Rise With Profit: US CPI Rises, OPEC Cuts Demand Forecast, Britannia Takes Price Hike | Podcast

This is the daily morning update from NDTV Profit. This is where we get you up to speed with everything you need to know, to start your day on the right note. 

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Wall Street cheered the latest retail inflation print in the US. The consumer price-based inflation data was along expected lines, rising 2.7% annually and 0.3% sequentially in November. That’s the fastest increase in seven months, but the Federal Reserve is still widely expected to cut rates further when the Federal Open Market Committee meets next week.

Core inflation, which removes the impact of food and fuel, rose 3.3% year-on-year, also in line with expectations.

Progress on bringing inflation to the 2% target has slowed considerably, but the jobs market has been showing signs of cooling. The interpretation of the current signs point to room for the Fed to cut rates. Reuters is reporting that markets are pricing in more than a 96% chance of a 25-basis-point cut by the Fed next week, up from an 86% chance before the data, according to CME's FedWatch Tool.

Overnight, the S&P 500 rose 0.8% and the Nasdaq Composite made history, rising 1.8% to close above 20,000 for the first time. The Dow ended lower by 0.2%. Equities in the Asia Pacific region were mostly positive at the start, with the Nikkei 225 leading gains, up 1.5%, last I checked.

The dollar pared some gains in trade after the inflation print. The dollar index, which measures the value of the greenback against a basket of currencies, was 0.3% higher at $106.7.

In other news, the Organisation of Petroleum Exporting Countries, or OPEC, has cut oil demand growth forecasts for this year and next for a fifth straight month, marking its deepest reduction to the 2024 outlook so far after agreeing to extend its supply curbs. The bloc chopped projections for consumption growth in 2024 by 210,000 barrels a day to 1.6 million barrels a day, according to its monthly report. It has now slashed projections by 27% since July, as it belatedly recognises the deteriorating market picture.

Despite the slew of downgrades, OPEC’s forecasts remain significantly higher than most others in the oil industry, and at odds with actual data for consumption this year.

Crude oil prices edged higher overnight, with brent currently at over $73 to the barrel. But that’s being attributed to Treasury Secretary Janet Yellen’s statement that the US is looking for creative ways to reduce Russia’s oil revenue and the lower global demand creates an opportunity for more sanctions.

In corporate news, Britannia Industries Ltd. has begun implementing price increases of 3-5% across some of its products, starting in the third quarter of fiscal 2025, as the company deals with rising commodity prices. The company is attempting to counter a sharp increase in prices of several key commodities, like palm oil, which has seen a 40% rise in recent times. This isn’t out of the blue. Several FMCG companies have indicated that they are taking price increases to counter persistent commodity inflation.

In the primary market action, there’s plenty to look at, but there’s one update that stood out. The IPO of One MobiKwik Solutions was subscribed 7.32 times on the first day. The price band of the issue was fixed at Rs 265 to Rs 279 per share, with the company planning to raise Rs 572 crore, which only comprises a fresh issue of shares.  

And finally, Shriram Finance Ltd., the flagship company of the Shriram group, has completed the sale of its housing finance subsidiary to Warburg Pincus affiliate for Rs 3,929 crore. The company has sold 84.44% of the shareholding on a fully diluted basis.

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