The Bombay High Court building, with the BSE building behind it, in Mumbai. (Photographer: Adeel Halim/Bloomberg)
5 years ago
Jun 15, 2021
Coal India, JB Chemicals may react as the companies reported quarterly results after the market closed Monday. LIC Housing, Jubilant Foodworks, Whirlpool India, Power Finance are among the companies scheduled to report earnings Tuesday.
Indian sovereign bonds decline by the most in more than a week after retail inflation quickened, triggering fears of sooner-than-expected monetary policy normalization. Traders look forward to a Rs 13,100 crore ($1.8 billion) sale of state debt.
10-year yields up 3bps to 6.03%; 6.64% 2035 bond yield rises 4bps to 6.64%; swaps also surge with 1-year OIS up 7bps to 3.73%; 5-year OIS up 8bps to 5.1525%
CPI inflation rose 6.3% for the month of May, faster than the median estimate of 5.4% in a Bloomberg survey, data showed Monday after close of market hours
India’s retail inflation showed unexpected surge in May to 6.3% from a year earlier, according to data released after trading hours yesterday. The reading was above the median forecast of 5.4% and was in line with separate data that showed wholesale prices soared by 12.94% in the previous month.
Prospects of a sharp recovery in economic activities in the coming months are overshadowing the concerns over inflation, Binod Modi, head of strategy at Reliance Securities said in a note. “While domestic equities continue to look good, investors must focus on quality stocks with robust earnings visibility and margins of safety.”
Newgen Software jumped as much as 11.4%, most since May 26, after about 7.38 million shares changed hands on BSE, according to data compiled by Bloomberg.
The stock hit a record high of Rs 510, before paring some of its gains.
“CPI inflation partly depicted the pass-through of impending input price pressures. Core goods inflation may remain elevated ahead with a relentless increase in global commodity prices. Meanwhile, the ensuing demand revival in contact-sensitive household services amid reopening could pressure core services inflation,” says Madhavi Arora, the lead economist at Emkay Global Financial Services wrote in a note
Overall, core inflation will likely remain sticky ahead and will likely outdo headline through the year
The Monetary Policy Committee may still choose to look through the spike in inflation in the near term, with the monetary reaction function currently hinging more on growth revival becoming sustainable
