CPI data has come in slightly above the upper bound of the RBI mandate of 6% Says Dr Vikas Gupta, OmniScience Capital
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Below is View on CPI data by Mr Vikas Gupta, CEO and Chief Investment Strategist, OmniScience Capital
"CPI data has come in slightly above the upper bound of the RBI mandate of 6%. While data being out of RBI's comfort zone is a concern, we cannot put too much weight on one month's data. However, if the CPI remains consistently above 6% in coming months then it would be a cause for concern. Depending on the persistence, RBI might maintain higher rates for longer. However, at this point we think RBI is likely to raise rates by 25 bps as per earlier expectations. However, if CPI persists above 6%, the RBI would be forced to go for a 50 bps rate hike; but looks unlikely currently. Impact on the equity markets is likely to be low, given the growth expectations in revenue and earnings"
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