Mumbai, Nov 14 () : Contrary to expectations, special trading in stock markets – BSE and Nifty on Diwali day known as muhurat day fell by 0.3 %.
Usually, stock markets on this day see a rise since buying on this day is considered lucky. The increase in inflation for September month, fall in industrial production, drop in exports and rise in imports taking the trade deficit to a record high has left the stock markets high and dry.
Soon after the news broke out, the BSE and Nifty are showing downward trends. Auto and bank shares dipped as RBI and government seemed to be on different platforms. The only gainer was L&T finance holdings since it was expected to get bank licenses. DLF, the property developer’s shares fell as it posted a 63% drop in profits.
The stock market will open on Nov 15 when government data on inflation in October will be made public on Nov 14.
Reuters poll results after talking to 20 odd economists predict that the October inflation will rise to 7.96 % which is higher than the Sept figures. This might be the highest in this year. Fuel price rise has shot the prices of essential commodities up. RBI’s ideal inflation figure is 4-5% and the present trend is disturbing for the central bank. Citing high inflation, RBI did not cut interest rates but only CRR.
The Finance Minister will have to fast track the reforms and borrow money for its big-ticket programmes aimed to keep the Congress back in the reckoning for the 2014 elections. Economists had to put the October inflation at 8% as the highest and lowest at 7.4%. Across Asia, the economic slowdown has created a crisis but inflation is not as high as in India. Central banks to boost industrial activity have been asking RBI to lower the 8% interest rate, the highest in Asia.