Inflation shoots up to 11.91%The annual inflation rate climbed
to 11.91 per cent for the first time in more than 13 years in early July, driven by higher costs of commodities and strong demand in the economy. This is a quarter per cent jump week on week. The fuel, power and light were up 0.9 per cent while primary articles were down 0.1 per cent. Fruit and vegetable prices were down 1 per cent with other food articles seeing a 0.2 per cent dip. It would be the 22nd consecutive week that the inflation rate has been above 5.5 per cent, the central bank's target for the end of the fiscal year in March 2009.
According to a research report by Standard & Poor's, world CPI inflation - which was 2.4 per cent in 2002 - rose to 3.3 per cent in 2007 and is now projected to hover around 5.2 per cent in 2008. Region-wise, CPI inflation is projected to remain 3.4 per cent this year in European Union and 3.2 per cent in Eurozone. In 2002, the inflation figures were 2.1 per cent for both the regions. Likewise, CPI inflation is projected to remain this year at 4.8 and 3.2 per cent in the US and the UK, respectively, and 8.8 per cent in the emerging markets. The highest inflation is projected at 15.3 per cent in the CIS counties and at 12.8 per cent in the Middle East & North Africa.
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Equities end higher on easing in crude oilBolstered by positive global cues and receding crude oil prices, equities in India snapped their week-long losing streak to end sharply higher om Thursday.
Investors covered short positions and also made fresh purchase at lower levels.
National Stock Exchange’s Nifty settled 130.5 points or 3.42 per cent higher at 3947.20. The index touched a high of 3968.75 and a low of 3823.15 intra day. Bombay Stock Exchange’s Sensex ended up 536.05 points or 4.26 per cent at 13,111.85 after swinging in a range of 13,150.35 and 12,843.79.The BSE Mid-cap Index ended up 1.39 per cent at 5,155.34 and the BSE Small-cap Index was 0.99 per cent higher at 6,387.12. “Market was in an oversold territory and we witnessed a technical bounce-back. Another factor that lifted the positive sentiment was cooling of crude oil prices,” said Arpit Agrawal, head of research, Arihant Capital Markets. Traders covered positions in over-beaten interest-sensitive sectors like
banking and real estate. Buying was also seen in capital goods stocks. Steel counters sulked on fear of government initiative to cap prices. Market discounted inflation, which was expected to be above 12 per cent. “Market will remain volatile till vote of confidence is passed.
Otherwise, fundamentally things have not changed much,” Agrawal added. Biggest Sensex gainers were HDFC (9.78%), Maruti Suzuki (9.46%), Jaiprakash Associates (9.19%), DLF (8.44%), Larsen & Toubro (7.49%) and State Bank of India (7.75%). Losers comprised Ranbaxy Laboratories (-3.93%) and Tata Steel (-2.92%). Market breadth remained positive through the day. On BSE, 1,536 advances outnumbered 1,081 declines. In Europe, stocks were buoyant cheering crude’s fall. The FTSE 100 was up 2.34 per cent, DAX 30 rose 2.33 per cent and CAC 40 added 2.76 per cent.
Oil prices fell on concerns slowing US economic growth would hurt crude demand. Light sweet crude forAugust delivery, dipped 42 cents to $134.18 per barrel. Friday, market will cheer a marginal rise in domestic inflation to 11.91 per cent in the week to July 5 from 11.89 per cent in the previous week. Finance Ministry’s statement that inflation has stabilized will further lift investor sentiment.
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