On a month-on-month basis, the WPI was 0.07% higher, with primary articles rising 0.22% and the Food Index up 0.17%.
| Photo Credit: PTI

India’s wholesale price inflation moderated to a four-month low of 0.2% in February from 0.27% in January, despite an acceleration in food and primary articles’ inflation rates, owing to a sharper year-on-year drop in manufactured products and fuel and power prices.

The Wholesale Food Index (WPI) picked up from 3.8% in January to 4.1% in February, while primary articles’ prices rose 4.5%, compared with 3.84% in the previous month. On a month-on-month basis, the WPI was 0.07% higher, with primary articles rising 0.22% and the Food Index up 0.17%.

Eight of 10 primary food articles recorded higher price rise than January, with five items recording double-digit inflation, including vegetables (19.8%), onion (29.22%), pulses (18.5%) and paddy (10.25%). Potato prices recorded a 15.3% spurt, after at least five months of deflation.

Cereals and wheat inflation hit a three-month high of 6.6% and 2.3%, respectively. Fruit prices dropped 4% in February, while eggs, meat and fish recorded a 0.47% year-on-year decline in prices, the mildest dip in three months. 

Fuel and gas prices

Among non-food primary articles, crude petroleum inflation surged to a 14-month high of 16.65%. LPG prices which have been slashed by ₹100 earlier this month, rose 3.8% in February, compared to 0.4% in January. However, overall fuel and gas prices were 1.6% lower than February 2023, marking the sharpest deflation rate in three months.

Eight of 14 manufactured products’ categories recorded price drops from last February, with the overall segment seeing a 1.27% decline in prices, the steepest since October 2023. 

February marks the fourth successive month that the WPI has risen on a year-on-year basis, after seven months of deflation. The Commerce and Industry Ministry raised the wholesale inflation rate for December 2023 to 0.86% from the 0.73% uptick estimated earlier.

“Positive rate of inflation in February, 2024 is primarily due to increase in prices of food articles, crude petroleum & natural gas, electricity, machinery & equipment and motor vehicles, trailers & semi-trailers,” the Ministry said in a statement.

Representational image only.
| Photo Credit: Reuters

Benchmark equity indices tumbled in early trade on October 9 as escalating tensions in Middle East triggered a risk-off in the market.

Market analysts said investors preferred to remain on the sidelines and refrained from taking big risks as the Israel-Hamas conflict has introduced a huge uncertainty for the markets The 30-share BSE Sensex plunged 407.19 points or 0.62% to 65,588.44 points in early trade. The Nifty declined 142.70 points or 0.72% to 19,510.80 points.

State Bank of India, Tata Steel, Titan, IndusInd Bank and Asian Paints were among the major laggards. On the other hand IT majors HCL Technologies, Tech Mahindra, TCS, Wipro and Infosys, Hindustan Unilever and Sun Pharma defied the broader market trend and were trading in the positive territory.

The BSE benchmark had climbed 364.06 points or 0.55% to settle at 65,995.63 points on Friday. The Nifty had advanced 107.75 points or 0.55% to end at 19,653.50.

“The Israel-Hamas conflict has introduced a huge uncertainty for the markets. Nobody knows how this war is going to evolve,” V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

He said that even though it is unlikely to cause major disruption in oil supplies at present, the situation will change if Iran, a major Hamas supporter, is drawn into the war. “That can disrupt oil supplies causing a spike in crude, which can trigger a risk-off in the market. This is a time to be cautious,” he added.

Traders are also expected to remain cautious ahead of macroeconomic data to be announced later this week. The industrial production and manufacturing data for August are scheduled to be announced on October 12. Simultaneously, inflation rate for September will be announced followed by Wholesale Price Index (WPI) data on October 13.

On Friday, the Reserve Bank of India expectedly left its key interest rate unchanged and signalled it would keep liquidity tight using bond sales to bring prices closer to target.

The six-member monetary policy committee of RBI held the benchmark repurchase rate (repo) at 6.50% in a unanimous decision for the fourth consecutive meeting in a row. It also retained a ‘withdrawal of accommodation’ stance. Asian markets are trading lower on Monday as Chinese and Hong Kong shares fell.

European markets finished broadly higher on Friday with Germany’s DAX gaining 1.06%. France’s CAC 40 was up 0.88% and London’s FTSE 100 closed 0.58% higher.

The U.S. markets ended higher on Friday with S&P 500 closing with a gain of 1.18% and Dow Jones Industrial Average Index up 0.87%.

Meanwhile, global oil benchmark Brent crude witnessed a sharp rise of 3.68% to $87.69 a barrel on Monday. Foreign Institutional Investors (FIIs) offloaded equities worth ₹90.29 crore on Friday, according to exchange data.

Image used for representational purpose only.
| Photo Credit: Reuters

The wholesale price based inflation remained in the negative territory for the fourth straight month in July at (-)1.36% on easing prices of fuel, even though food articles turned costlier.

The wholesale price index (WPI) based inflation rate has been in the negative since April and was (-)4.12% in June. In July last year it was 14.07%.

Inflation in food articles skyrocketed 14.2% in July against 1.32% in June.

“Decline in the rate of inflation in July, 2023 is primarily contributed by fall in prices of mineral oils, basic metals, chemical & chemical products, textiles and food products,” the commerce and industry ministry said on August 14.

Fuel and power basket inflation eased to (-)12.79% in July from (-)12.63% in June.

In manufactured products, the inflation rate was (-)2.51% as against (-)2.71% in June.

The RBI last week kept interest rates unchanged at 6.5% for the third straight meeting but signalled tighter policy if food prices drive inflation higher.

“The job on inflation is still not done,” RBI Governor Shaktikanta Das had said.

“Inflationary risks persist amidst volatile international food and energy prices, lingering geopolitical tensions and weather-related uncertainties.”

The RBI raised its inflation forecast for the current financial year ending March 2024 to 5.4% from 5.1% earlier, citing pressures from food prices.

The Central bank takes into account retail or consumer price index based inflation for formulating monetary policy. Retail inflation data for July is scheduled to be released later in the day.