Growth pegged at 7.6% for FY13 :: CSEC Research

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Growth pegged at 7.6% for FY13

Indian bourses opened on a positive note ahead of key macro events. The S&P CNX nifty tested 5500 mark on the higher side. However, nifty failed to close above this mark as market fell lower after the budget announcement. The volumes were on the higher side. FII's remained as Net buyers for Rs 6,640.00 millions while the DII continue to sell their positions for Rs 4,870.00 million. Amongst the sectoral indices banked declined sharply on account of RBI stance on rate cut. Though the pause on rate cut was in line with streets expectation Interest rate sensitives declined on the back of hawkish tone by the RBI Governor.

On the macro front, the wholesale price index, India's main gauge of inflation, edged up a faster-than-expected 6.95% from a year earlier in February after a spike in vegetable prices fanned food inflation.  But non-food manufactured inflation, which the central bank uses to gauge demand-driven price pressures, slowed to a 14-month low of 5.8% from 6.7% in January. Indian IIP registered a brisk growth of 6.8 per cent for January 2012, a rate much higher than the expected 2.1 per cent by experts, as well as the 1.8 per cent expansion in December 2011. Data showed that manufacturing grew at a feisty 8.5 per cent and electricity at 3.2 per cent over the corresponding period in the previous year.

Budget for the year 2012 -2013 was presented on Friday. Indian markets considered budget as a non event. The Finance minister in his budget speech has stated that in the following years the fin min has planned to cap subsidy at 1.75% of India’s GDP. He also intimated accelerate reforms and state asset sales and boost infrastructure spending. The economy would expand by 6.9% in the current fiscal year ending in March, with growth accelerating to 7.6% in the financial year running from 2012 to 2013.

Going ahead, Indian market is likely to mirror the happenings in the global market.

Regards,

CSEC Research