Poll: Nov industrial output growth seen at 6.6%

India's industrial output growth probably slowed to 6.6% in November from a year earlier, a median forecast in a Reuters poll showed, as price rises began to bite in Asia's third-largest economy, which is growing at almost 9%.

The forecasts, of 28 economists polled, ranged from a growth of 4.1% to as much as 10%. Official figures had showed annual industrial output growth in October rose a faster-than-expected 10.8% from 4.4% in the previous month. The Indian economy has expanded at an annual rate of more than 8% in the last three quarters, riding on strong manufacturing that contributes around 80% of the industrial output. Factors to watch  * The HSBC Markit Purchasing Managers' Index , an indicator of manufacturing expansion, slipped to 56.7 in December from 58.4 in the previous month. * Last November's reading was its strongest since May 2010, and the December reading marks the 21st straight month it has been above 50. Any reading above 50 signifies growth. * The manufacturing sector saw slower growth in December with factory output and new orders dawdling, the PMI survey showed. * India's food inflation rose to its highest in over a year at 18.3% in the year to December 25, putting the government's ability to control price rises through monetary policy in doubt. * Annual headline inflation rose 7.48% in November and officials expect it to accelerate to around 8 percent in December. Inflation data is due on January 14. * The Reserve Bank of India is expected to raise its key rates by 25 basis points when it meets on January 25, in its efforts to squeeze inflation back to its projected level of 5.5% by end-March. * The central bank has raised its key rates six times last year and analysts in a Reuters poll forecast rates to rise by another 75 basis points in 2011. Market impact * Bond and overnight indexed swaps (OIS) markets have factored in industrial production growth at around 6% to 7%. * If the output growth shoots past that level or shows a double-digit growth, the benchmark 10 year 7.8%, 2020 bond yield could rise to as much as 8.3%, traders said. Swap rates too are expected to rise by around 4-6 basis points (bps) across tenors. * Traders say a weaker-than-expected data will likely ease bond yields and swaps by 3-4 bps. * Dealers said they would also watch November inflation data to take an overall view on central bank monetary policy stance.