Rate cut fails to boost India consumer sentiment: Survey

Consumer sentiments in India dipped marginally in June, as the latest interest rate cut by RBI failed to boost confidence, but there is optimism about employment conditions over the next 12 months, a Deutsche Borse survey said.

The MNI India Consumer Sentiment Indicator eased marginally at 119.5 in June compared with 119.6 in May. "The June survey showed that consumer sentiment remains fragile with consumers increasingly wary of their finances and less inclined to make big-ticket purchases," the report said.

It added, the easing of policy rates so far this year has helped stabalise declining trend in confidence. However, the latest rate cut of 25 basis points on June 2, has not yet trickled down to consumers.

"The sequential easing could have some upward impact on consumer sentiment over the coming months," it said.

Meanwhile, the employment outlook indicator rose for the third consecutive month as more than 50 percent of respondents expected the job market to improve. "It is encouraging to see that consumer sentiment has stabilised following the decline throughout 2014. Lower rates from the RBI have helped in this respect, although have so far failed to provide a resounding boost," Chief Economist of MNI Indicators Philip Uglow said in a research note.

The report also said, sentiment towards real estate has strengthened since last year. But, high mortgage costs have kept house buying sentiment in check.