Indian shares may move upwards if inflation eases further

Indian shares may edge upwards next week as worries about rising oil prices and inflationary pressures are expected to ease marginally, after a dip in India's inflation level this week, dealers said. On Thursday, India's inflation decelerated to 12.4 percent for the week to August 16, against 12.63 percent the previous week.
This level is however considerably higher than the central bank's end-of-year target of seven percent. "Much of the near-term trend will be determined by global trends and oil prices. If local inflation remains rangebound, equities could see some gains," said a dealer with brokerage Jamnadas Morarjee.
For the week to August 29, the benchmark 30-share Sensex index rose 1.13 percent, or 163.04 points, to 14,564.53. "In the absence of any further shock in commodity prices, we expect wholesale inflation to peak-out in the third quarter at 13-14 percent. In the last quarter, we could see significant easing in inflation," said Siddhartha Sanyal, economist with Edelweiss Securities.