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Industrial production jumped sharply in the month of July 2013 underpinned by improvement in manufacturing
and electricity sector output. The manufacturing turn around is encouraging but we must note that one swallow
does not make a summer and we will need a confirmation of trend before we can conclusively infer a positive
undertone in the data.
Chandrajit Banerjee
(Director-General, CII)
INDICATORS
In this issue Market Global News Industry News Policy Developments
Index of Industrial Production (IIP) entered into the positive zone in July 2013, recording a growth of 2.6 per
cent on account of improved performance of manufacturing and power sectors. The cumulative IIP growth in the
first four months (April-July 2013) stands at 0.2 per cent. Meanwhile IIP for June 2013 was revised upwards to a
decline of 1.78 per cent from a provisional 2.2 per cent dip in production.
In August 2013, exports were valued at US$26.1 billion, up a robust 12.97 per cent as compared with same period
last year. This is the highest monthly increase this fiscal and augurs well for the future economic prospects..
Imports contracted by 0.68 per cent in August 2013, lower than a decline of 6.2 per cent in July 2013, mirroring
the subdued domestic demand in the economy. As exports rose and imports fell during the month, the trade deficit
narrowed to US$10.91 billion in August from a deficit of US$12.27 billion in July.
Foreign Exchange Reserves as on 30 August 2013 stood at US$275.5 billion, a steady drop from US$278.8
billion as on 16 August 2013.
The Call Money Rates as on between 26th Aug and 8th Sept 2013 traded in the range of 9.07-10.27 per cent.
FORTNIGHTLY NEWSLETTER 26 Aug– 8 Sept 2013
POLICY DEVELOPMENTS
BANKING INDICATORS
Rs. Billion
Indicators Outstanding as on
23 Aug 2013
% Variation over
Fortnight Year
Total Bank Credit 55,294.8 0.4 17.1
Food Credit 1,023.0 7.2 5.7
Non Food Credit 54,271.7 0.5 17.3
Aggregate Deposit 71,130.3 0.1 13.0
Broad Money (M3) 87,742.2 0.1 12.2
Credit Deposit Ratio 78.0
Source: RBI
On the basis of assessment of current market conditions, RBI has decided to open a forex swap window to
meet the entire daily dollar requirements of three public sector oil marketing companies (IOC, HPCL and
BPCL). Under the swap facility, Reserve Bank will undertake sell/buy USD‐INR forex swaps for fixed
tenor with the oil marketing companies through a designated bank. The swap facility gets operationalized
with immediate effect and will remain in place until further notice.
The RBI has been receiving requests from banks to consider a special concessional window for swapping
foreign currency non‐resident (banks) {FCNR (B)} deposits that will be mobilised as per the recent
relaxations permitted by the RBI. It has been decided accordingly to offer such a window to the banks to
swap the fresh FCNR (B) dollar funds, mobilised for a minimum tenor of three years and over at a fixed
rate of 3.5 per cent per annum for the tenor oft he deposit.
The Land Acquisition, Rehabilitation and Resettlement Bill, 2012 was passed by the Rajya Sabha on 4
September 2013.
Exchange Rate Movements
80.0
85.0
90.0
95.0
62.0
64.0
66.0
68.0
70.02
6-A
ug
28
-Au
g
30
-Au
g
01
-Se
p
03
-Se
p
05
-Se
p
USD EURO (RHS)-400
-398
-396
-394
-392
-390
-388
-386
26
-Au
g
27
-Au
g
28
-Au
g
29
-Au
g
30
-Au
g
31
-Au
g
01
-Se
p
02
-Se
p
03
-Se
p
04
-Se
p
05
-Se
p
EQUITY MARKETS
Global stock markets posted a relatively stable
performance on the back of pick-up in economic
growths in the major advanced economies.
Indian stock markets gained sharply on the back
of sharp positive movements across most of the sub
-sectors. This was attributable to the positive global
clues on the back of improved economic
performance posted by most of the advanced
economies in the second quarter.
