Posts Tagged ‘farm output’

Weekly Update of The Market (15th – 19th February)

Hello Friends, here, we bring you the weekly overview of the Indian as well as of the Global economy and latest global business and industry updates.

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Weekly Update of The Market (15th - 19th February)

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The much awaited gains in global markets which came in the week gone by, was a big relief for investors.

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Improving Australian Jobless rate (falling) to 5.3% from 5.5% & China‘s lending surged to 1.39 trillion yuan ($203 billion) in January, more than in the previous three months together lowered the concerns of global economic recovery and proved to be some of the triggers for the global markets gain.

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European Union statement that it is ready to support Greece somewhat eased pressure but China central bank another move to hike reserve requirement by 50 basis point to rein the credit growth spoiled the mood of the markets.

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Chinese banks disbursed 19% of the lending target in January alone.

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The existing reserve requirements stood at 16 percent for the biggest banks and 14 percent for smaller ones.

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Back at home, CSO expectations of decline in farm output to be contained within 0.2 per cent & robust recovery in industrial performance rejoiced the markets that GDP growth may come even better for the current fiscal year.

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On the flip side, market is cautious from budget outcomes on expected move towards fiscal consolidation.

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High fiscal deficit together with high inflation pose some long term risk for the equity market.

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The much awaited reforms in the areas FDI, BFSI & fuel and fertilizer subsidiary & a roadmap for implementation of Goods & Services Tax & Direct Tax Code can spark the rally in the domestic market.

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In the coming week, we may see some activity in capital goods sector on the back of very good IIP numbers.

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Industrial production witnessed a growth of 16.8% on Year on Year basis while cumulative growth for the April to December period has now inched up to 8.6% over the corresponding period.

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Overall the trend of most asset classes including stock markets around the world is down due to rising dollar index.

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Going ahead in the budget, we expect volatility to increase and markets to see big moves up and down.

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International cues are positive on the fundamental side but Europe problems and stimulus withdrawal along with rising inflation are having negative effect.

One should remain cautious going ahead.

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Nifty faces resistance between 4900-5000 levels and Sensex between 16400-17000 levels.

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A pick up in investor’s sentiments, softer dollar amid expectation of rescue plan for Greece have rejuvenated most of the commodities, especially metals and energy.

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We are expecting a thin trading in the beginning of the week, as US market is closed on Monday on the occasion of โ€œPresident Dayโ€.

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Absence of participation of Chinese market due to celebration of New Year holidays can limit the volatility of commodities further.

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If we talk about the trend, overall commodities may trade in a range now.

Any improvement in Japanese GDP data can give further boost in the prices.

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Stay Tuned for More on weekly updates.

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India Industrial Output Up 7.8% :) FDI Flows to Improve ;)

Indian Industrial output

India’s industrial output INIP=ECI rose by a much faster-than-expected 7.8 percent in June from a year earlier, data showed on Wednesday, driven by higher demand for consumer goods and increased mining activity.

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Industrial output rose for the third straight month and clocked its highest rate of expansion since February 2008.

June output was far better than expectations for a 3.3 percent rise, although economists warned that the rapid pace of industrial growth might not be sustainable despite other recent positive signals.

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Output of consumer durable goods such as home appliances rose 15.5 percent from a year earlier.

Though the deficient monsoon has created an uncertainty about the overall growth outlook, the industrial buoyancy at this pace is definitely a strong positive signal.

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There are signs the expansion in activity continued in July, with car sales rising by a blistering 31 percent. Society of Indian Automobile Manufacturers showed companies sold 115,067 cars during July, compared with 87,901 cars a year earlier.

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India’s manufacturing activity held steady in July, expanding for the fourth consecutive month, a survey by Markit Economics showed.

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But erratic monsoon rains could cloud demand in the economy.

With just over 40 percent of India’s agricultural land irrigated, farm output is heavily reliant on rains but below normal monsoon could potentially hurt rural demand, which accounts for more than half of India’s domestic consumption.

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