After the Sensex broke records to settle the highest ever closing of 36,548.41 on Thursday, the mood was euphoric for a short while, before reality set in. Inflation and industrial production data released Thursday along with slow gains in small and medium cap shares indicate that the markets will be cautious in the near term.
Moreover, retaliatory tariff moves by both the US and China have dampened overall stock market sentiment globally.
ALSO READ: Retail inflation hits five months high
Here the three things you need to know about key economic parameters
- Though the Sensex broke an all time high record and touched an intra-day high of 36,699.53, the BSE mid-cap index fell 0.52% and small-caps lost 0.06%. This translates into the fact that the rally is driven by a few index heavyweights, while mid-cap and small-cap stocks have taken a beating. The BSE mid-cap and BSE small-cap indices have corrected 12.74% and 14.62%, respectively, in 2018 while the Sensex and Nifty rose 7.32% and 4.68%, respectively.
- The Consumer Price Index (CPI)-based inflation rose to a five-month high of 5% in June, overshooting the Reserve Bank of India’s projection of 4.8-4.9% in the first half of 2018-19. It rose mainly on account of high fuel prices.
- Index of Industrial Production (IIP) slowed to a seven-month low of 3.2% in May. A slump in IIP indicates sluggishness in the manufacturing sector that may have been triggered by weak demand.
The share markets slumped from the all time high levels on Friday, as data released on Thursday provided a reality check.
Click here for Latest News updates and viral videos on our AI-powered smart news genie