Stock Market overlooks Hindenburg concerns while inflation dives to pre-Covid level

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Stock Market overlooks Hindenburg allegations against SEBI chief

By S Jha

New Delhi, August 12: Sensex may say thanks, but no thanks to the Hindenburg Research after the retail inflation dived to the pre-covid level for the month of July. The retail inflation declined to 3.54 per cent for July, going down four per cent target of the Reserve Bank of India for the first time in five years.

The July inflation number may bring cheers for the market participants. The inflation was below four per cent last time in 2019 only. Afterwards, the Covid-19 pandemic swept through all parts of the world.

The NSO released the retail inflation number in the off-market hours. Even without the positive cue of the cooling of the inflation, the bulls had firmly struck at the bears on the street during the day’s trade in the stock market.

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The National Statistical Office (NSO) also said that the food inflation too cooled down to 5.42 per cent for the month of July. The food inflation has been an irritant for the RBI.

With the inflation ging down four per cent, all eyes will now be on the monthly policy meeting of the RBI next month. The experts have been urging upon the RBI to cut interest rates.

The RBI this month maintained the status quo for the ninth occasion in a row by not touching the Repo Rate. However, the US Federal Reserve is widely expected to begin cutting interest rates from the next month.

Experts in the US have begun blaming the Fed for taking the economy to the door steps of recession with extended high-interest rate regime. The UK central Bank had last month cut the interest rate for the first time after the Ukraine War.

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Meanwhile, Sensex had dived in deep red with a cut of over 400 points in the first hour of the trade. Nifty too had lost about 100 points in the morning session.

But the indices staged a smart turnaround in the fortune by the mid-session around noon. The indices turned green amid heavy buying in the frontline stocks.

The rail stocks were in high demand. Amid a regular flow of decisions from the Cabinet about the railways, the rail stocks were trending on Monday.

Rail Vikas Nigam shares were higher by 11 per cent. Shares of Titagarh Wagons were also trading seven per cent higher.

Disclaimer: This article makes no recommendation for buy or sell of shares of any company.

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