May Inflation At 7.55%, Markets React Negatively
Shrikant / 14 Jun 2012
Once again the inflation has risen in India. The May 2012 numbers at 7.55% indicate that the inflation in the country has increased on Month on Month basis. The April 2012 inflation was at 7.23%. The street expectations for April were 7.4%. The core inflation number is at 4.99% which still gives a as room for RBI to cut the repo rate.
The markets have reacted negatively and some profit booking was seen on the street. The markets were seen taking the pressure of WPI data right from the morning. After the numbers were announced Sensex fell 100 points however it shown some recovery immediately. It is now trading with 0.17% decline. The 50 share Nifty index is also trading with loss of 0.24%.
Meanwhile Deutsche Bank has said that there won’t be major recovery in the global markets in the second quarter of this fiscal.
The European markets have opened in negative. The impact of the Italy bond auction, Spain downgrade and Greece election is highly evident on the indices. Asian peers are also seen in pressure. In Europe the mobile phone giant, Nokia has said that it will cut 10000 jobs due to quarterly losses.
| Benchmark Indices | Current Value | Change (%) |
|---|---|---|
| FTSE 100 | 5,467 | -0.31% |
| CAC 40 | 3,022 | -0.25% |
| DAX | 6,131 | -0.35% |
| Hang Seng | 18,825.00 | -1.06% |
| Shanghai | 2,405.00 | -0.99% |
| Nikkei | 8,569.00 | -0.22% |
| SENSEX | 16,851.26 | -0.17% |
| NIFTY | 5,109.20 | -0.24% |
Back home on the sectoral front FMCG, IT, Teck and Metals are trading in green while rest all indices are trading with losses. Maximum beatings are taken by CG, Bankex, Power and Realty.
Among the Sensex stocks, ITC and Infosys are the only two stock up over 1%. L&T has lost as much as 3.13%. Shares of NTPC are also down 3%. ICICI Bank, Tata Motors, SBI are down 2% each. Private sector power company Tata Power has put on hold its imported coal-based 2400 megawatt project in Maharashtra. Company is assessing the regulatory environment in the Indian and coal exporting countries. The financial shares of Tata Power are down 2%.
Shares of Subex have surged by over 2% as company has successfully restricted its FCCBs. Shares of Henkel India have surged over 15 per cent over the news of proposal of merger with Jyothy Laboratories. Shares of Jyothy are also up 3%
Shares of fertilizer companies which were up on the news that CCEA would allow price hike in Urea, have come down.
The overall market breadth is negative since more shares have declined.
In conclusion we expect the market to remain volatile ahead today.
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