Rate-sensitive stocks are seeing interest in early morning trading, with the expectation that the current easing cycle will still continue, as inflation remains above the RBI’s medium-term target of 4-6 per cent. NSE banking, auto and metal indices strengthened by half a percent in the flat market.
Official data released after market hours on Monday showed that consumer inflation in the country reached 6.69 percent in August, up from 6.73 percent in the previous month, but still it was RBI’s medium-term target of 4-6. Was above percentage. Food inflation – or the rate of increase in food prices – was 9.05 percent in the previous month, compared to 9.27 percent in July.
Separate official figures released during market hours on Monday showed the wholesale price in the country increased by 0.16 percent last month, which remained in deflection mode for four consecutive months.
ICSI Bank, HDFC Bank and IndusInd Bank were up 1.4% on the NSE in the banking index. In the auto sector, stocks such as M&M and MRF rose up to 1 percent each. And the metal space saw the likes of Tata Steel, Hindalco and JSW Steel adding about one per cent on NSE.
The benchmark indices were completely flat at the time, with the BSE Sensex gaining 18 points at 38807.35 and the NSE Nifty rising 11.25 points at 11,458.15.