>INFLATION METER (INDIA CAPITAL MARKETS)

WPI down to 0.48% - but keeps rising on weekly basis …
• The WPI falls to 0.48% for the week ended May 02, 2009 against 0.70% for the week ended April 25, 2009 (consensus was at 0.26%).

Reading between the lines…

• Though the WPI has fallen on a yearly basis, it has continued to rise on weekly basis - fifth successive week of increase in WPI. This week it was up by 0.39%.

• The yearly fall was solely owed to high base of last year.

• The rise in WPI was led by increase in price indices of all the groups - Primary Articles Group (by 39 bps), Fuel Group (by 22 bps) and Manufacturing Group (by 40 bps).

• In the Primary Articles Group, the price index of Food Articles was up by 28 bps. This is attributed to the higher prices of food grains, vegetables, condiments & spices etc. The non-food
Articles segment price index too was up by 78 bps led by increased prices of fibers and oil seeds. The mineral group price index remained unchanged.

• In the Fuel Group, the mineral group price index (up by 37 bps) led the spike owing to increased prices of naphtha, furnace oil and light diesel oil. However, prices of ATF and bitumen were down.

• Coming to the Manufacturing group, the price index Food Products group continued to go up (this week by 70 bps) owing to increased prices of sugar and oil cakes. The prices of edible
oils was down slightly this week. The other groups that contributed to rise were Chemical Group (up by 126 bps - owing to organic chemicals and fertilisers & pesticides) and Basic metals alloys & metals products (up by 12 bps - owing to iron and steel). The Transport equipment group was infact down by 17 bps.

To see full report: INFLATION METER