WPI dips to single digit in Oct at 19-month low
The rupee opened at 80.53, but pared gains and settled at 81.26 against the dollar
NEW DELHI: The wholesale price index-based inflation dipped to a 19-month low of 8.39 per cent in October on easing prices of food, fuel and manufactured items.
Declining for the fifth consecutive month, WPI inflation cooled to single digit after a gap of one-and-a-half years, giving some comfort to the Reserve Bank of India which has been struggling to rein in price rise.
Releasing the WPI inflation data on Monday, the commerce ministry said: “The decline in October inflation is primarily contributed by fall in the price of mineral oils, basic metals, fabricated metal products, except machinery and equipment; textiles; other non-metallic mineral products; minerals etc.”
Since April 2021, WPI inflation remained in double digits for 18 months with September print at 10.79%. The earlier single-digit WPI inflation was in March 2021 at 7.89%.
MUMBAI: The rupee depreciated by 48 paise against the US dollar on Monday over its last close, tracking the recovery in the American currency even as benchmark indices ended low on Monday.
At the interbank foreign exchange market, the local unit opened on a strong note at 80.53, but pared gains and finally settled at 81.26 against the American currency.
On Friday, the rupee had appreciated by as much as 62 paise to close at 80.78 against the dollar.
“The rupee depreciated on recovery in US dollar and weak domestic markets. However, the rupee opened higher on upbeat macroeconomic data,” according to Anuj Choudhary. research analyst at Sharekhan by BNP Paribas.
India’s industrial production expanded by 3.1% in September, boosted by manufacturing, mining and power sectors, according to official data released on Friday.
“Overall weakness in the dollar amid rising expectations of the not-so-aggressive US Federal Reserve may also support the rupee at lower levels. Sustained foreign institutional investor (FII) inflows may also support the rupee,” Choudhary said.
FIIs were net buyers on Friday as they bought shares worth ₹3,958.23 crore, according to exchange data.
“However, higher crude oil prices may cap any sharp upside,” Choudhary said.
International oil benchmark Brent crude was trading 0.16% lower at $95.84 per barrel.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.59%to 106.91.
Benchmark indices ended low on Monday, dragged down by index heavyweights amid largely weak Asian markets.
The 30-share BSE Sensex declined 170.89 points or 0.28% to settle at 61,624.15. During the day, it hit a low of 61,572.03 and a high of 61,916.24.
The broader NSE Nifty dipped 20.55 points or 0.11% to finish at 18,329.15.
Dr Reddy’s, ITC, Hindustan Unilever, State Bank of India, ICICI Bank, Nestle, Titan, Mahindra & Mahindra, Larsen & Toubro, and Reliance Industries
were among the biggest laggards.
Kotak Mahindra Bank, Tata Steel, Power Grid, IndusInd Bank, Infosys, and Maruti were the major winners.
Caution prevailed on Monday after a top US Federal Reserve policymaker warned that the central bank would not “soften” its fight against inflation.
Japan’s Nikkei index closed lower from a two-month high as investors booked profits and market heavyweight SoftBank Group tumbled after its investment arm reported another big quarterly loss. The Nikkei share average ended 1.06% lower.
Chinese stocks got a boost as plans for a sweeping rescue package to bail out developers sent property stocks rallying. The Hang Seng China gauge opened 4.6% higher on Monday before ending the session up nearly 2%.
The Shanghai Composite Index pared its morning gains towards the end to close with a marginal loss of 0.13%.
European shares edged higher as miners rose on China demand hopes.
The pan-European STOXX 600 index was trading up in the morning session after recording its biggest weekly gain in nearly eight months on Friday.