After opening the day marginally higher, Indian share markets witnessed volatile activity and are currently trading flat with a positive bias. Sectoral indices are trading on a mixed note, with stocks in the oil and gas sector and the stocks in the capital sector witnessing maximum buying interest. Stocks in the FMCG sector and stocks in the metals sector are leading the losses.

The BSE Sensex is trading up by 47 points (up 0.2%) and the NSE Nifty is flat. Meanwhile, the BSE Mid Cap index is trading down by 0.1%, while the BSE Small Cap index is trading up by 0.1%. The rupee is trading at 64.29 to the US$.

In news about the economy. According to data released by the Central Statistics Office (CSO), retail inflation as measured by the Wholesale Price Index (WPI) sunk to 2.17% in May, charting a steady decline from 5.9% in March 2017.

Wholesale inflation rate, measured by the wholesale price index (WPI), is a marker for price movements in bulk buys for traders and broadly mirrors trends in shop-end prices.

The index portrays new series of WPI data released by the government last month, with 2011-12 as the base year, replacing existing the base year of 2004-05.

WPI continued to slide, and was lower than 3.85% seen in April.

The fall WPI, coupled with lower retail inflation and industrial production data may put pressure on the Reserve Bank of India (RBI) to change its policy stance to accommodative from neutral at present. The RBI, which kept its key lending rate unchanged last week, has warned of a looming inflation threat over the next 6-12 months, leaving the door ajar for an interest rate hike in 2017-18.

A lower inflation rate, can indicate a slowdown in demand and weaker economic activity.

WPI Inflation Continues to Slide

Among the WPI components, inflation of food decreased from 2.9% in April to 0.15% in May 2017, mainly contributing to the fall in WPI inflation. The inflation for fuels fell to 11.7% in May from 18.5% in April.