IIP data dampens market sentiments

by khalid on 10/10/2011 · 1 comment

The Index of Industrial Production (IIP) Figures will be announced shortly in the markets and it has already dampened the sentiments of the people. A good IIP numbers shows positive industrial growth.

IIP is an index which determines industrial growth in various sectors of the Indian economy. The sectors include power, mining & manufacturing. The IIP  index reflects the increase in industrial production excluding services. It can also be classified on consumption basis of capital goods, consumer goods, intermediate goods & basic goods. In manufacturing it includes wood furniture, machinery, food etc. Power sectors include generation & transmission of electricity (from solar, thermal hydro and other sources). In mining it includes oil, metals and mining of coal.

The growth in Indian Industrial production fell sharply touching a 2 year low of 3.3 % in the month of July from a 8.8% rise during June. The hike in Interest rate by RBI can be considered as one of the key factor for the decline in IIP figures. The capital goods sector declined by 15.2 % in July against  38.2 % growth during the month of June. The manufacturing sector which constitutes over 75 % of the Index increased by 2.3 % in the month of July against 10.8 % during corresponding period last year. The mining sector increased by 2.8 % in July against 9.7 % during corresponding period last year. The growth of consumer goods sector was 6.2 % and power was 13.1 % in July against 7.1 % during June where as the capital goods sector fell by 15.2 % compared to 37.7 % during June.  From April to July industrial output grew by 5.8 percent


“Bell the Bull says: IIP data, Infosys results will determine this week market trend”

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