Retail inflation likely rose near 6% in November; should investors be worried?

livemint.com:

Mint poll of 23 economists, India’s retail inflation likely rose 5.8 per cent in November. A Reuters poll of 41 economists predicted India's November CPI rose 5.70 per cent in November. On the other hand, the estimates of global financial firm Barclays show India's CPI-based inflation might have risen above the RBI's tolerance limit of 6 per cent in November.

"We estimate that CPI inflation rose in November to 6.15 per cent year-on-year (YoY), a sharp reversal from the moderating trajectory over the past couple of months (October: 4.9 per cent, September: 5 per cent)," Barclays said in a report. Also Read: India CPI inflation may breach RBI's 6% tolerance band in November, says Barclays Experts are of the view that the rise in retail inflation print is unlikely to weigh on market sentiment as core inflation likely remained stable and an uptick in inflation print is widely expected. "Inflation could be around 6 per cent.

The market already knows that there will be a spike in inflation in November because of high vegetable prices. The market will not be disappointed if inflation comes near 6 per cent," V K Vijayakumar, Chief Investment Strategist atGeojit Financial Servicestold Mint. "Three factors are driving the market: (i) the expectations of political stability after the Lok Sabha election in 2024, (ii) the steady decline in 10-year US bond yields which has turned foreign portfolio investors (FPIs) into buyers, and (iii) strong domestic macro," said Vijayakumar.