India's inflation rate slips into negative zone

For the first time since the new wholesale price index (WPI) series started in 1995, India's annual rate of inflation has turned negative, falling to minus 1.61 percent for the week ended June 6, leading to fears that this would lead to hoarding of food articles.

New Delhi, June 18 (IANS) For the first time since the new wholesale price index (WPI) series started in 1995, India's annual rate of inflation has turned negative, falling to minus 1.61 percent for the week ended June 6, leading to fears that this would lead to hoarding of food articles.


The inflation rate, which was 0.13 percent in the previous week, had last turned negative in 1977.

The WPI for all commodities rose 0.04 percent primarily due to a rise in the indices for non-food articles, manufactured products, and fuel, power, light and lubricants, showed data released by the commerce and industry ministry Thursday.

While the index for primary articles declined 0.7 percent, that for fuel and power rose 0.7 percent. The index for manufactured products rose 0.1 percent.

The final data for the week ended April 11 showed that the revised annual inflation rate actually stood at 0.96 percent as against 0.26 percent reported earlier based on provisional figures.

Sri Ram Khanna, the head of the commerce department at Delhi School of Economics, said 'the negative inflation was expected' and attributed it to static demand and adequate supply of commodities.

He was also of the view that the inflation figures would fluctuate and would revive only during the festive season around October this year.

Dalip Kumar, head of projects at the National Council of Applied Economic Research (NCAER), a Delhi-based think tank, said the inflation rate turning negative would lead to hoarding of food commodities.

'Demand is low. Traders will now begin hoarding and black marketing food items like fruits, vegetables and cereals. The government will have to take some steps,' Kumar told IANS.

Source : India Forums.

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Inflation rises to 0.61% on higher food prices

New Delhi, May 21 Inflation edged up in early May on account of higher food prices, but held near a three-decade low, giving more freedom to the RBI to take steps to support a slowing economy.

The annual Wholesale Price Index-based inflation rose 0.61 per cent during the week ended May 9, higher than 0.48 per cent during the previous week. The increase in headline inflation was primarily on account of food articles, with year-on-year inflation in items such as vegetables (21 per cent), cereals (12 per cent) and pulses (15 per cent) continuing to remain in double digits.

Wholesale prices may exhibit a declining trend for a few weeks in the coming months, though that does not mean India is in the grip of deflation, the RBI Governor, Mr D. Subbarao, had said last week.

Headline inflation has held below 1 per cent for two months, after reaching a 16-year high of 12.91 per cent last August.

Source - The Hindu Business Line.

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Inflation eases further to 0.18 per cent

Inflation eased to 0.18 per cent, the lowest ever in the last three decades, even as prices of food articles like pulses, cereals and vegetable hardened during the week ended April 4.

The wholesale price-based index declined by 0.08 per cent against 0.26 per cent in the previous week. The decline was mainly due to higher base effect and falling prices of some manufactured products. The inflation stood at 7.71 per cent in the same wee k a year ago.

The consistent decline in inflation but rising food prices present a difficult choice before the RBI to cut policy rates or not even as the industry clamours for easing of interest rates.

During the week, prices of food items like vegetable, pulses and imported edible oil were expensive during the week. Even the jet fuel, naptha and other fuel items were dearer during the week. - PTI

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Inflation eases to 0.26 per cent

Inflation declined to 0.26 per cent, the lowest ever in more than three decades, for the week ended March 28 mainly on account of food items and mineral products, fuelling expectations of rate cuts by the Reserve Bank.

The wholesale price-based index declined by 0.05 percentage points against 0.31 per cent in the previous week.

During the week, the minerals group declined by a whopping 11.8 per cent due to prices of fire clay going down 19 per cent, iron ore 14 per cent, and chromite two per cent.

Prices of some food items like tea have declined. But the fuel index remained unchanged at its previous week's level of 320.9.

However, manufactured items like imported edible oil were dearer by six per cent, benzene by 14 per cent, and enamelled copper wires by 9 per cent. - ET.

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Inflation slips to seven-year lows at 2.43%

Continuing its southward journey, inflation slipped below 3% to 2.43% during the week ended February 28 from 3.03% a week earlier.

The WPI number for week-ended January 3 has been revised to 5.33% versus 5.24%.

