Sensex drops 318 points as retail inflation breaches RBI's 6% ceiling
India's benchmark Sensex snapped a three-day rally on Friday, closing 318.56 points, or 0.39%, lower at 81,592.45, after retail inflation climbed to 6.09% in October — breaching the Reserve Bank of India's upper tolerance limit for the first time in two years.
The broader Nifty fell 155.05 points, or 0.61%, to settle at 25,144.30. Mahindra & Mahindra, UltraTech Cement, Bharat Electronics, NTPC, Trent and HDFC Bank were among the major laggards on the 30-share index, while Hindustan Unilever, Asian Paints, Bharti Airtel and Reliance Industries were among the winners.
The inflation reading, up from 5.54% in September, was driven by sustained increases in food and beverages, restaurant services and transport costs. Economists now expect the central bank to raise its policy rate at next month's meeting.
The rupee weakened 8 paise to settle at 94.20 against the dollar, having traded between 94.05 and 94.28 during the session. Brent crude held flat at $95.76 a barrel.
Elsewhere, India's gem and jewellery exports rose 34% last month to $2.92 billion from $2.18 billion a year earlier, and exports to the United States grew 11% to $50.8 billion in April-September amid ongoing trade deal talks.
