Bloomberg News

Trade Data, Food Inflation, Manufacturing: India Week Ahead

October 02, 2011

Oct. 3 (Bloomberg) -- India will release trade data for the month of August today, while the weekly food price inflation figures and monthly manufacturing output data are slated later.

India’s export growth slowed in August, according to figures released last month by Rahul Khullar, the commerce ministry’s top bureaucrat. Merchandise exports rose 44.2 percent to $24.3 billion, Khullar said. That compares with an 81.8 percent jump in July, according to data compiled by Bloomberg.

India’s food inflation accelerated for the first time in four weeks in the seven days ended Sept. 17 as prices of onions, potatoes and vegetables climbed, maintaining pressure on the Reserve Bank of India to boost interest rates. An index measuring wholesale prices of agricultural products gained 9.13 percent in the period from a year earlier. Data for the week ending Sept. 24 will be released in New Delhi later this week.

The HSBC Holdings Plc and Markit Economics monthly purchasing managers’ index for September is due to be released today. The gauge, a measure of India’s manufacturing output, stood at 52.6 in August. The Purchasing Managers’ index for services will be released on Oct. 5. A reading above 50 indicates expansion.

Indian stocks dropped, completing their worst quarter since 2008, as Coal India Ltd. slid after the cabinet approved a bill making companies mining coal and other minerals pay for development of areas where they operate.

Coal India

Coal India, the world’s biggest producer of the commodity, lost 5 percent to a six-month low. Coal miners must share 26 percent of their earnings while other miners must pay an amount equal to the royalty collected by the government for mineral extraction, according to the bill.

The BSE India Sensitive Index, or Sensex, retreated 1.3 percent in September. The measure has lost 13 percent of its value in the quarter ended Sept. 30, the most since the three months ended December 2008, on concern the Reserve Bank of India’s record monetary tightening will slow economic growth and erode company earnings.

India’s rupee completed the biggest quarterly drop since 2008 on concern investors will sell emerging-market assets as Europe’s policy makers struggle to stem the region’s debt crisis.

The currency dropped the most in a week on Sept. 29 as exchange data showed global funds pulled a total $5.6 billion this month from the stock markets of India, Indonesia, South Korea, Taiwan and Thailand.

India’s 10-year bond yield climbed to a two-month high after the government said on Sept. 29 it will borrow 32 percent more than planned in the second half of the financial year to make up for dwindling funds. The yield on the 7.8 percent securities due April 2021 rose 10 basis points, or 0.10 percentage point, to 8.44 percent.

The benchmark securities completed five quarters of losses after the finance ministry said it will sell 2.2 trillion rupees ($45 billion) of debt in the six months ending March 31, versus an earlier plan for 1.67 trillion rupees.

--Editors: John Chacko, Arijit Ghosh

To contact the reporter on this story: Tushar Dhara in New Delhi at tdhara1@bloomberg.net.

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net.


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