Earlier a Reuters poll showed that the inflation rate was expected to have fallen to near seven-year lows at the end of February, following lower prices of manufactured goods and food articles.

The median forecast of 10 analysts was for a 2.34% rise in the wholesale price index in the 12 months to February 28, compared with a rise of 3.03% in the previous week.

Inflation was at 2.18% on June 8, 2002. Its lowest ever was 1.13% on Feb 2, 2002.

The RBI had forecast annual inflation to be below 3% by the end of the fiscal year on March 31, with some analysts predicting deflation by mid-2009. The RBI had recently cut its policy rates by 50 basis points to their lowest since they were introduced in 2000.

Axis Bank has also said in a note recently that India’s most commonly watched barometer for inflation is expected to fall to zero percent by end March 2009 following a cut in factory gate duties, aviation turbine fuel prices and a base effect. - Economic Times.

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Indian annual inflation at 3.92 pct on Feb. 7

ndia's wholesale price index rose 3.92 percent in the 12 months to Feb. 7, below the previous week's annual rise of 4.39 percent, government data showed on Thursday.

It was below a median forecast in a Reuters poll of analysts of 4.01 percent.

The annual inflation rate was 4.98 percent during the corresponding week of the previous year.

Source - Reuters.

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Inflation to 11 months low of 5.07 percent

Inflation data was released yesterday , it is just .05 percent to go below 5 percent , it has come at 5.07 percent in 12 months to 24 January 2009,which is almost 0.60 percent down compared to previous week raised of 5.64 percent.

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A marginally of 5.6% in Inflation.

Having moved southward for a few weeks, inflation rose to 5.6% for the week ended January 10 from 5.24% a week earlier.
Earlier a Reuters poll predicted that the inflation rate was expected to have fallen to an 11-month low in the second week of 2009., triggered by a fall in the prices of manufactured goods.

The median forecast of 14 economists was for 5.05% rise in the wholesale price index in the 12 months to January 10, compared with 5.24% in the previous week.

Analysts said an eight-day truckers strike in early January would have pushed up the food price index and slowed the decline in the inflation rate.

Inflation raced into double digits in June last year after the government raised fuel prices. It peaked at 12.91% in early August, forcing the RBI to raise the repo rate to a seven-year high of 9%.

But since mid-October, the RBI has cut the repo rate by 350 basis points as the global financial crisis and high borrowing costs took a toll on economic growth.

Many analysts expect the inflation rate to fall below 2% by the end of March, sharply off the RBI's target of around 7%. - ET

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Inflation at 5.24 pct.

India's wholesale price index rose 5.24 percent in the 12 months to Jan. 3, below the previous week's annual rise of 5.91 percent, government data showed on Thursday.

It was marginally below a median forecast in a Reuters poll of analysts of 5.28 percent.

The annual inflation rate was 4.26 percent during the corresponding week of the previous year.

The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is released weekly. - Reuters

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Inflation lower at 5.91%.

India’s inflation slowed to a 10- month low, giving policy makers room to implement further measures to stimulate economic growth without fanning prices. Wholesale prices rose 5.91 percent in the week to Dec. 27 from a year earlier after gaining 6.38 percent the previous week, the commerce ministry said in New Delhi today. Economists expected an increase of 6.14 percent. - Bloomberg.

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What to do Intrest rates are going down ?

So you quickly repaid a big part of your home loan because the interest rates went up did you? Welcome to the world of fluctuating interest rates!

Interest rates play an important role in your personal finances. The RBI tries to raise or lower key interest rates that trickle down and affects everything - from your housing equated monthly installment (EMI) to the interest rates on your savings bank account.

As rates begin to fall, what should you do?

Accept that experts also only guess!

First of all it is necessary to understand that interest rates are a function of inflation, interest rates in other countries, money supply, government spending, government policy, demand and supply of money - from businesses and households, etc.

Even for experts being able to predict the US meltdown, the slowing down of growth in Asia, Brazil, etc. is not really easy. So generally they take a 2-3 month view - which is not useful when you are planning investments for the next few decades!

