India's manufacturing sector activity hit the highest level in eight months in July, driven by a significant rise in business orders, a monthly survey said on Monday. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index rose from 53.9 in June to 56.4 in July, reflecting the strongest improvement in the health of the sector in eight months. The July PMI data pointed to an improvement in overall operating conditions for the 13th straight month.
The country's gross domestic product (GDP) growth is likely to be 8.8 to 9 per cent in the current financial year, driven by agriculture and industry sectors, Care Ratings said in a report. The country's economy had contracted by 7.3 per cent in fiscal 2020-21. The agency said the outlook for the Indian economy on almost all counts in FY22 would look seemingly better than FY21 on account of the negative base effect.
Pushed by rising prices of essential kitchen items, the retail inflation rose to an eight-month high of 7.34 per cent in September, making the RBI's task to push growth by reducing the interest rate even more difficult in coming the days. The Consumer Price Index (CPI)-based inflation was 6.69 per cent in August and 3.99 per cent in September 2019. Inflation has been hovering above 4 per cent since October 2019.
Inflation in food articles, fuel and power contracted in July.
Lower income groups earning less than Rs 100,000 a year are yet to recover as are those earning between Rs 100,000 and Rs 200,000.
The RBI targets inflation at 6 percent by January 2016 and 4 percent for 2017/18.
Inflation pegs down currency value, re-allocates resources, reduces potential economic growth and leads to the attrition of gross domestic savings.
As per the data released by the NSO, the overall food inflation rose to 14.12 per cent in December as against (-) 2.65 per cent in the same month of 2018.
In October, CPI inflation was 5 per cent.
Inflation rate in fuel and power segment was (-)16.50 per cent.
For protein rich items such as meat and fish, eggs as well as milk and products, the inflation in May slowed compared to last month
India's manufacturing sector activity moderated in April, but still recorded the second fastest improvement in operating conditions in three-and-a-half years supported by buoyant demand, a monthly survey said on Thursday.
Stocks of Indian steel companies are reeling from pricing pressure that is partly blamed on cheap imports. The stocks have declined up to 9 per cent on the NSE in one month, likely allowing investors an opportunity to use the correction to enter the pack as pricing pressure eases. "In steel or any other commodity, if prices or spreads are nearing their bottom, it can be an opportune time to invest in those stocks.
Trumponomics, poor growth, and high valuation certainly don't make a bullish recipe for Indian markets, warns Debashis Basu.
The Reserve Bank is likely to maintain status-quo on the key interest rates for the third time in a row in its upcoming bi-monthly policy review despite the US Federal Reserve and the European Central Bank hiking benchmark rates, as domestic inflation is within the RBI's comfort zone, say experts. The borrowing cost which started rising in May last year has stabilised with RBI keeping the repo rate unchanged at 6.5 per cent since February when it was raised from 6.25 per cent. In the previous two bi-monthly policy reviews in April and June the benchmark rate was retained.
More rate cut by RBI unlikely this fiscal, say Ind-Ra
'There are occasions when the prices of individual items like food raise inflation; then supply-side measures must be taken.' 'But if there is continued inflation, it means liquidity is aggravating the situation.'
The WPI inflation stood at negative 2.4% in May 2015, compared with a negative 2.65% in April 2015.
As India looks to mend its Covid-battered economy, one thing that will grab the attention of all concerned is the path that both wholesale and retail inflation will follow. Even the Reserve Bank of India in its latest policy statement said, "Going forward, the inflation trajectory is likely to be shaped by uncertainties impinging on the upside and the downside.
IMD expects day temperatures to remain above-normal in select regions across the country between March and May 2021.
Among food articles, vegetable prices surged by 69.69 per cent mainly on account of onion, which witnessed 455.83 per cent jump in prices, followed by potato at 44.97 per cent.
The states that witnessed high CPI-based inflation rates were Lakshadweep, Tripura, Odisha, Uttar Pradesh, Kerala, Madhya Pradesh, Puducherry, Tamil Nadu, Rajasthan, Manipur and Mizoram.
The consumer price index has been in double digits for much of the past year, and was 9.8 per cent in September.
The HSBC/Markit Purchasing Managers Index for the services industry inched up to 47.2 in November from 47.1 in October, the fifth sub-50.0 reading and indicated an output contraction across the Indian service economy.
Banks, the biggest component of the Indian equity market, are now trading at a big discount to the benchmark indicesThe BSE Bankex index, which tracks the share price of the 10 top listed banks, is trading at a trailing price to earnings (P/E) multiple of 15.3X, nearly a 40 per cent discount to the BSE Sensex current P/E of 24.37X. This is the biggest valuation gap between the two indices in at least 10 years. Similarly, the BSE Bankex price to book ratio (P/B) of 2.22X is 40 per cent lower than the current Sensex P/B ratio of 3.61X.
Half the stocks in the Nifty 100 index have seen a reduction in their target price by analysts this year due to fears of lacklustre earnings growth and uncertain economic environment. Adani Green Energy, FSN E-Commerce (Nykaa), Adani Ports & SEZ and Indus Towers are among the companies that have seen the maximum cut in TPs during the first three months of calendar 2023, shows Bloomberg data. On the other hand, Canara Bank, JSW Steel and Bank of Baroda have seen the highest increase in TPs.
The country had imported 5.5 million tonnes of pulses last year.
Elevated food price-led inflation could become a sore point for markets, which they seem to be ignoring at current levels, observe analysts. Retail inflation in India - as measured by the Consumer Price Index (CPI) - came in at a three-month high of 6.52 per cent in January 2023, compared with 5.72 per cent in December and 5.88 per cent in November 2022. The inflation print for February, according to Madan Sabnavis, chief economist at Bank of Baroda, will be critical for the Reserve Bank of India's monetary policy committee.
Costlier fruits and vegetables such as onions and tomatoes pushed retail inflation to a nine-month high of 11.24 per cent in November, making it harder for the Reserve Bank to lower interest rates.
Had you invested Rs 10,000 each in JSW Steel, Titan Company and Bajaj Finance 20 years ago, when they were just penny stocks (trading below Rs 10), you would have become a millionaire by now.
Indian passenger vehicles market registered record wholesales of 43 lakh units in 2024, with companies like market leader Maruti Suzuki, Hyundai, Tata Motors, Toyota Kirloskar Motor, and Kia posting their best-ever annual domestic sales. The continued growth of SUVs, along with rural markets playing a key role in driving up car sales, helped the industry better the previous best of nearly 41.1 lakh units posted in 2023.
Companies in the banking, finance sector and insurance (BFSI) sector have underperformed on the bourses despite leading the earnings growth charts in the post-pandemic period. This has created a dichotomy between their earnings and share prices. BFSI companies have never been less expensive than the rest of the equity market.
Inflation moderates, but a rate cut is unlikely.
According to a statement available on the Ministry of Statistics and Programme Implementation website, gross domestic product, consumer price index and index of industrial production will now be released at 5.30 in the evening.
The industrial production grew by two per cent in September, mainly on account of better performance by power and mining sectors.
US economic growth slowed sharply in the fourth quarter.
The impact of fiscal measures announced by the government to contain inflation will be seen in the next few months because of the base effect, reports Indivjal Dhasmana.
'As the markets are expected to remain jittery in the near term, we advise investors to use this opportunity to enter quality largecaps from a long-term perspective.'
India's manufacturing sector activity contracted for the third straight month in October amid falling levels of production and new orders, as the business climate within the country remained tough, an HSBC survey said on Friday.
The market believes there will soon be another offer to buy the bonds.
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