CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81.40% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Scan to Download iOS&Android APP

India retail inflation rises to 4.91% despite fuel duty cuts

09:17, 14 December 2021

Share this article

What You Need to Know

The week ahead update on major market events in your inbox every week. Subscribe
Concept of Inflation word on Indian currency Notes.
Higher price of vegetables lead the surge in the index – Photo: Shutterstock

India’s consumer price index (CPI)-based inflation rose to 4.91% in November compared with 4.48% in the previous month and 6.93% a year ago, announced the National Statistics Office, an arm of the Ministry of Statistics and Programme Implementation, today in a press release.

But, the latest figure of CPI inflation that tracks the average price of goods and services consumed by households was considered higher by economists as excise duty cuts by the federal and state government on fuel prices did not help, indicating that underlying demand is strengthening.

Food inflation increased to 1.87% in November from 0.85% a month ago, contributing to the surge in the index owing to a rise in price of vegetables.

Pressure’s rising

“We saw sequential gains in inflation coming in the wake of ongoing increases in perishable food prices, with some mitigation seen from lower fuel costs given the large excise duty cuts seen in early November,” said Rahul Bajoria, chief economist at Barclays.

“The imported price pressures also remain broadly intact, as domestic cooking gas and imported food costs stay high. We see base effects remaining dominant for a few more months,” he added. 

Core inflation, which includes non-food and non-fuel items, surged to a five-month high of 6.08%. Moderation in the CPI inflation for fuel and light, tobacco and intoxicants, and miscellaneous items was outpaced by a rise in inflation for food and beverages, housing, clothing, and footwear, the data showed.

BTC/USD

20,042.60 Price
-0.260% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 21:00 (UTC)
Spread 60.00

Natural Gas

6.88 Price
-0.680% 1D Chg, %
Long position overnight fee -0.1544%
Short position overnight fee 0.1122%
Overnight fee time 21:00 (UTC)
Spread 0.005

US100

11,447.90 Price
+0.010% 1D Chg, %
Long position overnight fee -0.0142%
Short position overnight fee 0.0043%
Overnight fee time 21:00 (UTC)
Spread 1.5

Oil - Crude

89.08 Price
+0.700% 1D Chg, %
Long position overnight fee 0.0218%
Short position overnight fee -0.0407%
Overnight fee time 21:00 (UTC)
Spread 0.03

Waning effect of high base 

“We expect CPI inflation to average 5.5% this fiscal compared with 6.2% last year. The high-base effect is playing a key role in keeping headline CPI inflation lower than last year,” according to CRISIL Ratings.

“We expect non-food inflation to remain under pressure in the coming months as commodity prices remain elevated, and producers passing through high input costs to consumers amid improving demand conditions,” the agency added.

While the high-base effect from last year is helping the index print stay lower, it is wearing out gradually, and contributing to the pick-up in inflation. Rising food and core inflation also pulled the CPI up, while fuel inflation eased as crude prices moderated.

Data provided by the government showed that urban inflation rose to a greater extent than rural. Urban inflation in November was 5.5% compared with 5% in October, while rural inflation was 4.3% versus 4.1% in October. 

Read more: Indian paper packaging sector to see 15% growth: CRISIL

What You Need to Know

The week ahead update on major market events in your inbox every week. Subscribe
The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Read next

Still looking for a broker you can trust?

Join the 455.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading