Indian Stock Market August 1st 2011

Indonesia stock info - Indian Stock Market August 1st 2011 ; Amid fears about a possible drop in earnings and slowdown in growth following a sharper-than-expected rate hike by the Reserve Bank of India, investors indulged in some heavy selling on the Indian bourses during the week ended 29 July 2011.

Worries about the U.S. economy following the country's lawmakers failing to take a decision on raising debt ceiling, and weak economic reports from parts of Europe too weighed on sentiment last week.

The mood was so bearish for a better part of the week that even a decline in food inflation and some fairly impressive report cards from India Inc failed to around any significant buying interest.

With the central bank hiking repo and reverse repo rates by 50 basis points each to 8% and 7% respectively, and revising inflation target to 7%, up from a previous estimate of 6%, the mood is likely remain cautious with a largely negative bias for a better part of the coming week as well.

According to the data released by the government last Thursday, India's food price index rose 7.33% and the fuel price index climbed 12.12% in the year to July 16. In the previous week, annual food and fuel inflation stood at 7.58% and 11.89% respectively. The primary articles price index was up 10.49%, compared with an annual rise of 11.13% a week earlier.

Automobile, cement and steel stocks will be in focus in the coming week as companies engaged in manufacturing these items will be reporting their monthly sales, shipment and production figures. However, fears of a fall in demand due to sharp hike in lending rates may prevent investors from going on any big buying spree in these stocks even if monthly reports turn out to be pretty good. Realty and capital goods stocks are also likely to feel pressure due to high borrowing costs.


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