Indian stocks fell for a third day yesterday, capping their first weekly loss in six, ahead of data that may show inflation accelerated in June, weakening the case for an interest-rate cut by the central bank.
The BSE India Sensitive Index, or Sensex, slid 0.1% to 17,213.7, the lowest close since June 28. The gauge lost 1.8% this week, ending a five week, 4.8% rally.
“Earnings so far have been mixed and with key inflation data due to be released next week, investors aren’t committing a lot,” Sunil Pachisia, vice-president at brokerage Pratibhuti Viniyog Ltd, said by phone in Mumbai. “If inflation accelerates, the central bank may not act on rates.”
Wholesale prices probably rose 7.61% in June from a year ago, according to a median of 36 economists’ estimates in a Bloomberg survey. Prices increased a faster-than-estimated 7.55% in May, which the Reserve Bank of India deemed too high last month to lower rates at its June 18 meeting. The government will release the inflation data on July 16.
India’s rupee meanwhile strengthened the most in almost two weeks on speculation the central bank will join policy makers worldwide in taking steps to spur growth.
The rupee advanced 1.4% to 55.1450 per dollar in Mumbai, the biggest gain since July 3, according to data compiled by Bloomberg. That led to a gain of 0.6% this week, erasing earlier losses. The currency will rise to 54 in the coming weeks, Garg predicted.
from gulf times.