Views on IIP and CPI data - Angel Broking

Views of Ms. Bhupali Gursale ( Economist - Angel Broking) on IIP and CPI data:

"During February 2014, the sequential easing of food inflation by about 125bp has aided in moderation in headline consumer inflation to 8.1% from 8.8% in January 2014. Core inflation has also positively decelerated to 7.9% from 8.1% in the previous month supported by a base effect. At the same, industrial activity as measured by the IIP reported an almost flat performance in January 2014 as against the 0.2% decline in production during December 2013. Healthy 6.5% growth in electricity production has supported the overall IIP performance even as the manufacturing sector continued to contract for the fourth straight month. Excluding the performance of electricity sector the IIP would have reported de-growth of 0.5% during the month. Nevertheless, despite the moderation in CPI inflation and lack-luster IIP data we expect the RBI to maintain status quo on monetary policy rates in its upcoming April policy review and until there is a sustained downtrend in headline CPI inflation below the 8.0%-level."

Source : Equity Bulls

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