Planning for interest rate changes requires that you understand why RBI makes these decisions in the first place. In a democracy (in an election year that too!) governments are particularly sensitive to inflation. So the RBI is pressurized to reduce inflation - by sucking our liquidity in the market. Interest rates increase in an effort to make borrowing money less-attractive and slow a rapidly growing economy. Exactly the reverse is done to make the economy go faster! Lowering the rate will make money flow more freely and hopefully stimulate economic growth.

Not always a blessing!

When interest rates go down, there is a sense of happiness amongst the consumers. Please remember you are a producer too! Decreasing interest rates is normally in response to a slowing economy. As we have seen the last few months have not been kind to anybody`s portfolio. All asset classes have done badly - we are only measuring how badly. If somebody told you cash is king, well it is because the others are paupers! Remember somewhere in your family your father, father-in-law, mother etc. are worried about lower bank interest rates.

Your strategy does not change!

Will you buy a bigger car because petrol prices have come down by Rs 5 a liter? Exactly so for your interest rates coming down. If you have a lot of debt, tackle the highest interest rate loans first. It still makes sense to cut down on loans. Especially if you realize that last years` bonus figure is now in the history books. If your HR does not call you to ``discuss`` a voluntary separation, treat that as a bonus! A rate change by RBI does not automatically reduce your interest rates.

Call your bank and ensure that your housing loan, credit cards, personal loans, etc. are all charged at a lower rate. A consumer is no longer the king unless he/she is well informed! Also realize ``we will get back to you``, ``we are examining your requests`` are all nice answers which actually does not reduce your debt! Try refinancing your loans if you must. Act tough - a few ``reputed`` organizations need more than a nudge to change!

Floaters rejoice!

For those who are looking to buy an asset (on borrowed money), or those on a floating rate already, decreasing rates is certainly a good thing. While housing EMI rates aren`t directly linked to RBI`s rate cuts, the signaling surely helps. Of course, do not get carried away and buy a house much bigger than what you actually need. Even those of you who have kept your savings in floating rate funds are now getting a higher return on your monies. If you already own a home and purchased it when the rates were a bit higher, this could be an opportunity to refinance. Even being able to reduce your borrowings by One point of interest can make a lot of difference, in the total price that your asset!

What about your savings?

Clearly, low interest rates are great for borrowing money, but when it comes to trying to earn money on your savings, it isn`t to your advantage. However, if you have invested in HDFC Prudence or Templeton India Pension Plan, the debt portion would have appreciated in the last couple of weeks - a falling interest rate regime is benign for older portfolios. However, it will not happen continuously unless the interest rates keep falling. If your bank fixed deposit rates are dropping you should quickly tie-up for 18-36 months. Banks are as likely to reduce fixed deposits as they have done on home loans. You could perhaps look at some Income funds - with a 2-3 year view! Instead of a savings account, you should look at a floater fund or a liquid fund if you are not sure of how long you want to keep the monies there - Income funds have an exit load! Also remember dividend distribution tax, short term capital gains tax and income tax while dealing with savings. Investments on the other hand are more tax efficient. My IRIS.

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Weekly News letter.

Last week markets remained up due to good global cues.

I was shocked as US (Obama) is giving Pakistan 100 billion $ loan for its economic upliftments. US is actually playing double sided game. It is giving Pakistan this amount as it has supported its Afghanistan base.

The Satyam and Maytas deal was called off for which Satyam had to shed its 590 cr from its market cap in one single day.

Inflation is cooling down and now it has settled at 6.84%. This is mainly because of fall in the commodity prices.

If we go to see FII’s were neutral during the week.

The week ahead will be a challenging one as we have Christmas coming later a week ahead is New Year.

Stocks to look out for are.

Satyam computers – It has lost much from its market cap will start recovering. I expect a 10% recovery.

Reliance Infra – This stock is showing some bullishness so expect a 10% upside from these levels.

Suzlon Energy – Technically this stock is a great buy at present fro 5% upside.

Indian Hotels – They are starting its operation in new Taj Hotel just next to the destroyed one. So logically this is good news.

Happy Investing !

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Inflation at 6.84 percent.

India's annual inflation rate dropped to a nine-month low below 7 percent in early December, helped by falling fuel prices and raising the prospect of deeper interest rate cuts in coming weeks.

India's wholesale price index , its most widely watched inflation measure, rose 6.84 percent in the 12 months to Dec. 6, sharply below the previous week's 8 percent and lower than a Reuters estimate of 7.49 percent.

