Indian Economy - News & Updates

[Splurgenxs]

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according to the IMF Afghanistan is growing at 22.6%

Singapore economy in 14.7% growth

Reason===Low base value

[SpArK]

The Hindu : Business / Industry : India seeks German cooperation in clean auto fuel

[SpArK]

Aditya Birla Group Acquires Swedish Firm for $415 Mn

[F-16_Falcon]

Industrial growth slows to 3.6% in Feb - Times Of India
Industrial growth slows to 3.6% in Feb
TNN, Apr 12, 2011, 02.05am IST

NEW DELHI: Industrial growth moderated to 3.6% in February, compared to 15.1% a year ago on account of a slowdown in manufacturing and mining sectors. Within manufacturing, the real culprit was capital goods, with production falling over 18% this February along with a slower pace of expansion in basic and intermediate goods.



Even the government seemed to be on the same page. "Our expectation is that the next month (March) will not be a good month. So, there is one more difficult month ahead for us which is the month of March... we will see no growth in the industrial sector. But I do expect a big turnaround in the month of April," chief economic advisor Kaushik Basu told reporters.

This is the fourth straight month when growth has remained below 4%. Though economists had expected growth to remain in low single digits, the numbers released by the Central Statistics Office on Monday were lower than their projections. Economists said part of the reason for the moderation was the base effect. Even in good times, industrial growth is 9-10% but with industrial output expanding 15% in February 2010, the base effect was a huge factor, economists said.

In addition, higher interest rates are affecting capacity addition decisions. "The impact of higher interest rates will play out through 2011," said D K Joshi, chief economist at rating agency Crisil. On Saturday, R P Singh, secretary in the union industry department, had said at a seminar that there was need to strike a balance between growth and inflation as very high interest rates could affect the former.

Economists also said that companies were waiting to gauge if the consumption boom would last and were doing so by using every bit of capacity available with them. The moment they face an even more severe crunch, they would automatically start expanding capacity even if interest cost remained high.

"Impact of environmental clearances and transportation bottlenecks in the coal sector, coupled with a high base effect, resulted in mining production slowing to 0.6%," added Citi economists Rohini Malkani and Anushka Shah. Notwithstanding the slower pace of expansion in industrial production, economists said that the central bank is expected to continue with its rate hike cycle. The overall expectation is that key policy rates would go up by another 25 basis points (100 basis points equal one percentage point) when RBI releases its annual policy next month. After all, they said, inflation is a bigger threat.

[SpArK]

Merger norms will give fillip to industrial growth: CUTS

[tallboy123]

Indian economy grows at 10.4% in 2010 .period.

[F-16_Falcon]

Indian economy grows at 10.4% in 2010 .period.

this so called growth is just fantasy. your industry is shrinking and inflation rising.

[President Camacho]

this so called growth is just fantasy. your industry is shrinking and inflation rising.

Mr. Super Economist, why did you miss out this particular para from the article?

Consumption driven sectors such as consumer goods, including automobiles and white goods, consumer goods and non-durables, however, reported a more rapid growth in February 2011 compared to the year-ago period. "Continued weakness in lead indicators such as intermediate goods points to sustained sluggishness in manufacturing... we expect headline industrial production growth prints to remain weak in the coming months," Barclays Capital economists Siddhartha Sanyal and Kumar Rachapudi said in a research note.

Apparently, it is not our fantasy, but only your jealousy

[F-16_Falcon]

Rupee could come under pressure if risk appetite continues to weaken
Published: Monday, Apr 18, 2011, 2:14 IST
By Gaurav Kapur | Agency: DNA

http://www.dnaindia.com/money/report...weaken_1533030

Fears of sovereign debt default, uncertainty about central bank policy and disappointing corporate earnings weakened investor confidence last week, prompting a shift away from global equities to the safety of US and German government bonds and gold.

The US dollar dropped to its lowest level for 16 months last week as the prospect of the US Federal Reserve maintaining its ultra loose monetary stance continued to undermine the greenback.

The greenback also suffered as weak US economic data, including worsening trade and retail sales figures, and lower-than-expected core consumer price inflation pushed US treasury yields lower. The dollar index, which tracks its progress against a basket of six leading currencies, fell 0.4% during the week, hitting a 16-month low of 74.617 on Thursday.

