WPI Inflation for the month of July 2015 slumped to -4.05% as compared to -2.05% in June, showing a sharp contraction, raising prospects of the Reserve Bank of India (RBI) cutting interest rates.

The index for ‘Food Articles' group declined by 0.6 percent, thanks to a decline in prices of fish, fruits and vegetables and chicken.

The index for fuel and power saw a decline of 2 per cent, due to lower furnace oil, aviation turbine fuel. The index for manufactured products which has the highest weightage in the index declined by 0.3 percent.

Today's fall in the WPI index along with a sharp slump in the CPI inflation has raised the prospect of a interest rate cut by the Reserve Bank of India (RBI) outside of the policy.

Stock markets turned buoyant even ahead of the WPI data on hopes that there would be an interest rate cut by the RBI. The Sensex was trading with huge gains of 372 points.

GoodReturns.in