More readings on Reuters.

What do you think about our Economy cast your opinion/ comment.

Plz do that in Post a comment section.

Happy Investing.

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Inflation at 8%.

Inflation falls further more at 8%. Reutres Poll expected the same numbers.

Continuing its southward journey, the headline inflation fell further to 8 per cent during the week ended November 29 from 8.4 per cent a week earlier.

This is the slowest rise since mid-April when inflation was at 7.95 per cent. Inflation had surged into double digits in early June after an increase in state-set retail fuel prices, and peaked at 12.91 per cent on August 2, the highest reading since annual numbers in the current data series became available in April 1995.

However, while inflation has dropped to its lowest since April-end, the relentless rise in prices of food articles is emerging as a major concern.

Happy Investing.

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Inflation drops to 8.40%.

Inflation fell for the fourth consecutive week to almost a five-month low at 8.40%, providing space for RBI to cut interest rates to spur economic growth amid fears of moderation.

The wholesale price index declined by 44 basis points (bps) for the week ended November 22, from 8.84% a week ago.

The annual rate of inflation stood at 3.11% as on Nov. 24, 2007 i.e. a year ago. Index for primary articles group rose marginally by 0.1% from the previous week.

In a move to deal with the global slowdown, the prime minister-chaired committee on December 2, cleared a blueprint of a fiscal and monetary package for cash-starved housing, export and financial sectors.

Simultaneous packages for finance, export and housing sectors will be announced by the government and the Reserve Bank probably by the week-end.

The index for food articles group rose by 0.4% from previous week`s level due to higher prices of coffee (6%), fish-marine and masur (3% each) and rice, eggs, arhar, fruits & vegetables and gram (1% each). However, the prices of maize and bajra (3% each) and ragi and tea (1% each) declined.

Meanwhile, the index for non-food articles` group declined by 0.6% due to lower prices of raw rubber (17%) and raw cotton (1%). However, the prices of sunflower and raw silk (1% each) moved up.

The index for fuel, power, light and lubricants group declined by 2.3% due to lower prices of furnace oil (23%), aviation turbine fuel (14%), naphtha (13%), light diesel oil (11%) and bitumen (8%).

Index for manufactured goods declined marginally by 0.2%. Food products index declined by 0.9% on account of lower prices of oil cakes (7%) and soyabean oil (6%). However, the prices of gur and coffee powder (3% each) and sugar (1%) moved up.

Textile group index declined by 0.1% due to lower prices of texturised yarn (5%).

Whereas, the index for basic metals, alloys, and metal products group declined by 0.2% due to lower prices of pipes & tubes (5%) and steel ingots (plain carbon) (3%). However, the prices of zinc ingots (2%) moved up. 

The index for machinery and machine tools group declined by 0.1% due to lower prices of telephone instruments (46%).

The index for rubber and plastic products group declined by 0.2% due to lower prices of PVC fitting and accessories (11%).

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Inflation rate drops to 8.84% on cheaper fuel, metals

 The annual Wholesale Price Index-based inflation rose 8.84 per cent for the week ended November 15, marginally down from the previous week’s yearly rise of 8.90 per cent. The latest WPI inflation rate was the lowest reading since May 17 and well below early August’s peak of 12.91 per cent.

The official WPI for ‘All Commodities’ for the latest reported week rose by 0.04 per cent to 235.1 points, up from 235 points for the previous week. The annual rate of inflation, calculated on point-to-point basis, stood at 3.35 per cent during the corresponding week of the previous year.

Fish-Marine cheaper

The Primary Articles Group rose 0.1 per cent as the index for ‘Food Articles’ group rose by 0.1 per cent due to higher prices of moong, rice and bajra (3 per cent each), ragi (2 per cent) and masur, maize and fruits and vegetables (1 per cent each). However, the prices of fish-marine (12 per cent) and gram and tea (2 per cent each) declined.

Soyabean dearer

The index for ‘Non-Food Articles’ group rose marginally due to higher prices of soyabean (11 per cent), gingelly seed and castor seed (2 per cent each) and linseed (1 per cent). However, the prices of raw rubber (4 per cent), cotton seed groundnut seed and raw cotton (2 per cent each) and raw silk (1 per cent) declined.