Activity of emerging market central banks, especially in Asia, is exacerbating the greenback’s fall. Emerging market central banks were diversifying a portion of their recently acquired foreign exchange reserves away from the US dollar into other large liquid currencies, such as the euro and the Australian and Canadian dollars. Emerging markets’ central banks have been intervening to stem the rise in their currencies and have built up dollar reserves in the process.

Those diversification fears were heightened after China revealed that its foreign exchange reserves had risen to a record $3,050 billion by March end.

The dollar also dropped to a 15-month low against the euro on Wednesday, with the single currency showing little reaction to fresh worries about the fiscal health of countries on the eurozone periphery later in the week. Interest rate differentials remain the primary driver for the euro against the US dollar.

Over the week, the euro eased modestly from a 15-month high struck against the greenback at the start of the week, as interest rate differentials provided support.

The US dollar appreciated against the pound too, rising 0.3% over the week as expectations of monetary tightening by the Bank of England were pushed back after consumer price inflation came in lower-than-expected. The greenback fell 1.9% against the yen over the week and lost 1.5% against the Swiss franc, as falling US treasury yields weighed on the US dollar.

In the local inter-bank market, rupee depreciated moderately against the US dollar. In a short trading week the rupee fell by 0.6% on the back of weakness in the local stock market and general weakness in other emerging market Asian currencies. The Indian unit was provided some support by FII inflows and dollar selling by corporates. Over the week, the rupee-dollar pair traded in the range of 44.04-44.5875.

This week is relatively quiet in terms of US economic data event risk, which suggests that the greenback could remain within a tight range against the euro. Any significant moves in risk appetite could, however, easily push the US dollar in either direction through the coming week.

The CFTC Commitment of Traders data shows speculative positioning in the US dollar is at its most bearish since 2007 and deleveraging across financial markets could bring the long-awaited greenback reversal. Yet speculative positioning has remained at extremes for quite some time now as the greenback continues to decline against the euro and other key counterparts.

Financial markets could see sharp volatility on significant surprises in the coming week’s US housing data. The lack of any top-tier economic data releases, nonetheless, leaves little foreseeable justification for a substantial US dollar breakout in either direction. The S&P 500 Volatility Index (VIX) trades near its lowest levels since the onset of the global financial crisis in late 2007, and the US dollar is unlikely to rally given such clear financial market appetite for risk.

As the second-lowest yielding currency in the developed world, the US dollar remains a primary candidate for low-interest borrowing and subsequent investment in higher-yielding assets. Market participants’ attention will remain on the developments in the broader risk appetite and only a substantive sell-off in the equities would trigger a reversal in the US dollar against the euro and other major counterparts. Alternatively, the greenback could bounce on an important shift in US Federal Reserve interest rate expectations. Given recent Fed rhetoric, however, there are relatively low odds on such an important shift through the foreseeable future.

In the local market, market momentum may remain in favour of the rupee. However, any weakness in the equities market on the back of the ongoing reversal in global risk appetite could break that favourable momentum. Moreover, with inflation touching 9% again in March, concerns about monetary tightening by the RBI and slowing corporate earnings could push the FIIs to remain on the sidelines and become more cautious about investing in India. That would be negative for stocks and rupee. Any reversal in the US dollar in the overseas market would also push the rupee lower. Rising oil and gold prices are also adding to the pressure from the merchandise trade deficit. Over the week, the rupee-dollar pair would trade in the range of 44.25-44.75 with a mild appreciation bias for the rupee.

[desiman]

hmm looks like someone is on a Anti-India trolling fest today.

[SpArK]

Inflation is root of all evil in economy.. it should be brought down.

[F-16_Falcon]

hmm looks like someone is on a Anti-India trolling fest today.

what trolling you see here? me and bilalhaider are putting some good figures.

[bhagat]

wow you guys turned this world affairs thread into indian affairs thread.....

[President Camacho]

what trolling you see here? me and bilalhaider are putting some good figures.

Chor ki daarhi me tinkaaa

[Chinese-Dragon]

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hmm looks like someone is on a Anti-India trolling fest today.

And the response will be Indians posting anti-China threads, like what happened last time.

Because they want to respond, but lack the guts to post trolling threads about Pakistan.