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Sensex, Nifty weak; Tata Steel up 3% on high production


The News International Team

12:30pm Economic Growth: The Indian economy is expected to grow at an average annual rate of 7.1 percent through 2019, but reform measures announced by the government are “no more than incremental improvements”, the Economist Intelligence Unit (EIU) has said.

EIU, which is the research-arm of the London-based publication, The Economist, credited strengthening of the economy to lower oil prices, saying this has eased structural problems associated with high inflation.

“In its first full Budget the government pledged more money for much-needed roads and railways and cut some red tape for entrepreneurs.

It relaxed slightly some fiscal deficit targets and increased spending on welfare. All of these moves are positive, but are no more than incremental improvements. Owing to a new government methodology for calculating GDP, we now expect growth of 7.1 percent a year in 2015-19, a full percent age point higher than earlier,” the EIU global forecast report said.

The country recently switched to a newer system of GDP growth computation, which made it the fastest growing major economy in the world. Analysts still take the numbers with caution owing to absence of comparable back data.

12:00pm Market Check

The Sensex is down 95.98 points at 28570.06 and the Nifty is down 54.15 points at 8652.55. About 1190 shares have advanced, 1231 shares declined, and 164 shares are unchanged.

Tata Steel is up over 3 percent on sales volume and key production data. It has registered its best ever performance in FY15 in hot metal, crude steel, and saleable steel production. Sesa Sterlite. Hindalco, NTPC and BHEL are top gainers while TCS, Sun Pharma, Wipro, Bharti Airtel and GAIL are among laggards in the Sensex.

Meanwhile, global rating agency Standard and Poor’s today said a policy logjam and “red tape” have hindered investments in India.

The rating agency, which conducted a “big data” study of three major emerging Asia economies “from the ground up”, said that India has a different scenario where corporate earnings have plateaued but debt has continued to rise and investments have slumped. “We believe policy gridlock and administrative red tape have hindered investment.

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