New Delhi: Inflation climbed up again for the week ending Friday, June 6, touching 8.24 per cent from last week's 8.1 per cent.
A first look at the analysis of the figures shows food articles – particularly imported edible oil - have pushed up the numbers.
The market was estimating the figure to settle at 8.25 per cent and the primary reason behind the surge is the spiraling edible oil prices, up 6 per cent.
Non-food articles were up 0.5 per cent, while the commodities were up 0.1 per cent.
The key is how inflation will pan out in the coming weeks, given the increase in petrol, diesel, LPG and ATF prices recently.
Inflation for the week ended March 29 was revised upwards to 7.75 per cent from 7.41 per cent. Wholesale inflation is now at its highest since Aug. 28, 2004 when it stood at 8.74 per cent. The annual inflation rate was 5.15 per cent 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 published weekly.
Soon after the figures came out, Finance Minister P Chidambaram said rising inflation was a problem and the surges were due to relentless rise in crude oil and commodity prices.
He also added the Government will take more measures to tame inflation.
Shares choppy
The Sensex pared early gains of more than 1 per cent in choppy trade on Friday, as high inflation, slowing growth and rising foreign fund outflows kept investors jittery.
Weekly inflation data due at noon is expected to show annual inflation in late May at 8.3 per cent, its highest since August 2004, a Reuters poll showed on Thursday. A 10 per cent increase in state-set prices of petrol and diesel on Wednesday is expected to push the inflation rate to a 13-year high above 9 per cent in early June. "People are not taking fresh positions because of these fears," said K.K. Mital, CEO at Escorts Mutual Fund.
"It's a wait and watch policy." Foreign funds have dumped $527 million of stocks in the first three trading days this week, taking their total outflow this year to nearly $4.5 billion. At 10:57 a.m., the 30-share BSE index was up 0.36 per cent, or 56.21 points, at 15,825.93, with 14 components falling. The index started 0.9 per cent higher, rose as much as 1.3 per cent before turning negative for some time. In the broader market, 1,297 gainers were ahead of 754 losers on 69.2 million shares. Top private firm Reliance Industries and mortgage lender Housing Development Finance Corp were leading the gains. Reliance rose 0.6 per cent to 2,260.50 rupees, while HDFC added 1.8 per cent to 2,435 rupees. Leading explorer Oil & Natural Gas Corp was trading 1.8 per cent down at 936.30 rupees on profit taking, after rising more than 13 per cent in the last two days as the fuel price increase is expected to lower the state-run firm's discount burden.
State-run refiners Indian Oil Corp rose 1.8 per cent to 399.20 rupees, Bharat Petroleum gained 1.5 per cent to 305.80 rupees and Hindustan Petroleum added 0.7 per cent to 221.90.
All three had fallen sharply in the last two days after the fuel price increase was seen as giving only a brief respite to them. The 50-share NSE index was up 0.28 per cent at 4,689.85. Elsewhere in the region, Karachi's 100-share index was down 1.71 per cent at 12,831.10, while Colombo's All-share index fell 0.21 per cent to 2,511.15.
Shares in low-cost airline SpiceJet Ltd rose as much as 19.3 per cent after a newspaper reported that Anil Dhirubhai Ambani Group was in talks to acquire it. The stock was trading 13.9 per cent up at 35.75 rupees at 1030 hrs (IST).
(With Reuters inputs)
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