Spiralling inflation can force RBI to either hike interest rates or change stance in next policy, says Anil Singhvi

In a special edition of Editor’s Take, Zee Business Managing Editor Anil Singhvi decoded the inflation numbers and pointed out that the Reserve Bank of India (RBI) may either raise the interest rates or change stance if inflation doesn’t soften before the next policy. 

As per government data released on Tuesday, consumer price-based inflation (CPI) zoomed to 6.95 per cent in March, mainly on account of costlier food items. The CPI was 6.07 per cent in February.  

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Stating that inflation of around 7 per cent is not an acceptable range, Singhvi pointed out the two main reasons for this rise – higher prices of food, vegetables and fruits and rising commodity prices, including crude oil, which jumped nearly 5 per cent on Tuesday. 

He said, the food, vegetables and fruits price rise could be curbed by softening supply chain issues, however, the rising commodity prices will only cool down post the global cues improve, including the Russia-Ukraine war crisis – which has pushed the commodity prices, including oil to a new high. 

#EditorsTake

घरेलू बाजार में महंगाई का कितना डर?

कच्चे तेल में क्यों आ रहा है फिर से उछाल?

मेटल और IT शेयरों में क्या करें?

बैंक और NBFCs में खरीदारी का मौका?

आज #banknifty 38000 पार कर पाएगा?

जानिए अनिल सिंघवी से...#StockMarket #Banks @AnilSinghvi_ pic.twitter.com/1IunDQfSpB

— Zee Business (@ZeeBusiness) April 13, 2022

The demand-supply problem is not on a general terms, Singhvi believes but also on the commodity exchanges level, as many investors might have short their position, expecting the oil price may eventually come down below $100 per barrel. 

In his take, the managing editor also said that metals and IT stocks are muted, however, bank stocks, especially private lenders, are on pilot seat of the market. On Tuesday, Metal and IT stocks were biggest laggard, while Nifty Bank and Financial Service were the only top gainers sectorally. 

The market expert Singhvi has neutral stance on IT with index heavyweight Infosys fourth quarter results expected on Wednesday, which may decide the trend in IT space. He suggested to sell metals on rise and buy bank stock on dips.  

According to Singhvi, the 12-share Nifty Bank should break 38000-hurdle on Wednesday led by Axis Bank, Kotak Bank and ICICI Bank, provided HDFC Bank doesn’t decline.