Lower agriculture input costs to contain food inflation

The government’s annual budget for fiscal year 2019 provides for support prices for agricultural produce to be increased to 50% mark-up over costs. That’s made the Reserve Bank of India and other market participants wary about the risks to food inflation. Bloomberg Economics’ agriculture input cost index shows that these concerns might be overdone.

• The latest value for the month of April shows that agriculture input cost inflation was a negative -0.25%, marginally higher than -0.71% in March. Click here for details on Bloomberg Economics agriculture input cost index.

• The average agriculture input cost inflation over the past year has been -1.4%. This has helped bring down food inflation. Food inflation that has a 46% weight in the CPI basket averaged 2.4% over the last year

Wall Street drops as CPI data boosts December rate hike odds

Wall Street's three major indexes opened lower on Thursday, shying away from their record high closes, as an uptick in consumer prices inflation boosted the odds of another interest rate hike this year.

A Labour Department report showed consumer price index (CPI) rose more than expected last month and the gain was the largest in seven months, lifting the year-on-year increase to 1.9 percent from 1.7 percent in July.

Despite the uptick, both CPI and personal consumption expenditures, the Federal Reserve's preferred inflation measure, remain stuck below the central bank's 2-percent target.

"I don't think they should raise rates in December, but they will, in order to counteract any kind of slowdown in the overall economy," said Robert Pavlik, chief market strategist at Boston Private Wealth.

After the data was released, the odds of a hike in December rose to top 50 percent for the first time since July, from 41.3 percent, according to CME Group's FedWatch tool.

The CPI data is the last to be released before the Fed's Sept. 19-20 policy meeting, where it is expected to outline a program to start offloading its $4.2 trillion balance sheet.
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Markets at day’s low, Nifty fails to hold 8,800; Coal India down 2%

Latest News - Benchmark indices pared gains to turn flat after opening on a higher note today following Asian markets and Wall Street hitting record high on Friday.

Investors awaited CPI and WPI inflation data which will be released later today after the factory output contracted 0.4% in December.

At 12:05 pm, the S&P BSE Sensex was trading at 28,258, down 75 points, while the broader Nifty50 was ruling at 8,768, down 25 points.

In the broader market, BSE Midcap and BSE Smallcap fell 0.3% and 0.4% respectively.

"Though volatility had dominated last week’s trades, lower ranges were held on (Read More)