The markets have drifted to the lowest point in the session post the announcement of IIP numbers which came in at 6.3% as per new series. Mining growth was at 2.2% versus 9.2% (YoY), manufacturing growth stood at 6.9% versus 14.4% (YoY). The decline in IIP numbers was due to pressure of high inflation and rising interest rates. FM has expressed his concerns over the weak IIP numbers saying that the April IIP growth numbers are disturbing. Investors' sentiments took a hit after this statement. The global cues too remained weak with major Asian markets trading lower. The markets continue to trade on a negative note due to selling in select counters, mainly FMCG, oil and gas, auto, power and PSU; however IT, consumer durables and TECk are trying to balance the market movement with an uptick.
The BSE Sensex is currently trading at 18,297.75, down by 87.15 points or 0.47%. The index has touched a high and low of 18,399.02 and 18,271.53. There were 8 stocks advancing against 22 declines on the index.
The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap index were down by 0.19% and 0.09% respectively.
The only gaining sectoral indices on the BSE were, IT up by 0.29%, CD up by 0.06% and TECk up by 0.04%. While, Oil and Gas down by 0.78%, FMCG down by 0.64%, Auto down by 0.56%, Capital goods down by 0.53% and Bankex down by 0.50% were the top losers on the index.
The top gainers on the Sensex were TCS up by 0.74%, Hindalco up by 0.71%, Tata Power up by 0.42%, ONGC up by 0.30% and Infosys up by 0.26%.
On the flip side, Maruti Suzuki down by 1.72%, ITC down by 1.26%, RIL down by 1.24%, Hero Honda down by 1.21% and Cipla down by 1.03% were the top losers on the index.
Meanwhile, the high level committee chaired by Prime Minister Manmohan Singh on June 09, 2011 gave the in-principle approval to the draft National Manufacturing policy, with the objective to increase the share of manufacturing sector in GDP to 25% by 2025 from the present 16%. The policy envisages creation of National Investment and Manufacturing Zones (NIMZs) as mega industrial zones with world class infrastructure facilities. The NIMZs will enjoy tax concession, special policy regime, flexible labor policy, easy environment laws and related compliance. The new policy is also expected to generate 100 million jobs to harvest demographic dividend.
Prime Minster directed the Commerce and Industry Ministry to finish the discussion process with other ministries within a month, so that the final policy could be brought before cabinet for approval. The new manufacturing policy was drafted by Department of Industrial Planning and Promotion (DIPP) under the Ministry of Commerce and Industry in consultation with the National Manufacturing Competitiveness Council and the Planning Commission.
The statement released by Prime Minister's Office (PMO) said, 'The Prime Minister observed that the policy measures proposed would reduce the compliance burden on industry. At the same time, these measures have to be formulated while adequately taking care of the environmental and labour welfare concerns. This will send a positive message to the investing community.
Almost after two decades of reforms, the share of manufacturing sector is still around 16% with the employment share of 12%. The share in GDP of manufacturing sector is quite low in comparison to other Asian economies. The share manufacturing sector in GDP is around 32% in China, 35% in Thailand and 25% in South Korea.
The Indian government is planning to boost the share by this new manufacturing policy. However, there are few serious concerns which can create problems to achieve the goals set by the New Manufacturing Policy like, providing land for industrial propose, skill development and infrastructure development. Without viable solution on these issues, achieving the manufacturing targets will be difficult for the government.
The high level committee meeting was attended by Finance Minister Pranab Mukherjee, Commerce and Industry Minister Anand Sharma, Environment Minister Jairam Ramesh, Corporate Affairs Minister Murli Deora, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Chairman of PM's Economic Advisory Council C Rangarajan.
The S&P CNX Nifty is currently trading at 5,490.25, down by 30.80 points or 0.56%. The index has touched a high and low of 5,521.45 and 5,482.55 respectively. There were 12 stocks advancing against 38 declines on the index.
The top gainers of the Nifty were Ranbaxy up by 1.26%, Hindalco up by 0.74%, TCS up by 0.62%, Tata Power up by 0.48% and ITC up by 0.44%.
Sesa Goa down by 1.78%, SAIL down by 1.67%, Reliance Capital down by 1.65%, Maruti down by 1.56% and Reliance down by 1.25% were the major losers on the index.
Most of the Asian markets were down in the red; Shanghai Composite declined 0.97%, Hang Seng dropped 1.20%, Jakarta Composite edged lower by 0.15%, Straits Times trimmed 0.41%, Seoul Composite descended by 1.23% and Taiwan Weighted plunged 1.81%.
On the flip sides, KLSE Composite gained 0.42% and Nikkei 225 added 0.47%.
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