Psu Banks Debt stitching. Inflation internals,Markets Hurray !! A sucker’s Rally ?

The Equity Markets, particularly FII’S have found a great contrarian trading Bet on India. while crude jerks in the lower echelon of $105-116 range. China, however in a consistent with its crusade to cool, raised interest rates. The Indian equity market darned  past 5700.

Here, are the Inflation internal to bore and know that last Diesel price hike to yet pass off.

 

Wholesale Price Indices for Primary Articles and Fuel & Power in India (Base: 2004-05 = 100) Review for the week ended 25th June, 2011 (04 Asadha, 1933 Saka)

The WPI for the week ended 25th June, 2011 in respect of ‘Primary Articles’ and ‘Fuel & Power’ is given below:

PRIMARY ARTICLES (Weight 20.12%) 

The index for this major group rose by 0.2 percent to 197.8 (Provisional) from 197.4 (Provisional) for the previous week.

The annual rate of inflation, calculated on point to point basis, stood at 11.56 percent (Provisional) for the week ended 25/06/2011 (over 26/06/2010) as compared to 11.84 percent (Provisional) for the previous week (ended 18/06/2011).

The groups and items for which the index showed variations during the week are as follows:-

The index for 'Food Articles' group rose by 0.5 percent to 190.8 (Provisional) from 189.8 (Provisional) for the previous week due to higher prices of coffee (21%), mutton (6%), gram and fruits & vegetables (2% each) and jowar and masur (1% each). However, the prices of ragi (3%), tea (2%) and fish-marine, moong, condiments & spices, bajra, egg, urad and barley (1% each) declined.

The index for 'Non-Food Articles' group declined by 0.4 percent to 179.6 (Provisional) from 180.4 (Provisional) for the previous week due to lower prices of raw jute (12%), flowers (8%) and raw rubber (3%). However, the prices of linseed (17%), safflower (6%), gingelly seed (4%), raw silk (3%), fodder (2%) and gaur seed, sunflower and soyabean(1%each) moved up.

The index for 'Minerals' group declined by 0.4 percent to 314.7 (Provisional) from 316.0 (Provisional) for the previous week due to lower prices of crude petroleum (1%).

FUEL & POWER (Weight 14.91%)

The index for this major group rose by 3.8 percent to 166.3 (Provisional) from 160.2 (Provisional) for the previous week due to higher prices of kerosene (18%), lpg (15%) and high speed diesel (9%). However, the prices of bitumen and furnace oil (4% each) and naphtha (3%) declined.

The annual rate of inflation, calculated on point to point basis, stood at 12.67 percent (Provisional) for the week ended 25/06/2011 (over 26/06/2010) as compared to 12.98 percent (Provisional) for the previous week (ended 18/06/2011).

Build up inflation over the week, financial year end and over the year is given in Annexure-I for some important items. Trend of rate of inflation during last six weeks is also given for some important items in Annexure II.

Next date of press release: 14/07/2011 for the week ending 02/07/2011

The Indices show that a ‘ New Normal’ for the prices have been Reached. The inflation is now firmly entrenched in the system, so the chance of moderation of interest rates is slim in medium term.

How does Indian Consumer, producer and other economic quadrants now function will be the Testing ground Zero for coming quarter. The finance Minister meeting tomorrow to Indian Bankers to shield the rising rates and indirectly asking for ‘Absorbing’ some heat and stitch the burden of debts

The ECB may follow suit to raise interest rates today, in efforts to combat the Inflation epidemic.

While Wall street may be keeping an eye at Labour market and Washington. The Obama’s appeal may not find many takers in Republican camp, in todays, bipartisan Talks. Expect some more whistle blowing by Rating agencies, soon.

All in all,  it seems, We are in sucker’s Rally, unless something drastically happens in Libya. As the IAEA oil injection wanes it effect on Oil Jobbers and OPEC in loggerhead's