High food prices bring back inflation fears, Sensex down 0.4%

High food prices bring back inflation fears, Sensex down 0.4%

New Delhi: Inflation still remains high and the latest numbers subdued Indian stocks on Thursday. High food prices bought back fears that the Reserve Bank of India may persist with policy rates hikes to contain the inflation. India’s food inflation accelerated to a three-month high of 9.9% in the week ended 30 July. In the previous week the price gauge stood at 8.04%.

Sensex: 17,059 –0.42%

Nifty: 5,138 –0.44%

Tata Power, Axis Bank, Maruti Suzuki and Bharti Airtel led the losses in the Nifty shares. Concerns about high fuel costs at its Mundra plant and weak operational performance in the first quarter led to selling in the Tata Power stock.

Tata Power: 1,122 –4.6%

Axis Bank: 1,212 –3.1%

Maruti Suzuki: 1,239 –3.0%

Bharti Airtel: 395 –2.9%

Meanwhile, HDFC, Reliance Infrastructure, Reliance Capital and Kotak Mahindra Bank gained over 2% each. Reliance Infrastructure rose 2.7% after the company reported profits that were better than analysts’ expectations. The company reported an 8% growth in first quarter profits to 405 crore. Analysts polled by Reuters were expecting the company to report a profit of 370 crore. Read more...

HDFC: 684 +2.7%

Reliance Infrastructure: 484 +2.7%

Reliance Capital: 459 +2.4%

Kotak Mahindra Bank: 469 +2.2%

At the sectoral front, banking, real estate and capital goods stocks led the losses on the BSE. Except FMCG and oil & gas, all BSE sectoral indices closed the day with losses.

BSE Bankex: 11,829 –1.0%

BSE Realty: 1,835 –0.9%

BSE Capital Goods: 12,225 –0.7%

Fears that the Reserve Bank of India might increase the policy rates again have led to selling in banking stocks. Except five, all stocks in the BSE Bankex closed the day in losses.

Bank of Baroda: 840 –2.1%

ICICI Bank: 942 –2.2%

Punjab National Bank: 1,108 –1.2%

Meanwhile, shares of Shree Renuka Sugars surged after the company reported a two-fold jump in June quarter profits to 187 crore.

Shree Renuka Sugars: 63 +3.8%

Overall, it was a mixed day for Indian stock markets. Half the stocks the traded on the BSE closed the day with losses.