Thoughts for a Day

TATAMOTORS ADR up 6.77%……..

Updated : 08.10pm / 11th Aug’14

11th Aug’14 FII’s & DII’s Activity

Updated : 06.30pm / 11th Aug’14

June IIP seen rising for third month, inflation still high

Industrial production in India probably expanded for a third consecutive month in June driven mainly by solid growth in infrastructure output, a Reuters poll showed.

Factory output in June likely rose 5.4 percent from a year earlier, faster than the 4.7 percent growth in May, according to a poll of 27 economists. “India’s core sector growth touched 7.3 percent year on year in June supported by a significant pick-up in electricity, cement and coal production”, said Rupa Rege Nitsure, chief economist at Bank of Baroda.

The infrastructure sector accounts for almost 40 percent of India’s industrial output. If confirmed, this would be the strongest expansion in industrial production in 19 months, welcome news for the newly-elected government led by Prime Minister Narendra Modi. Economists in the poll also predicted that July inflation would be almost unchanged from a month earlier even as weak monsoon rains and political turmoil in Iraq were expected to push food and fuel prices up significantly.

Wholesale price inflation likely eased to 5.10 percent from 5.43 percent the month before, while consumer price inflation, the key indicator adopted by the Reserve Bank of India to measure price rises since April, probably gathered pace to 7.40 percent from 7.31 percent in June.

The mixed inflation data will plausibly see the RBI maintaining status quo on rates for longer. Governor Raghuram Rajan last week kept policy rates unchanged saying “upside risks to the target of ensuring CPI inflation at or below 8 percent by January 2015 remain” and underlined his resolve to lower inflation to 6 percent by 2016. “Food inflation will go up quite materially due to scant rains,” said Ashutosh Datar, economist at IIFL Institutional Equities.

Jindal family close to buying Italy’s Lucchini: Italy PM

A company run by India’s billionaire Jindal family is close to finalising a deal to buy insolvent Italian steelmaker Lucchini, Italy’s prime minister Matteo Renzi said on Sunday.

Lucchini, formerly owned by Russia’s Severstal, was declared insolvent in 2012 and placed under special administration after falling victim to plunging European demand for steel during the 2008 recession. “Jindal should finalise. It’s a matter of days,” Renzi said after being asked about Piombino, Lucchini’s main production site, during a visit to a Catholic scout group in Tuscany.

Renzi did not specify whether he was referring to Jindal Steel and Power or JSW Steel, respectively owned by brothers Naveen and Sajjan Jindal. In April sources with direct knowledge of the matter said  Jindal Steel and Power and  JSW Steel were in competing talks to buy parts of Lucchini.

Italian media have said Lucchini could be sold for a symbolic one euro. Indian newspaper Mint said in July JSW Steel had offered to buy parts of Lucchini. A source close to JSW said on Sunday that talks were progressing quickly. “Work is going on in full swing,” the source said after Renzi’s comment. “(I) can’t say if it’s a matter of days but surely things are moving fast.” JSW joint managing director Seshagiri Rao did not immediately respond to a request for comment.

A spokeswoman for Jindal Steel and Power had no comment to make. Spokesmen for Renzi and Italian industry minister Federica Guidi were unable to say which company the prime minister was talking about or give more information. Italian labour union FIOM-CGIL said last month that the world’s biggest steelmaker Arcelor Mittal was considering making a bid for Lucchini.