Indian vegetable market
Indian vegetable marketReuters

The Modi government, together with the Reserve bank of India, seems to be winning its war against inflation after BJP assumed charge in May this year. Steadily falling prices of vegetable and essential commodities has brought down wholesale inflation to a five-year low of 3.74% in August. The inflation measured on Wholesale Price Index (WPI) was at 5.19% in July and 6.99% in August 2013.

However, even though the WPI August results brought good cheer to RBI and market watchers, the stock indices responded negative after the announcement of WPI on Monday.

The WPI has slipped to a five-year low of 3.74% compared to 5.19% in July. The figure for June WPI inflation was recomputed to 5.66% from 5.43% earlier. However, the central bank's primary concern is Consumer Price Index rather than Whole Sale Price Index, reported Economic Times.

Index August July
Manufactured Products inflation 3.45% 3.67%
Food price index 5.15% 8.43%
Fuel and Power inflation 4.54% 7.4%

While, among 12 Indian stock Indices, only BSE Realty and Healthcare stocks appeared surging during trading hours. At 1 pm on Monday, BSE Sensex dipped 202.78 points at 26,856.26 points; whereas NSE Nifty plunged 55.60 points at 8,049.90 points.