June IIP at -1.3% may not move mkt significantly: CNBC-TV18

Index of industrial production (IIP) data for the month of June is expected today. Also, there are a lot of measures on the rupee from the Finance Ministry that are expected. CNBC-TV18’s Latha Venkatesh gives out the expectations.

One would expect that the rupee will hold up today for one thing, the US dollar is not showing too much strength globally. So, at least we do not have too much to tackle on the global front.
Domestically, rupee will be one plus and one minus for the rupee. The fact that something is going to be announced by the government will keep people from shorting the rupee too much. Also, the fact that the Reserve Bank of India (RBI) has decided to squeeze out even more liquidity is also a sense of purpose from the RBI and therefore, the rupee definitely starts on the front foot. But we will have to watch out for how the foreign institutional investors (FIIs) equity funds react since this is definitely going to mean higher base rates by all banks and will impact gross domestic product (GDP). Today, the rupee starts on a higher note moving closer to 60/USD for sure.
CNBC-TV18’s poll threw up -1.3 (minus 1.3) percent for the IIP data which is hardly a pleasant number. In fact, that makes the entire April-May-June quarter to almost zero or -0.3 (minus 0.3) percent if one goes by the fact that there was a negative even in April.
The other negative that the markets will watch out for is electricity. It was the only thing holding up and even that is expected to come in negative. Manufacturing anyway was not doing too well.
The core sector numbers that accounts for about 38 percent of IIP has already shown a very weak number at 1 percent. Therefore, there is not much expectation by way of IIP but it isn’t usually very market moving. One, it comes at 5.30pm and so, the markets are done and dusted and by the next day the markets analyse these numbers to the hilt.
Also, IIP lately has not had too much of an impact. Growth anyway is doing badly. We do not need the IIP’s evidence, we have seen auto sales, we have seen core data, we have seen corporate earnings and therefore, it is kind of absorbed by the market. It may not be market moving but it will be confirmation of the terrible growth slowdown in the country.