IN­DIAN STOCK IN­DICES JUMP ON GLOBAL CUES

Re­cov­ery in ru­pee, eas­ing of food prices also help Sen­sex and Nifty to surge

The Gulf Today - Business - - FRONT PAGE -

MUM­BAI: The bench­mark S&P BSE Sen­sex reclaimed the 38,000 mark on Fri­day, sup­ported by a re­cov­ery in the ru­pee and pos­i­tive sen­ti­ments in global stock mar­kets.

The NSE Nifty50 also surged and con­sumer durables stocks led the in­crease in the mar­ket.

The In­dian ru­pee on Fri­day re­cov­ered af­ter the re­cent slump and the ru­pee traded around 71.81 per US dol­lar, against the pre­vi­ous close of 72.19 per dol­lar.

Glob­ally eq­uity mar­kets traded higher af­ter re­ports said that the US and China may hold fresh talks on trade tar­iffs is­sue.

Fur­ther, the Whole­sale Price In­dex for Au­gust, re­leased on Fri­day, eased to 4.53 per cent from 5.09 per cent in July, which firmed up the do­mes­tic in­vestor sen­ti­ment.

In­dex-wise, the wider Nifty50 on the Na­tional Stock Ex­change closed at 11,515.20 points, higher by 145.30 points or 1.28 per cent from its pre­vi­ous close.

The S&P BSE Sen­sex, which had opened at 37,939.29 points, closed at 38,090.64 points, higher by 372.68 points or 0.99 per cent than the pre­vi­ous close of 37,717.96 points.

Sen­sex touched a high of 38,125.62 points and a low of 37,859.52 points dur­ing the day’s trade. The mar­kets re­mained closed on Thurs­day on the occasion of a Hindu fes­ti­val.

WHOLE­SALE PRICES

A mas­sive fall in food prices and cost of pri­mary ar­ti­cles eased In­dia’s an­nual in­fla­tion rate based on whole­sale prices to 4.53 per cent in Au­gust from a 5.09 per cent rise in July.

How­ever, on a year-on-year (YOY) ba­sis, the Whole­sale Price In­dex (WPI) fur­nished by the Min­istry of Com­merce and In­dus­try on Fri­day was still higher than 3.24 per cent re­ported for the cor­re­spond­ing pe­riod of 2017.

“Build up in­fla­tion rate in the fi­nan­cial year so far was 3.18 per cent com­pared to a build up rate of 1.41 per cent in the cor­re­spond­ing pe­riod of the pre­vi­ous year,” the Min­istry state­ment said here.

On a se­quen­tial ba­sis, the ex­penses on pri­mary ar­ti­cles, which con­sti­tute 22.62 per cent of the WPI’S to­tal weigh­tage, slipped by (-) 0.15 per cent, from an in­crease of 1.73 per cent in July.

Sim­i­larly, the prices of food ar­ti­cles dipped. The cat­e­gory has a weigh­tage of 15.26 per cent in the WPI in­dex. It de­flated by (-) 4.04 per cent from a rise of (-) 2.16 per cent.

In­ter­est­ingly, the cost of fuel and power cat­e­gory, which com­mands a 13.15 per cent weigh­tage, in­creased at a slower pace of 17.73 per cent from a growth of 18.10 per cent.

How­ever, ex­penses on man­u­fac­tured prod­ucts reg­is­tered a rise of 4.43 per cent from 4.26 per cent.

Even as the coun­try’s re­tail in­fla­tion cooled off in Au­gust, an Oc­to­ber rate hike by the Re­serve bank of In­dia (RBI) is im­mi­nent, a SBI Ecowrap re­port said.

“Even though CPI (Con­sumer Price In­dex) in­fla­tion has cooled off, we be­lieve Oc­to­ber rate hike of 25 bps is im­mi­nent, but the ques­tion is whether the mag­ni­tude of rate hike could be even higher by 25 bps (say 50 bps),” the re­port said.

“A cur­rency cri­sis by logic calls for a big­ger rate in­ter­ven­tion, but given that RBI is now an in­fla­tion tar­get­ing cen­tral bank, it will be re­ally dif­fi­cult to jus­tify such ac­tion with in­fla­tion num­bers con­tin­u­ing to be in 4-4.7 per cent range through cur­rent fis­cal, with the down­side at sub 3.5 per cent in Novem­ber 2018”, it said.

Reuters

A ven­dor at a veg­etable mar­ket in Mum­bai. Lower food prices ease In­dia’s Whole­sale Price In­dex in Au­gust.

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