Indian stocks edged down 0.11 percent in choppy trade Thursday on concerns that the central bank could lift interest rates as food prices rise, dealers said. The benchmark 30-share Sensex closed down 18.52 points at 16,894.25.
India's food inflation rose 19.95 percent - the highest level in more than a decade - for the week ending December 5, with staples like pulses and potatoes all affected. Analysts have forecast the Reserve Bank of India could tighten monetary policy in coming weeks to curb inflationary pressures.
Food inflation has been rising after India witnessed its driest monsoon season in over three decades, and post-monsoon flooding in some states damaged crops and caused shortages. Indian markets have seen a surge in foreign capital flows, which have pushed the Sensex up nearly 75 percent this year. The Sensex has more than doubled since March. Gainers led losers 1,628 to 1,173 on turnover of 44.97 billion rupees (961 million dollars).
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