Wholesale inflation jumps to 11.39% in September as fuel and power prices surge
India's wholesale price index rose at its fastest pace in the revised series, driven by crude oil, mineral oils and metals. Markets slipped on the day as crude and foreign selling weighed.
Price pressures at the wholesale level in India climbed sharply in September. Provisional data released by the Ministry of Commerce and Industry on Wednesday put annual wholesale inflation at 11.39%, up from 9.92% in August.
The reading is the highest since the government moved to a new WPI series with 2022-23 as the base year. Because the basket, weights and method changed with that revision, the figure cannot be compared directly with numbers from the older 2011-12 series.
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Fuel and power lead the climb
The fuel and power group was the biggest contributor, with inflation in this segment rising to 25.85% from 22.93% a month earlier. Within it, crude petroleum and natural gas prices were about 57% higher than a year ago, while mineral oils rose roughly 40%. Coal and lignite inflation also picked up to over 9%.
Manufactured products, which make up the largest share of the index, saw inflation of 9.76%, compared with 8.37% in August. Basic metals and chemicals each recorded increases of close to 17%. Primary articles rose 8.67%, and the WPI food index, which carries roughly a quarter of the overall weight, rose to 8.66% from 7.05%.
The ministry said the increase came mainly from higher prices of mineral oils, food articles, crude petroleum and natural gas, coal, basic metals, chemicals, textiles, rubber and plastic products, and electrical equipment.
Markets end lower
Equity benchmarks ended in the red on the same day. The BSE Sensex fell 251.89 points, or 0.34%, to close at 72,781.89, while the NSE Nifty 50 lost 99.25 points, or 0.44%, to settle at 22,622.70.
Reports attributed the decline to profit-taking after a strong rally a day earlier, higher crude prices with Brent moving towards $107 a barrel, and continued selling by foreign portfolio investors. Pharma, auto, metal and private bank stocks were among the weakest, while IT and FMCG shares gained. Bajaj Finance, Bajaj Finserv and Mahindra & Mahindra were among the notable losers, while Infosys and Tech Mahindra rose.
Why it matters
Wholesale prices often feed into retail prices with a lag, as businesses pass on higher input costs. With retail inflation also rising in September, the latest figures add to concerns about household budgets and company margins, and they will be watched closely ahead of the central bank's next policy review. A sustained rise in crude oil also raises India's import bill and can put pressure on the rupee.
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