Economic Indicators (as on August 30, 2022)

Inflation in India (%)

Consumer Price Index is at a 5-month low as it reduced to 6.71% in Jul’22, from 7.01% in Jun’22 due to mderation in food prices. Also, the low base of last year, when the data was computed with a low response rate contributed to this level of inflation. The current level of inflation continues to remain above 7% mark for the third consecutive month and marking completion of the second quarter. Wholesale Price Index (WPI) decreased to 15.18% in Jun'22 from 15.88% in May'22 as crude prices reduced. The current level of inflation continues to rise above RBI’s limit of 4%-6% in response to rise in prices of mineral oil, natural gas, basic metals, chemicals and chemical products, food articles etc.

Index of Industrial Production (%)

Index of Industrial Production (IIP) fell to 12.3% in Jun’22 from a twelve months high of 19.6% in May'22 powered mainly by higher electricity and manufacturing output.Improving IIP is quite indicative of the ongoing economic recovery. The electricity sector, manufacturing and mining sector rose by 16.4%, 12.5% and 7.5% respectively in Jun'22.

Indian Business Indicators - Purchasing Managers' Index (PMI)

S&P Global India Manufacturing Purchasing Managers' Index (PMI) saw a slight downfall to 56.2 in Aug’22 from 56.4 in Jul’22. International demand witnessed a robust hike and domestic demand also followed the trajectory. PMI Services increased to 57.2 in Aug’22 from 55.5 in Jul'22 amid a faster rise in both output and new orders, while employment rose to the fastest pace in over 14 years. The reading remains in the expansion zone as a print above 50 means expansion while a score below 50 denotes contraction.

USD INR & Brent Crude Movement

Brent crude oil stood at ~US$ 96.49 due to the demand supply disruption across the world on concerns over slowdown in global growth, rising inflation and worries of more interest rate hikes by the central banks in the coming months led to fears of a recession which hit the demand outlook of the commodity. The Rupee closed the month on 79.46 against Greenback as on Aug'22.


Equity Markets - India & US

Bellwether indices, Nifty 50 and S&P BSE Sensex gained 3.50% and 3.42% respectively owing to fall in global crude oil prices and a rebound in foreign fund inflows in the domestic equity market. Upbeat domestic corporate earning numbers for the quarter ended Jun’22 also contributed to the upside. Goods and Services Tax (GST) collection stood at ₹1.44 lakh crore in Aug’22, which is 28% more than the corresponding period of last year. Foreign Institutional Investors (FIIs) were net buyers in Indian equities to the tune of Rs.51204.34 crore this month. Dow Jones reduced drastically by 4.06% from previous month.

Interest Rate Movement (%) - India & US

Yield on the 10-Year benchmark paper marginally declined, closing at 7.33% on 29th Jul'22 vs 7.45% on 30th Jun'22 following decline in the U.S. Treasury yields which eased concerns over foreign fund outflow from the domestic debt market. Appreciation of the rupee against the greenback also led to the fall in bond yields. U.S. Fed raised interest rates by 75 bps which was as per market expectations. The U.S. Fed chief indicated that it may slowdown the pace of rate hikes in the future meetings which also aided market sentiment. 10-year U.S. Treasury bond closed lower at 2.65% on Jul'22 vs 3.01% on Jun'22.

India GDP Growth Rate

India’s Real GDP grows at a record pace to 13.5% for Q1 FY23 vs 4.09% for Q4 FY22, the fastest in the last four quarters -- on account of better performance by the agriculture and services sectors. However, economists expect the pace of India's economic growth to sharply slow in the next few quarters as higher interest rates hit economic activity.

Note : The data/statistics are given to explain general market trends, it should not be construed as any research report/research recommendation. The sector(s) mentioned are for the purpose of understanding only and the Fund may or may not have any future position in these sector(s).

Source: Bloomberg