Business Live: Sensex, Nifty start slowly; bond yield is rising

The Nifty and the Sensex have made marginal gains since opening today. After a week of volatility led by geopolitical tensions in the Middle East, there are signs of market stability.

The big news this week is the peak in retail inflation. Analysts expect that interest rates on Indian bonds will rise to adjust to higher inflation. The return on the 10-year Indian government bond reached a peak of 5 weeks this morning.


10:15 am

India calls for boycott of Malaysian palm oil after a diplomatic fight

Indian palm oil importers have effectively stopped all purchases from top supplier Malaysia after the government had urged them privately to boycott their product after diplomatic spit, industry and government sources said.

The warning, issued last week, comes almost in parallel with the New Delhi movement to restrict the import of refined palm oil and palm olein after the Prime Minister of Malaysia criticized India’s actions in Kashmir and his new citizenship.

Consequently, Indian importers did not purchase crude or refined palm oil from Malaysia, and at least five industrial sources who were familiar with the case told Reuters.

“Officially there is no ban on crude palm oil imports from Malaysia, but no one buys according to government instructions,” said a leading refinery, adding that buyers are now importing from Indonesia despite paying a premium for prices in Malaysia. Reuters

10:00 a.m.

Retail inflation at a 5-year high of 7.3% in December

Retail inflation rose to a peak of five and a half years of 7.35% in December 2019, with the onion shortage causing the peak.

According to information released by the National Bureau of Statistics on Monday, retail inflation based on the consumer price index was only 2.11% in December 2018 and 5.54% in November 2019.

The last time retail inflation was so high was 7.39% in July 2014, just after Prime Minister Narendra Modi began his first term of office.

The increase in inflation in the ‘vegetables’ category was 60.5% last month compared to December 2018. Onion prices were above Rs. 100 per kg mark in many major cities last month, due to a 26% fall in production. Read more.

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