The inflation numbers came and in it makes for some interesting reading. The consumer price index (CPI) stood at 5.07% and slightly eased from a 17 month high of 5.2%. The cycle of reducing interest rates is definitively over in my view.
The IIP fell from a November high of 8.8% to 7.1%
Good news is that 16 out of the 23 industries showed YoY growth.
What does this mean for the markets? Well, falling inflation is always good but the consensus view is that party may not last. Given the MSP announcement in the budget, this is expected to push up the inflation in the coming months. Another aspect to consider would be that the India Inc as a whole seems to be coming out from the Demonetization and GST funk.
The industry seems to be shedding away the weight of GST-related glitches behind and trying to get back lost momentum, as both domestic and global growth surge
But having said this the 10 year GOI yield remained high