Interview: India is getting back to speed

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Weekly Review: A short-term decline might be on the cards

The US market fell very sharply last week, which might drag down Indian markets as well

The market started the week with a sharp rise. However, the lower-than-expected quarterly performance of Infosys and weak global markets limited the gain in the later days of the week.

The BSE Sensex and the Nifty were up 1% each over the week. Major index gainers were realty and consumer durables and the major losers were PSU and oil & gas. The top five gainers in the BSE 30 stocks were DLF, Tata Motors, Tata Consultancy Services, Jaiprakash Associates and ICICI Bank. Top losers were Bharti Airtel, Maruti Suzuki India, Reliance Communications, Infosys Technologies and Mahindra & Mahindra. 

Industrial output, as measured by the Index of Industrial Production (IIP), in May, was up at a slower-than-expected 11.5% from a year earlier, government data showed on Monday. Manufacturing output rose an annual 12.3%, the statistics office said. Mining output was up 8.7% and power generation rose 6.4%. Production of capital goods rose 34.3% year-on-year after an annual rise of 72.8% in April 2010, while consumer durables output grew 23.7%, down from a 37% rise in the previous month. Analysts opine that IIP for the second half of the calendar year 2010 will slow down to 6%-9% and end the fiscal 2010-11 with an average growth of around 9%.

The steel ministry wants a ban on iron exports as they are non-renewable. India produced about 230 million tonnes (MT) of iron ore in the last fiscal, of which around 106MT were exported, mainly to China. This was announced by the ministry after the Karnataka government wrote a letter for banning iron ore exports.

The Reserve Bank of India (RBI) is likely to soon announce a sunset clause with a deadline of 30 June 2011 for all loans in the erstwhile benchmark prime lending rate (BPLR) system to migrate to the new base-rate model.

The advancement of the monsoon has increased the sown area of major kharif crops, including paddy and coarse cereals. As per official data, paddy sowing picked up in the past one week with acreage going up to 72.3 lakh hectares till 9th July, which is 3.6 lakh hectares more than the same period last year. Acreage of coarse cereals increased to 58.2 lakh hectares, 5 lakh hectares more than the year-ago period.

The government has set up a committee headed by Reserve Bank of India (RBI) deputy governor Shyamala Gopinath to review the structure of the National Small Savings Fund (NSSF). The panel will review the existing terms of loans extended from the NSSF to the Centre and States and recommend the changes required in the arrangement of lending to the net collection of small savings to the Centre and States. 

Singapore's economy grew at a 26% annual pace in the second quarter after a record surge in the previous three months, spurring the nation's currency. Growth was revised to 45.9% for the first quarter, the fastest since records began in 1975, the trade ministry said.

Back home, finance minister Pranab Mukherjee said that inflation would come down to 5%-6% by the year end. Wholesale price index (WPI) based inflation inched higher to 10.55% in June, owing to the pass-through effect of the hike in prices of petroleum products announced on 25th June. However, the double-digit inflation in June could be partly attributed to a low base in the year-ago period when inflation was at -1.01%, meaning that even a small increase now would seem large.

Meanwhile, annual food inflation was up to 12.81% for the week ended 3rd July while fuel inflation was up 14.27%. In the previous week, food inflation was at 12.63% and fuel inflation was at 18.02%. While vegetable prices fell by 5.70% year-on-year, costlier pulses and cereals kept food inflation higher.

China on Thursday reported a slowdown in second-quarter economic growth. Gross domestic product (GDP) grew 10.3% over the same period a year earlier, slowing from the 11.9% annual growth recorded in the first quarter.

The Empowered Group of Ministers (EGoM) on food, which is expected to meet next week, will decide on considering the imposition of import duty on wheat and partial lifting of the two-year ban on export of non-basmati rice.

Cement prices are likely to soften on impending elections in the east and the end of Commonwealth Games-driven demand in the north. Presently, major impact has been witnessed in the southern region, due to huge capacities commissioned and lack of demand.

Stock market regulator Securities and Exchange Board of India (SEBI) on Thursday allowed physical settlement of both stock options and stock futures. At present only cash settlement of derivatives is allowed. It said that stock exchanges will also have flexibility to offer a combination of cash settlement for stock options and physical settlement for stock or physical settlement for stock options and cash settlement for stock futures.

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COMMENTS

rajesh

7 years ago

Pls look into the manipulation in brazen minal engineering
the promoters hadbeen earlier banned for 3 years by sebifor manipulatingtheir shareprice
3 years later after thestock ban theyhave stareted DOING EXACTLY THE SAME ANTCIS that got them banned and have ramped uptheprice from 8 odd rs to 100

New Instruments: RBI Flags off IDRs

Standard Chartered Bank (Stanchart) of the UK is in line to become the first issuer of Indian...

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