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Sunday, October 12, 2008

Indian Economy Is In Trouble

India's industry, Infrastructure growth nosedives

Amidst crisis in the global financial markets, India on Friday reported a sharp drop in industrial growth to 1.3 per cent in August from a high of 10.9 a year-ago.

The manufacturing sector put out a dismal performance growing by a mere 1.1 per cent as against 10.7 per cent in the same period a year ago.

The growth in key infrastructure industries too dipped to 2.3 per cent in August 2008, compared with 9.5 per cent in the same period last year.

The cement sector declined to 1.9 per cent against 16.7 per cent in August 2007, while coal output dropped to 5.9 per cent compared with 8 per cent in the corresponding year.

Finished (carbon) steel growth also declined to 4.4 per cent in August, from 9.6 per cent in the same month last year.

For the April-August period of 2008-09, crude oil production registered a negative growth of 0.9 per cent, against one per cent during the same period last year, while petroleum refinery products dropped to 4.8 per cent from a healthy 10.4 per cent in the same period last year.


Weakening currency

The weak currency ended Oct. 8 at 48 rupees to the dollar, its lowest level in 5½ years. The rupee has taken a 21% dive since January.


The currency reached a record low of 49.26 per dollar in intraday trading on Fridaqy (10-10-2008).


Stock market is in nerve

On Friday, Except Ranbaxy Laboratories and State Bank of India, all the other 28 stocks in the Sensex basket ended lower. Among the major losers, Reliance Communications crashed 21.02% at Rs237.40, ICICI Bank plunged 19.71% at Rs364.10, Reliance Infrastructure slumped 19.26% at Rs515.30 and JP Associates crumbled 16.27% at Rs76.15. Tata Steel plummeted 14.99% at Rs287.50, Hindalco Industries dropped 11.18% at Rs80.65, HDFC shed 8.98% at Rs1719.20, DLF tanked 8.79% at Rs281.65, BHEL declined 8.28% at Rs1,345.85 and Larsen & Toubro lost 8.02% at Rs889.15. Other heavyweights also came under sustained selling pressure and lost around 5-7% each.

Realty stocks were battered the worst. Orbit Corporation tanked nearly 19.45% at Rs87.50, IndiaBulls Real Estate plummeted 19.45% at Rs95.45, Mahindra Lifespace Developers slumped 17.49% at Rs211.55, Peninsula Land dropped 16.05% at Rs28.25, Anant Raj Industries lost 15.07% at Rs80 and Unitech slipped by 12.38% at Rs82.80. Akruti City, Omaxe, Parsvnath Developers and Phoenix Mills declined over 1-8% each.


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