Dalal Street

Industrial Production (IIP) growth decelerated to 5.6%YoY in August from 15.2%YoY in July (revised upwards from 13.8% YoY earlier) and 5.8%YoY in June 2010. One of the predominant factors in driving down growth was a sharp fall in the capital goods index (-2.6% Y-o- Y for Aug vs 72.0% Y-o-Y in July).

Amongst other components, the consumer non durables sector continued to be weak, although durable goods growth remains strong. Intermediate goods, which generally lead the headline index by 2-4 months and has been on a moderating trend, inched slightly (more…)

Analysts across the street are hiking Khariff farm income growth by 20-25% with a better-than-expected harvest likely in October-November. Summer farm income growth has already likely doubled to 18.9% from 09 on agflation.

Rains 102% of normal – have raised yields to water a crop that is far larger than what the increase in sowing suggested. The biggest gain should accrue to cotton farmers who should enjoy both a 39.6% larger crop as well as higher prices. Pulses farmers will see a (more…)

Current account deficit continued its widening trend in Q1FY11, reaching USD 13.7 bn against ~USD 13 bn in the previous quarter. It was ~3.7% of GDP, which is on the higher side, historically. Among broad components of the current account, merchandise balance deteriorated, while invisibles improved compared with the previous quarter.

The monthly incoming trade data suggest that trade deficit continues to widen in Q2FY11 and, therefore, until invisibles improve markedly, current account deficit could widen even further in Q2FY11. On the currency side as well, while falling domestic inflation (more…)