The fuel, power, light and lubricants group index remained unchanged at its previous week’s level of 353.3 points. The Manufactured Products group rose by 0.05 per cent as the index for the ‘Food Products’ group declined by 0.1 per cent due to lower prices of cotton seed oil (5 per cent), imported edible oil (4 per cent), rice bran oil (3 per cent) and gur (2 per cent).

However, the prices of bran (all kinds) (5 per cent), gingelly oil (4 per cent), sooji (rawa) (2 per cent) and salt and atta (1 per cent each) moved up. The index for the ‘Textiles’ group rose by 1.0 per cent due to higher prices of cotton yarn-cones and hessian and sacking bags (4 per cent each), texturised yarn (2 per cent) and hessian cloth and cotton yarn-hanks (1 per cent each). However, the prices of synthetic yarn (2 per cent) declined.

The index for ‘Rubber and Plastic Products’ group declined by 0.2 per cent due to lower prices of PVC fitting and accessories (12 per cent). The index for ‘Chemicals and Chemical Products’ group rose by 0.3 per cent due to higher prices of acetylene (70 per cent) and oxygen (8 per cent). However, the prices of vitamin liquids (4 per cent) declined.

The index for the ‘Base Metals Alloys and Metal Products’ group declined by 0.6 per cent due to lower prices of ferro silicon (24 per cent), steel ingots (plain carbon) (16 per cent), basic pig iron and foundry pig iron (7 per cent each), zinc (3 per cent), steel sheets, plates and strips (2 per cent) and ms bars and rounds (1 per cent). However, the prices of joist and rolls and other iron steel (3 per cent each) moved up. - TheHinduBusinessLine

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Weekly news letter and Stocks to watch now.

Indian Stock Markets have witnessed a worst hit. Indian markets are now down over 57% from its peak. Its almost at its 3 years low.

Markets need a good breath now. Traders are worried and even Investors.

Recession has covered the whole globe.

No one has been left out. No fundamentals in markets as of now.

When I look at NIFTY charts I see an uptrend to come till 2780 in short term.

Indian markets will be the first to recover says SEBI cheaf CB Bhave.

Stocks you should look out are.

LNT - Plans to add 10,000 staff by 2010 and the stock has good fundamentals so a reason to buy its Support is at 665 and 711 and a resistance for upmove at 791 and 825.

Unitech - This is one of the most beaten out scrip 52 week High of 600 odd and low of 27 odd. Makes sense in buying and booking profits at 40 odd levels.

SBI - Inflation has cooled and if RBI takes some action in reducing the CRR or Repo Rate it will benefit and then makes sense to buy for short term.

ICICI - The same above reason apples and even if you go to see its is one of the most beeten out blue chip after DLF and Hindalco.

Sectors I am bullish on -

Infrastructure and Banking and later Metals.

All of these sectors have witnessed the worst hit ever so chances are there for these sectors to recover very fast.

Happy Investing .

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What happned in Indian Markets this week ?

The Full week was dull almost every day we saw a red stroke or a downtrend but an excellent pulback of 464 points on SENSEX i.e 5.5%. on Friday.

The whole week markets were mainly down because of bad global cues.

Inflation in single digits thats cool.

Crude Oil sliped below 50$ before recovering. Thats also good.

The bad news is worlds second largest economy JAPAN slips in recession.

Germany went in recession last week.

And the same job cuts news continue to rule.

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Inflation at 8.90 for week ended November 8.

Inflation fall marginally at 8.90 compared to 8.98 last week.

Inflation slipped to single digit after 21 weeks at the beginning of this month.

Analysts said a decline in global commodity prices, robust domestic agricultural output and a fall in demand in a slowing economy helped bring the rate to single-digits well ahead of earlier expectations.

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Inflation soon to come on MoM basis.

MoM here refers to Month on Month basis.

Indian gov. is soon going to introduce or release inflation numbers estimated and calculate on MoM basis (Month on Month) currently inflation is calculated on YoY basis (Year on Year). This is an attempt by Gov to give accurate inflation figures.

According to Gov. sources calculating inflation on YoY does not give a clear a picture of movement in price or change in prices.

I think this is a good attempt by government to give accurate picture of Inflation.

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