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India Markets Weekahead: Inflation holds key

Source : REUTERS
Last Updated: Fri, Aug 10, 2012 11:40 hrs
Workers make sweets inside a factory in Chennai

Reuters Market Eye - Inflation data on Tuesday will be the key event in a holiday-shortened week. Indian wholesale prices are expected to rise 7.37 percent in July from a year earlier, compared to 7.25 percent in June, as a below-average monsoon pushes up food prices, according to a Reuters poll.

Rising inflation may give the Reserve Bank of India less room to cut interest rates, even as a contraction in industrial output provides further evidence of slowing economic growth.

The RBI does not review policy again until mid-September .

The monsoon session of parliament is in progress as markets still await much-awaited reforms after recently-appointed Finance Minister P. Chidambaram promised to work on fiscal consolidation steps.

USD/INR likely to trade in 55-56.50 band next week, says a foreign bank dealer.

The benchmark 10-year bond yield is likely to remain rangebound until the WPI data.

Markets will be closed on Wednesday for Independence Day.

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