Global Stock
Indices
Closing Value
as on 06 Sep-
tember, 2013
Fortnightly
Change (%)
NYSE: DJIA 14,922.5 -0.6
FTSE 100 6,547.3 0.9
Nikkei 225 13,860.8 1.5
Straits Times 3,048.3 -1.3
KOSPI 1,955.3 4.6
Source: Yahoo Finance
Indian Equity
Indices
Closing Value
as on 06 Sep-
tember, 2013
Fortnightly
Change (%)
BSE SENSEX 19,270.1 4.1
BSE 500 6,908.1 3.3
S&P CNX
NIFTY 5680.4 3.8
S&P CNX 500 4319.4 3.2
Source: NSE, BSE
Net Institutional Activity
Equity Debt
Fortnightly FII (US$ Million) -511.75 -299.7
Year -to-date FII (US$ Million) 11,718.3 -4,506.9
Source: SEBI
COMMODITY MARKETS
NYMEX West Texas Intermediate Crude
Oil on 06 September 2013 was trading at
US$108.9 per barrel.
New York spot price for Gold have
moderated sharply and was trading at
US$1,370.2 per ounce as on 06 September
2013.
Commodity Spot
Indices
Closing Value as
on 07 September
2013
Fortnightly
Change
(%)
MCX AGRI 2536.5 1.2
MCX METAL 5208.1 -0.8
MCX ENERGY 4913.6 5.7
MCX COMDEX 4417.3 2.2
Source: MCX, NCDEX
INDUSTRY NEWS
Agriculture
In the wake of the increased requirement of
food grains for implementation of the proposed
Food Security Act, procurement operations will
be further extended and more farmers will get the
benefits of minimum support prices (MSP)
operations. Food grain requirement for the
implementation of the bill is estimated 614.3
lakh tonnes as against the existing requirement of
563.7 lakh tonnes for Targeted Public
Distribution System.
Coal
The Government periodically reviews and
monitors the progress of development of coal
blocks as well as associated end use plants
through the mechanism of ‘Review Committee’
earlier and ‘Inter-Ministerial Group (IMG)’ now
which has been constituted on 21.06.2012 in
pursuance of the announcement made by the
Finance Minister in the budget speech for the
year 2012-13. In case of unsatisfactory progress
on the part of allocattees, appropriate action is
taken including de-allocation of the block. On
the basis of review made by the Review
Committee, 20 coal blocks were de-allocated
due to unsatisfactory progress and 5 coal blocks
surrendered by the allocatees were de-allocated.
BSE Indices
Closing Value
as on 23
August, 2013
Fortnightl
y Change
(%)
AUTO INDEX 10,416.32 1.6
BANKEX 11,333.44 5.0
BSE CAPITAL
GOODS 7,443.02 2.9
BSE CONSUMER
DURABLE 5,713.41 -0.5
BSE FMCG 6,490.67 3.1
BSE
HEALTHCARE 9,148.59 3.3
BSE MID CAP 5,451.01 1.7
BSE SMALL CAP 5,343.81 1.8
BSE TECK INDEX 4,413.69 3.9
METAL INDEX 8,148.09 4.2
OIL & GAS INDEX 8,572.54 4.7
Source: BSE
CNX Segment
Indices
Closing Value as
on 23 August,
2013
Fortnightl
y Change
(%)
CNX NIFTY
Junior 10,776.8 1.5
CNX MIDCAP 6,767.55 1.9
BANK NIFTY 9,961.4 5.2
CNX IT 8,216.5 4.1
CNX Realty 155.2 -0.2
CNX
Infrastructure 2,037.15 3.1
Source: NSE
GLOBAL NEWS
US
Non-farm payrolls (NFP) increased by 169K in
August 2013, lower than market expectations of
an increase of 180K. Meanwhile, total job
addition for July was revised lower from 162K
to 104KK, while that for June was revised from
188K to 172K. With the latest print and the
revisions, the monthly average for 2013 stood at
180K compared to 178K/ month average in the
corresponding period last year.
Euro Zone
Real GDP in Euro zone (EZ) posted a growth of
0.3 per cent on q-o-q basis in Q2 2013, marking
its first expansion since Q3 2011. In y-o-y terms
though, GDP contracted 0.5 per cent, slower
than a contraction of 1.0 per cent in Q1 2013.The
major contributors to EZ's Q2 GDP q-o-q growth
were private consumption expenditure (PCE),
government consumption and exports, while
inventories and imports contributed negatively to
GDP growth.
As expected, the European Central Bank (ECB)
decided to keep the key policy rate unchanged at
0.50 per cent, in its meeting held on September
5, broadly in line with market expectation.
Accordingly, the ECB left the interest rate on its
deposit facility and marginal lending facility
unchanged at 0.0 per cent and 1.0 per cent
respectively. Besides, the ECB President re-
assured the market that the monetary policy will
remain accommodative for as long as necessary.
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