Sorry been away again due to death of my maternal grandmother.
Fed was expected to reverse the pessimism which had gripped global markets due to tapering worries. More so because of one simple reason - Obama is fast losing support in the USA and debt ceiling and other worries which will soon re-appear will be a heavy shock if fed tapers.
Regarding RBI i would like to note i am very happy the way Rangarajan has gone about things with this policy though i was in two minds if he would do what he has done. People knowing his background know well he is a serious inflation hawk. But i did expect him to run according to the wishes of GOI which he has not. So thats a good sign. He has moved artificial temporary tightening partially and will continue to do so and has imposed a more generic tightening via Repo. The yield curve high at short end and lower at long end becomes a problem and he does not want that to happen.
I found a very very good article btw about how our country , under Chidambaram and much to the liking of people here, is being moved from a bank based system to a financial markets run economy and that people of India will not let it happen just yet atleast.
How does an industry like Electrical machinery grow 80%. Numbers are difficult to believe and some industries see large up and down months. To suit the current upbeat mood higher numbers can be brought and can leave the bad news for latter. Its a numbers game.
IIP, July 2013 (Index was +2.63%)
The larger impact was in the bigger weighted items of Apparels and Garments, which increased IIP by +0.81% and +0.47%.
This could be because of a big revival in garment exports after the slide in the rupee. If so, I would expect August IIP to be just as robust.
The impact of rubber insulated cable cannot be undermined (0.41% is still 1/6th of the entire IIP increase!). In fact it’s parent category, Electrical Machinery, was up 83.65% and provided for 1.66% of the total increase in IIP (which was up +2.63%). So yes, we’ve seen a surge in things Electrical.
Impact: If Apparel/Garment production is up, it could mean a pretty huge increase in revenue for garment exporters. If electrical machinery is up a lot, that might point to a revival in electrical equipment or power. This should start getting visible in revenues, when they are revealed in October. source. capitalmind.in
Good IIP aided by some portion of Capital goods growing 300% leading to Cap goods growth of 15%. That apart a decent nubmer still but not good as many appear from the headline numbers.
CPI is still a pain.
Modi is finally the PM candidate of BJP so the formal announcement of the inevitable has happened.
Re finally seems to be stabilizing for last 2-3 days but still to oearly to call after a sharp fall and a shar prise t orecover part of the lost ground. Re at 62-64 seems more realistic than 70.
Jewlery exports fallen 20% this month. As expected all the random curbs is affecting the industry. It is a major employer so job losses can be expected. However in our huge unemployed population it may not be of much significance % wise.