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Banking shares are trading higher by up to 2% in otherwise weak market ahead of the wholesale price inflation (WPI) data for November that is due later in the day today.
State Bank of India (SBI), Kotak Mahindra Bank, Yes Bank, Allahabad Bank, Bank of Baroda, Indian Overseas Bank, Syndicate Bank, Canara Bank, Punjab National Bank and Bank of India are up 1-2% on the National Stock Exchange (NSE).
Bank Nifty, the banking share index, was up nearly 1% as compared to a marginal 0.09% gain in the benchmark CNX Nifty at 1011 hours.
State Bank of India (SBI), Kotak Mahindra Bank, Yes Bank, Allahabad Bank, Bank of Baroda, Indian Overseas Bank, Syndicate Bank, Canara Bank, Punjab National Bank and Bank of India are up 1-2% on the National Stock Exchange (NSE).
Bank Nifty, the banking share index, was up nearly 1% as compared to a marginal 0.09% gain in the benchmark CNX Nifty at 1011 hours.
According to a Times of India report, WP inflation may be headed towards near-zero levels due to a fall in global petroleum and other commodity prices, which is expected to result in fresh demands for interest rate cuts by the Reserve Bank of India (RBI).
Meanwhile, retail inflation as measured by the Consumer Price Index (CPI) eased sharply by 114bp to 4.38% during November 2014 as compared to 5.52% in October 2014.
“The distinct moderation in CPI inflation to 4.4% is admittedly a good sign for the economy; however this has been on the back of a high base effect last year. Hence, the signs of decline in inflation should be interpreted with caution. However, this cushion would not be available in the coming months,” said Credit Analysis & Research (CARE) Rating in a note.
It would be a tough call for the Reserve Bank of India (RBI) in February - on one hand IIP numbers have registered a negative growth while on the other hand inflation numbers are likely to increase in the coming months. While there could be strong case for rate cut, the final inflation number will be the clinching factor, it added.
