05-07-2012, 04:29 PM
India’s 3QFY2012 GDP Update
1India’s 3QFY2012 GDP Update.pdf (Size: 160.08 KB / Downloads: 29)
India’s Q3 FY12 GDP records lowest growth in two years
Central Statistical Organisation (CSO) has released the quarterly GDP numbers for Q3 FY12 both at
constant (2004‐05) and current prices.
India’s Q3 FY12 GDP registered a growth of 6.1%, weakest in almost 2 years and marginally down
from previous quarter’s figure of 6.9%. The number also indicates seventh successive slowdown in
quarterly GDP numbers. It is also lower than the market expectations of 6.4% (according to the
median forecast of Reuter’s poll) and 6.9% according to the advance estimates released by the
Central Statistics Office, earlier this month. The consecutive fall can be attributed to moderation in
the manufacturing sector due to higher input prices and sharp rise in borrowing costs following
tighter monetary cycle of RBI.
Agriculture sector continued with the declining trend and plunged to 2.7% in 3QFY12 as
against 11% growth reported in same period last year. According to the second advance
estimates of production of crops by the Department of Agriculture and Cooperation (DAC),
the production of coarse cereals and pulses during the Kharif season of 2011‐12 is estimated
to have declined by 4.6% and 10.3% respectively and among the commercial crops, the
production of oilseeds is estimated to have declined by 5.1%. These have negatively
impacted the production of agricultural sector.
Mining and quarrying sector remained in the negative terrain at 3.1% as against (2.9%)
reported in previous quarter. According to the latest IIP figure for the month of November,
mining contracted to 4.4% as against contraction of 6.06% reported in the earlier month.
Different policy measures and prevailing uncertainties in the economy impacted the sector
heavily.
Manufacturing sector grew marginally at 0.4% in December quarter as against 7.8% a year
ago and 2.7% in the previous quarter. Following weak demand at home and overseas,
coupled with tighter monetary cycle of RBI, dampened the growth trajectory of the sector
and it has plunged drastically. IIP went to the negative terrain (‐5.6%) during the month of
October.
Construction and Community, social & personal services are the only sectors which moved
up and posted 7.2% and 7.9% growth as against 4.3% and 6.6% growth recorded in the
previous quarter.
Market Impact:
Market momentum was strong in the early trading session. Nifty and Sensex started the day at
5,424.95 and 17,919.93 points respectively, however it went to negative terrain during mid day
trading session. The main 30‐share BSE index, which rose as much as 1.5% earlier in the day,
closed up 21.56 points at 17,752.68, with 17 of its components rising The yield on India's
benchmark 10‐year government bond moved down by 2 basis point to 8.19% after the GDP data
and closed at 8.20%.
Barring CG (‐1.59%), FMCG (‐0.72%) and BANKEX (‐0.59%) all the sect oral indices were trading in
green. Oil & gas (2.53%) and PSU (1.51%) were the major gainers followed by government’s
decision to auction ONGC share. Metal & Reality were other big gainers for the day.