Millennium Post

December retail inflation at three-month low of 9.87%

Inflation as measured by the consumer price index (CPI) for November has been revised marginally downwards to 11.16 per cent from preliminary estimate of 11.24 per cent.

Vegetable prices on annual basis rose 38.76 per cent in December, a slower pace than 61.6 per cent recorded in the previous month, as per the official data released Monday. Fruit prices rose 14.64 per cent compared to 15 per cent in November.

Pulses were dearer by 2.15 per cent, cereals by 12.14 per cent and milk products by 9.87 per cent in December. Protein-rich items such as eggs, meat and fish became dearer by 12.64 per cent in December as compared to 11.96 per cent in the previous month.

Inflation in the food and beverages segment was 12.16 per cent as against 14.72 per cent recorded in November. The retail inflation was in double digits in October and November.

The data showed that the provisional inflation for rural and urban areas for December was 10.49 per cent and 9.11 per cent, respectively.

Data on inflation based on the wholesale price index is scheduled for release on Tuesday. The Reserve Bank, scheduled to announce its monetary policy review on 28 January, has kept policy rates unchanged expecting that inflation, both consumer and retail, would ease.

The key policy rate (repo) was hiked twice between September and November to check inflation. With industrial growth slowing to six-month low in November, there has been a huge clamour from the industry for a reduction in policy rates.

Due to the visible friction between the RBI and the industry against the sticky inflation, with RBI battling against price rise and India Inc lamenting over growth numbers, 28 January policy meet would be the most-awaited one.

Sensex achieves 7-week high gain of 376 before price data

Mumbai: The benchmark Sensex surged 376 points on Monday, clocking its biggest gain in seven weeks, ahead of retail inflation figures and on expectations the US Federal Reserve would ease tapering after disappointing jobs data.

Investors also expect the Reserve Bank of India (RBI) to keep interest rates unchanged in a bid to support growth after the Index of Industrial Production contracted 2.1 per cent in November. There were hopes of inflation easing amid increased availability of winter crops.

There was buying across the board as 11 out of the 12 BSE sectoral indices advanced, led by IT, tech, oil and gas, banking and capital goods stocks. Only the healthcare index fell.

Heavyweights Infosys, TCS, Reliance Industries and ICICI Bank contributed the most to the gains in the Sensex.

The 30-share S&P BSE Sensex opened higher and stayed in positive terrain through the day. It ended at 21,134.21, a rise of 375.72 points or 1.81 per cent. It was the biggest gain since 25 November, when the index added 387.69 points.

The Fed said it would reduce its bond-buying programme, which has been a source of liquidity for most Asian and emerging markets, from this month. US employment rose at the slowest pace in three years in December, according to a government report.

‘Markets rose sharply on Monday, likely buoyed by the weak payroll data in US, which re-ignited optimism on the Fed taper programme. Expectations on the CPI inflation data which is due post-market hours, also kept the markets up,’ said Dipen Shah, Head - Private Client Group Research at Kotak Securities.

The 50-share CNX Nifty on the National Stock Exchange shot up 101.30 points, or 1.64 per cent, to 6,272.75.
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