June industrial growth figure came out today and it stands at 5.4% versus 8.9% (YoY) versus 4.1% in May so when compared to may this year it was increase of 1 percent or so . While infrastructure output number stands at 3.4% versus 5.2% (YoY).
Sector Growth Figure
Capital goods growth has come out at 5.6 percent (YoY).
Manufacturing growth is at 5.9 percent versus 9.7 percent (YoY).
Consumer goods growth is at 10 percent
while mining growth is at 2.9 percent (YoY).
Electricity growth is at 2.6 percent (YoY).
Inflation for the week ending july 26th has come to 12.01 percent for the past 4 or 3 weeks inflation was sticking below 12 and finally it has passed 12 percent , i just saw someone was looking for inflation data sorry this is late for the day .
Inflation is at 11.98 percent compared to 11.89 percent , hmm thik its just playing games here going up and down i just .80 to .99 of 11 percent may be its 12.00 and they dont want to give that figure as it has not toucvhed that yet this year , but everyone expected it more than 12.
Sensex might dip today first half as the global cue is weak and oil has gone up by a dollar a barrel and also the important RBI monitary policy is scheduled today at noon , so any information from that meeting might increase or decrease the points in sensex.Market is expecting that RBI may further hike short-term interest rates or the repo rate ,cash reserve ratio (CRR). RBI had increased short-term lending rates for banks and CRR by 0.5% each on 24 June 2008 which you would have seen in my earlier post , think they would use this option again to inflation which doesnt seem to go down from 11 percent.
Inflation figures came in on thursday and the figures are almost the same as previous week may be when they adjust the figures after 1 month or so you can see the difference , Inflation for the week ending July 12 is at 11.89 percent versus 11.91 percent.
Inflation figures came out yesterday which together with the industrial growth rate dragged the market down by more than 450 points ,Inflation touched 11.89 per cent for the ending June 28, up from 11.63 per cent for the previous week. High prices of fruits and vegetables, pulses and edible oils might have increased the inflation for this week.
Inflation data which was one of the important factor that was driving the market for almost 2 to 3 months dint matter much for the market today may its because it was not a huge increase compared to previous week, India’s wholesale price index rose 11.63 percent in the 12 months to 21 June 2008, above the previous week’s of 11.42 percent.
What is Repo Rate ?
It is the rate at which banks borrow from the RBI , “repo” means repurchase agreement, and the “repo rate” is the current interest rate for secured overnight or very short term secured financing involving the sale and repurchase of securities.
RBI came out with the news that its going to raise the repo rate by 50 basis point and also the CRR by 50 basis points yesterday after the market hours , this is one of the many key factors that will help in controlling the inflation and other economic data that is worrying the indian economy.This CRR hike will take effect in two stages. First, a 25 basis point hike on 5 July 2008, and another 25 basis point hike on 19 July 2008. By 19 July 2008, CRR will stand at 8.75%. This would almost suck 16000 crores from the banking system if the full 50 basis point is implemented .
So Repo Rate stands at 8.5 percent
CRR Rate stands at 8.75 percent
Inflation was the data that market was waiting for today anything below 10 would have cheered up the market as it was expected around 10 , but the percent that thwy have released for week ending 7 June 2008 was 11.05 percent. The reading was the highest in 13 years since 6 May 1995, when it was 11.11%.I was expecting the inflation would be almost the same because the petrol price hike was done on june 5th thought the inflation data would be day ening june 5th but it was 2 days after the petrol price hike which would have increased all the food material price .
India’s wholesale price index rose 8.75 per cent in the 12 months to May 31, above the previous week’s annual rise of 8.24 per cent, government data showed on Friday.this is all before the raise of oil prices , you can see it reach 9.00 and 9.50 soon.
Industrial output rebounded strongly to 7% in April 2008 year-on-year from the previous month’s provisional 3% rise.The capital goods sector grew 14.2% in April 2008 as against 10.9% growth in April 2007.Dont even compare Industrial output with the value that was there in April 2007 , then market will really fall again , Ok there is this inflation data that is coming in today .
Crude oil which is almost writing stories in every countries Economy saw a big spike today in NYNEX which they say is one of the first and it surged more than 10 dollars a barrel touching a record of USD 139.12 a barrel during trading. I dont understand the reason they are saying for the crude price or true atleast for one they are saying US employment rates is getting high , if thats the case why would they spend much on oil and drive around .Morgan Stanley has predicted the oil price would reach even 150 dollar in a month or so ,think we have to stop trading equity and buy oil bonds or something .
Inflation data came out on friday which stood at 8.24% Vs 8.10% for week ended May 24. This is all before even the Oil price raise kicks in to the food prices , already im hearing that the vegetable prices have started raising so in 2 weeks time we can see the Inflation reaching 9 percent or so , again our finance minister Mr P. Chidambaram is saying that he is doing all things to have the inflation down , But not sure what is is doing to get it down , we will see how things are going from here .
Finally the government came out with the decision of oil price hike as most of the oil companies where going on loss , they not only did hike it but also have cut the excise duty also on oil.
Price Hike
Petrol prices up by Rs 5,
Diesel up by Rs 3 and
LPG price up by Rs 50 per cylinder.
Duty Cuts
Duty cuts are bringing a loss of revenue of about Rs 22,660 crore for the remaining 10-month period for this financial year ending march 2009.
>Customs duty on crude will be made nil from 5%.
>Customs duty on HSD and petrol will be reduced from 7.5% to 2.5%.
>Customs duty on other petroleum products will be reduced from 10% to 5%.
>Finally, excise duty on HSD and petrol will be reduced by Re 1 per litre each. So, Re 1 on petrol and Re 1 on diesel
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