HOME         WEBSITE         SUBSCRIBE           E-GREETINGS   
                               

Thursday, February 05, 2009

Inflation at 5.07%

Downward curve

The wholesale index for all commodities has declined by 0.2% for the week ended 24 January 2009 compared with last week. The annual rate of inflation stood at 5.07% for the week ended 24 January 2009 compared with 5.64% last week. It is the slowest annual rise since 9 February 2008 last year when inflation was at 4.98%.

Earlier, inflation had fallen to an 11-month low of 5.24% on week ended 3 January, but an eight-day nationwide truckers' strike that pushed up food prices caused the inflation to rise in the next two weeks.

Primary and manufactured products, which are holding major share in all commodities, recorded fall on week on week basis.

The index for primary articles declined to 249 during the week ended 24 January 2009 compared with 249.1 during the last week. However food articles have registered 0.2% growth on week on week basis due to higher prices of maize (3%), rice (2%) and ragi, milk, condiments & spices and moong (1% each). However, the prices of fruits & vegetables and bajra (2% each) and arhar and coffee (1% each) declined.

Another major index in primary article, nonfood index recorded 0.7% fall on week on week basis due lower prices of raw rubber (6%), copra (5%), groundnut seed (3%) and gingelly seed (1%). However, the prices of raw silk (2%) moved up.

Fuel, power index have marginally contributing to inflation with 0.6% growth on week on week basis.

Manufactured index with the highest weight in overall WPI recorded 0.5% fall during the week ended 24 January 2009 compared with last week. However index for food products recorded 2.5% growth on week on week basis, followed by 0.2% increased in Beverages Tobacco & Tobacco Products. Textile group has registered 0.1% fall on week on week basis.

During the week ended 24 January 2009 inflation dropped compared with last week. Manufactured and primary articles are two major contributors for this downtrend.

The inflation number made headlines last year after it hit double digits. However from August 2008 inflation number has been declining and from November 2008 we have seen single digit inflation number. The recent cut in fuel prices shall drive the inflation rate further lower in the coming weeks.

The Reserve Bank of India (RBI) has also indicated in its monetary policy review on 27 January 2009 that annual inflation is expected to be below 3% by the end of the 2008/09 fiscal year in March.

In short, single digit rally will be continue due to fall in commodity prices across the glob and we will see further downtrend in inflation number for coming months.

Posted by

Blog Archive

____________________________________________________________________________________________

Disclaimer - All investments in Mutual Funds and securities are subject to market risks and uncertainty of dividend distributions and the NAV of schemes may go up or down depending upon factors and forces affecting securities markets generally. The past performance of the schemes is not necessarily indicative of the future performance and may not necessarily provide a basis for comparison with other investments. Investors are advised to go through the respective offer documents before making any investment decisions. Prospective client(s) are advised to go through all comparable products in offer before taking any investment decisions. Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the fund will be achieved. Information gathered & material used in this document is believed to be from reliable sources. Decisions based on the information provided on this newsletter/document are for your own account and risk.


In the preparation of the material contained in this document, Varun Vaid has used information that is publicly available, including information developed in-house. Some of the material used in the document may have been obtained from members/persons other than the Varun Vaid and which may have been made available to Varun Vaid. Information gathered & material used in this document is believed to be from reliable sources. Varun Vaid however does not warrant the accuracy, reasonableness and/or completeness of any information. For data reference to any third party in this material no such party will assume any liability for the same. Varun Vaid does not in any way through this material solicit any offer for purchase, sale or any financial transaction/commodities/products of any financial instrument dealt in this material. All recipients of this material should before dealing and or transacting in any of the products referred to in this material make their own investigation, seek appropriate professional advice.


Varun Vaid, shall not liable for any loss, damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be fully responsible/are liable for any decision taken on the basis of this material. All recipients of this material should before dealing and/or transacting in any of the products referred to in this material make their own investigation, seek appropriate professional advice. The investments discussed in this material may not be suitable for all investors. Any person subscribing to or investigating in any product/financial instruments should do soon the basis of and after verifying the terms attached to such product/financial instrument. Financial products and instruments are subject to market risks and yields may fluctuate depending on various factors affecting capital/debt markets. Please note that past performance of the financial products and instruments does not necessarily indicate the future prospects and performance there of. Such past performance may or may not be sustained in future. Varun Vaid, including persons involved in the preparation or issuance of this material may; (a) from time to time, have long or short positions in, and buy or sell the securities mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation in the financial instruments/products/commodities discussed here in or act as advisor or lender / borrower in respect of such securities/financial instruments/products/commodities or have other potential conflict of interest with respect to any recommendation and related information and opinions. The said person may have acted upon and/or in a manner contradictory with the information contained here. No part of this material may be duplicated in whole or in part in any form and or redistributed without the prior written consent of Varun Vaid. This material is strictly confidential to the recipient and should not be reproduced or disseminated to anyone else.


Varun Vaid also does not take any responsibility for the contents of the advertisements published. Readers are advised to verify the contents on their own before acting there upon.


Published Credits goes to following sources & all the mentioned sources as footer below the published material- Bloomberg, Valueresearch Online, Capital Market, Navindia, Franklin Templeton, Kitco, SBI AMC, LIC AMC, JM Financial AMC, HDFC AMC, The Hindu, Business Line, Personal FN, Economic Times, Reuters, Outlook Money, Business Standard, Times of India etc.