The most awaited data of the week is out. Inflation in May has gone up to 7.5%. Core inflation number stood at 4.99%, a reason enough to expect a rate cut. Overall food inflation rose to 10.7% from 10.4% in the previous month. However, vegetables inflation was lower at 49.4% in May.
According to the weather officials, the crucial monsoon rains is 50% below average in the week to June 13. The IMD, or India Meteorological Department, has forecast that rainfall would continue till September to avoid drought. Monsoons were 36% below average in its first week after a delay.
Rising inflation and weak European markets, led the markets to close in the red on Thursday. The Sensex closed at 16,677.88, 1.2% lower and the Nifty ended the day’s trade at 5,054.75 down by 1.3%.
Banking stocks had a bad trading day. Largest lender SBI tumbled around 3.06% to close at Rs2,154.25 while rival HDFC Bank dropped 1.53% closing at Rs534.40.