India's Inflation surges to 9.06% in May vs 8.66% in April

Inflation for the month of May rose a higher-than-expected 9.06% as against 8.66% on a month on month basis (MoM). 

 

Primary articles inflation rose 11.3% as against 12.05%. Meanwhile, manufacturing products inflation came in at 7.27% versus 6.18% and the index was up 1% (MoM). The food articles index was up 1.6% (MoM) and the all-commodities index grew 0.7% (MoM).

 

WPI fuel group inflation grew 12.32% in May as compared to April’s 13.32%, while the index was up 0.3% (MoM).

March WPI inflation rate has been revised to 9.68% as against the provisional figure of 9.02%.

This is a Good Trigger for the Central Bank (RBI) to raise the interest rates and tighten the money flow more in the economy. It will be the 10th such move form RBI since mid-March 2010.

This time the HAWKISH move of RBI will hurt the REALTY & INFRA, BANKING & FINANCE, AUTO, METAL, CONSUMER GOODS and CAPITAL GOODS Sectors the most.

RBI is going to announce its policy on 16th of June, so Markets are also waiting eagerly for the Policy with its FINGERS CROSSED.