Rate-sensitive stocks are witnessing buying interest in mid-morning trading on hopes that the current easing cycle is likely to continue for now as inflation remains above the RBI’s medium-term target range of 4-6 per cent. The NSE banking, auto and metal indices gained up to half a per cent each in a flat market.
Official data released after market hours on Monday showed consumer inflation in the country eased to 6.69 per cent in August, from 6.73 per cent in the previous month, but was still above the RBI’s medium-term target range of 4-6 per cent. Food inflation – or the rate of rise in food prices – was at 9.05 per cent last month, as against 9.27 per cent in July.
Separate official data released during market hours on Monday showed wholesale prices in the country rose 0.16 per cent last month, having remained in a deflationary mode for four months in a row.
In the banking index, ICICI Bank, HDFC Bank and IndusInd Bank strengthened by upto 1.4 per cent each on the NSE. In the auto sector, shares such as M&M and MRF gained upto 1 per cent each. And the metal space saw the likes of Tata Steel, Hindalco and JSW Steel adding around a per cent each on the NSE.
The benchmark indices were totally flat at the time, with the BSE Sensex gaining 18 points at 38807.35 and the NSE Nifty adding 11.25 points at 11,458.15