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Benchmark indices recouped after turning flat as Sept Wholesale Price Index (WPI) based inflation numbers hit the headlines today. September WPI inflation grew at its fastest pace in seven months at 6.46% against 6% in August. July WPI inflation was revised to 5.85% vs 5.79%.
Onions drove up inflation up as prices rose by a massive 322% against 244% increase in August. This is probably an all-time high. As a result, food inflation rocketed to over a 3-year high of 18.4% in September against 18.2% in the previous month.
At 1:00 PM, the 30-share Sensex was flat at 20,585 and the 50-share Nifty was up 13 points at 6,109 levels. Government's benchmark 10-year bond yield rose 8 basis points to 8.58 and rupee was trading at Rs 61.15-a-dollar slipping 0.15 compared with previous close of Rs 61.08 per dollar.
On the global front, Asian shares and U.S. stock index futures fell and the safe-haven yen rose on Monday as a possible U.S. debt default edged closer after the failure of weekend talks in Washington, though expectations are that a last-minute compromise will be reached.
IMF chief Christine Lagarde warned of "massive disruption" to the global economy if the U.S. debt ceiling, which will be reached on Thursday, was not lifted. That is when the U.S. Treasury runs out of authority to borrow money.
On other side of the pacific, China's export growth unexpectedly fizzled in September, underscoring worries about flagging global demand, and annual consumer inflation quickened to a seven-month high.
MSCI's broadest index of Asia-Pacific shares outside Japan, which had hit a three-week high on Friday on hopes a U.S. deal was imminent, dropped 0.3 percent and China's CSI300 index slipped 0.2 percent.
Markets in Japan and Hong Kong are closed on Monday for public holidays.
Back home, the rupee weakened today ahead of the inflation data and dollar demand from importers in early trades.
BSE IT and TECk indices have sharply lead the gains in sectors and are up over 1% each. Auto and Banks are up 0.2% each while Oil & Gas, Capital Goods added over 0.1%.
FMCG, Metal, Realty, Power and Consumer Durables are the laggards on the BSE sectoral indices.
From the IT space, Wipro is trading higher by nearly 4% on reports that the information technology (IT) company is in race for Rs 1,500 crore India Posts devices project. Infosys and TCS have gained between 1-2%.
Shares of mid-and-small sized banks such has Karnataka Bank, Lakshmi Vilas Bank, South Indian Bank, Dhanlaxmi Bank, Development Credit Bank and Karur Vysya Bank have rallied up to 20% on back of heavy volumes on the bourses.
Most of these banks were underperformed the market by falling more than 30% in past three months in wake of Reserve Bank of India measures.
After having opened flat, the stock of Reliance Industries (RIL) has seen a rise of about 0.73% on Monday, ahead of its second quarter earnings announcement
Other notable gainers are Dr Reddy’s Lab, Coal India, L&T, Maruti Suzuki and SBI.
While Hindalco, BHEL, Tata Steel, Jindal Steel and HDFC which declined between 1-3% are the major laggards
TTK Prestige has dipped nearly 5% at Rs 3,314 after reporting a flat net profit of Rs 30.30 crore for the second quarter of financial year 2013-14 compared with Rs 30.28 crore in the same period last year.
Shares of Wockhardt today dropped 5% after UK’s medicines regulator withdrew its certification to its unit, which generated annual revenues of GBP 12 million (about Rs 117 crore).
The broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices are up nearly 0.6%.
The market breadth in BSE remains firm with 991 shares advancing and 632 shares declining.
