Bloomberg News

Industrial Output, Inflation, Infosys Earnings: India Week Ahead

October 10, 2011

Oct. 10 (Bloomberg) -- India will report this week industrial production for August and inflation for September, data that may help the central bank determine whether to raise interest rates further this month.

Output at factories, utilities and mines rose 3.3 percent in July from a year earlier, the slowest pace in almost two years. The Central Statistical Organisation is due to release the latest numbers on Oct. 12. The commerce ministry is scheduled to announce the wholesale-price index on Oct. 14 after saying the benchmark gauge of inflation rose to a 13-month high of 9.78 percent in August.

The Reserve Bank of India has raised its repurchase rate 12 times starting March, 2010, to temper price increases in a nation where the World Bank says more than 75 percent of the population lives on less than $2 a day. The central board of the bank will meet in Jaipur, Rajasthan, on Oct. 13 to discuss the state of the economy, and Governor Duvvuri Subbarao will decide on borrowing costs at a separate meeting on Oct. 25 in Mumbai.

Price increases beyond a 6 percent threshold aren’t “acceptable,” Subbarao said last month.

Infosys Ltd., India’s second-largest software exporter, will report on Oct. 12 earnings for the three months ended Sept. 30. The Bangalore-based company, in July, said net income in the quarter to June 30 rose 16 percent from a year earlier, and forecast annual sales of as much as $7.3 billion, missing analysts’ forecast.

Stocks, Currency

Indian stocks retreated last week after a report by HSBC Holdings Plc and Markit Economics showed the nation’s manufacturing expanded in September at the slowest pace since March, 2009, and as Moody’s Investors Service cut its rating on State Bank of India’s financial strength.

The BSE India Sensitive Index shed 1.3 percent to 16,232.54. State Bank, the nation’s largest lender, tumbled 8.3 percent to be the biggest decliner on the 30-stock gauge. Jindal Steel & Power Ltd. plunged 4.5 percent.

The rupee fell 0.4 percent last week, extending losses after completing its worst quarter in almost a decade. It traded at 49.16 a dollar on Oct. 7 in Mumbai.

Benchmark 10-year bonds fell for a second week, driving yields higher, on speculation investors will cut holdings after the government said it will borrow more than planned earlier. The yield on the 7.8 percent bonds due April 2021 jumped 13 basis points last week, or 0.13 percentage point, to 8.58 percent, a three-year high for a 10-year security, according to the central bank’s trading system.

--Editors: Sam Nagarajan, Indranil Ghosh

To contact the reporter on this story: Anoop Agrawal in Mumbai at aagrawal8@bloomberg.net

To contact the editor responsible for this story: Hari Govind at hgovind@bloomberg.net


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