Higher interest rates ahead can stall Market rerating

Driven by higher GST, higher food prices and increase in petroleum product prices, CPI has jumped by 2.0%MoM to 8.3% in Jul'13. This is the highest increase in headline inflation since Sep'12 (+8.8%YoY). At the same time, core (trimmed) inflation has also jumped to 7.8%YoY in Ju'13 vs. 6.8%YoY in the previous month.