Commodity prices will fall from their high 2010-11 levels as markets respond to these prices and the opportunities for increased profitability that they afford, a joint report by OECD and UN body FAO on Friday said.

But, for achieving it, harvests this year are critical, the report -- OECD FAO Agricultural Outlook 2011-12 -- released on Friday said." A good harvest this year will be critical in bringing more stability to commodity markets," it said. It, however, said restoring market balances may take some time. "Until stocks can be rebuilt, risks of further upside price volatility remains high,"

Nifty below 5400 on Friday

ndian equity benchmarks closed lower for third consecutive session on Friday, with falling about 2% for the week and more than half a percent in today's trade. Oil & gas, technology, auto and select metal companies' shares dragged down the market while buying in banking, power and telecom stocks has limited the downside.


Benchmarks stayed below their psychologically important levels for another session - the 50-share NSE Nifty fell 30.35 points, to close at 5,366.40 and the 30-share BSE Sensex dropped 115.35 points, to end at 17,870.53. Shorts build up in heavyweights could be the reason behind today's downtrend.

Sensex Below 18K

Equity benchmarks extended sell-off on the back of further fall in European markets, reacting to Greek's debt worries. Nifty has broken the 5400 mark - at three-week low, dragged down by heavyweights like TCS, Bharti Airtel, Reliance Industries, Infosys, Wipro, L&T and HDFC Bank, which fell 1-3%. Metal, cement, auto, select healthcare and private banking companies' shares too were adding pressure on the market.

The 50-share NSE Nifty was trading at 5,391, down 56 points and the 30-share BSE Sensex tumbled 172 points to 17,960 on further build up in shorts. European markets like France's CAC, Germany's DAX and Britain's FTSE fell 1-2%.

Nifty recovers on expected rate hikes

Indian equity benchmarks showed some recovery post the RBI policy event as hike in key policy rates by 25 basis points was on the expected lines. The market has already been discounted these hikes.
Central bank Reserve Bank of India has hiked repo (rate at which RBI lends money to banks) and reverse repo (rate at which RBI borrows money from banks) rates by 25 basis points each - on expected lines - to 7.5% and 6.5%, respectively. Cash Reserve Ratio was unchanged.

BSE Sensex was trading at 18,096, down 35 points and NSE Nifty fell 16 points to 5,431.

Food inflation dives marginally

Food inflation has seen a marginal decline in the week ended June 4 from the numbers in the previous week. From the 9.01% figure where food inflation stood on week before June 4, the numbers have fallen to 8.69%.
The fuel inflation, however, is up by a few points at 12.84% versus the 12.46% on a week on week basis.

Here are the highlights:
June 4 Primary Articles Index up 2% (WoW)
June 4 Fuel Group Inflation At 12.84% Vs 12.46% (WoW)
June 4 Fuel Group Index down 0.5% (WoW)
June 4 Food Articles Inflation At 8.96% Vs 9.01% (WoW)
June 4 Food Articles Index up 0.5% (WoW)