Click to play videoNew Delhi: Inflation figures are inching close to 12 per cent, industrial output is down nearly half of what it was last year.
Friday saw the three I's - which hit sentiment hard. First came Infosys results at 9:00 AM, which hit market sentiment and technology stocks. Then at 11:30 AM, inflation rose further to 11.89 per cent.
However, the hardest knock of all was that industrial growth has slowed down much more than expected. At five per cent, it was half of what it was earlier.
“The worrying factor is despite the slowdown in overall IIP numbers, we have been witnessing a robust number as far as the capital goods sector is concerned. But the number that has come today shows a considerable decline also,” says Head and Senior Economist, Sunil K Sinha.
“Growth is beginning to happen. It will be universal growth for the next three quarters,” says DG, National Council for Applied Economic Research, Suman K Bery.
The question whether the slowdown is going to be alarming will take some more time to become clear.
What is clear is that inflation is showing no signs of stopping in its tracks.
“RBI action is very clear from here on. With oil prices not looking to ease off in the near future, it is quite clear that RBI will have to tighten monetary policy even more. One could see another 50 basis point hike in Repo rate, and in terms of yield curve action, we would see upward pressure on interest rates continuing,” says Senior Economist ABN AMRO Bank, Gaurav Kapur.
Finally, Infosys sentiment to 'fog on the windscreen' when it came to business in the US has been replaced by 'cautious optimism’.
Meanwhile, it seems that the outlook on Indian economy is becoming hazier and if the trend continues, the consumers and investors may suffer.
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