI unlikely this fiscal, say Ind-Ra
In case of onions, inflation skyrocketed to 127.04 per cent, while for the eggs, meat and fish segment the rate of price rise was 5.76 per cent.
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Indian economy is seeing signs of upward momentum helped by gradual reduction of inflationary pressure though the country's growth still remains "relatively weak", according to Paris-based think tank OECD.
The Central bank primarily factors Consumer Price Index while deciding on policy rate.
India economy clocked a five-year high growth rate of 7.6 per cent in 2015-16.
According to the global financial services major, the Consumer Price Index based inflation is peaking off and is expected to be around 7.5-8 per cent in September.
Total debt for listed Indian companies excluding financials fell only 4 per cent to $368 billion in the year ended in March 2015.
India's manufacturing sector activity contracted for the third straight month in October amid falling levels of production and new orders, as the business climate within the country remained tough, an HSBC survey said on Friday.
A careful reading of the national income accounts suggests that after a strong recovery from the pandemic, there has been a significant ebbing of dynamism over the last three quarters to more modest levels recently, note Arvind Subramanian and Josh Felman.
The consumer price index has been in double digits for much of the past year, and was 9.8 per cent in September.
In many states, aggregators operate without a licence; in others, with the risk of the licence being revoked by any regional transport office on the slightest pretext.
Factory output, measured in terms of Index of Industrial Production, showed an improvement mainly because of an uptick in mining and manufacturing production and larger offtake of capital goods.
According to the global financial services major, inflation may remain sticky, with a possible El Nino effect on the monsoon likely to push up food prices and geopolitical uncertainties seen pumping up global commodity rates.
Pulses cropping has jumped to 39.4 per cent above 2015 levels.
Prices have continued to move up in Delhi's markets, wholesale and retail, on supply worries and spoilage due to record cold weather.
Food prices are also expected to move up due to the poor monsoons.
Monetary Policy- Easing expected to happen later this financial year.
Inflation dipped to a five-month low of 5.19 per cent in July mainly on account of decline in prices of some food articles, vegetables and protein rich items.
Benchmark equity index Sensex and Nifty gave up early gains and ended lower on Monday as investor sentiment was hit due to unabated foreign fund outflows and losses in index heavyweights Reliance Industries and HDFC Bank. The 30-share BSE Sensex declined 168.21 points or 0.28 per cent to settle at 60,092.97 as 15 of its constituents dropped. The barometer opened higher and touched a high of 60,586.77 in morning session. Later in the day, it fell 297.35 points or 0.49 per cent to 59,963.83.
Spiralling prices pinched the pocket of consumer as edible oil, fuel and many other commodities turned dearer this year amid pandemic-induced disruptions but the inflationary pressure is anticipated to ease, though marginally, in the coming months. As consumers, at retail as well as wholesale levels, are willy-nilly learning to live with the new normal of curbs to contain the spread of coronavirus infections, experts are of the view that elevated inflation is likely to stay longer. After dealing with the devastating blows from the second COVID wave, especially during the April-June period, the economy is well on the revival path but the emergence of Omicron might unsettle the recovery trajectory in the short term.
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