After bloodbath in the financial markets the previous day, domestic equity benchmark indices continued with their decline in opening deal on Tuesday morning.
At 9.41 a.m., sensex was down 0.3 per cent at 52,672 points, whereas nifty 0.3 per cent or 15,732 points. An hour later, Sensex was slightly up at 52,940.36 or 93.66 (0.18%). Nifty too gained marginally to 15,805.10 or 30.70 (0.19%) points up.
Equity indices across the board witnessed a massive selloff on Monday after the US reported 40-year high inflation reading.
However, the steep fall in the indices back home in India this morning was arrested due to a moderation in retail inflation in the month of May.
India's retail inflation for the month of May moderated from the previous month and came in at 7.04 per cent, however, it remained above the the central bank RBI's 6 per cent upper tolerance band for a fifth month in a row.
As per the data released on Monday, the retail inflation in April was at 7.79 per cent. Retail inflation tracked by the Consumer Price Index (CPI) measures the changes in prices from a retail market perspective.
RBI Governor Shaktikanta Das, at the recent monetary policy committee review deliberations, had categorically said that India's retail inflation is likely to stay above the tolerance level till the third quarter of FY23 before moderating below 6 per cent.
Das had also said that 75 per cent of the increase in inflation projections can be attributed to the food group.
For FY23, RBI sees overall inflation at 6.7 per cent, with 7.5 per cent in Q1, 7.4 per cent in Q2, 6.2 per cent in Q3, and 5.8 per cent in Q4, taking into consideration the normal monsoon and average crude oil basket price of $105 per barrel.
Notably, wholesale inflation in the country has been in double digits for over a year now.
