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Markets will remain closed on May 13, 2021 on account of Id-Ul-Fitr (Ramzan Id).

Is 8% GDP growth elusive to India?
Wed, 29 Feb Pre-Open

In order to curb the inflation monster Reserve Bank Of India (RBI) adopted a hawkish monetary policy since the last two years. Tight monetary policy hurt the industrial capex cycle of corporates which in turn impacted the overall economic output. Rate sensitive's like construction, engineering and auto were so badly affected by rising interest rates that the growth figure of 8% seemed elusive. In fact, if the poll of 26 economists materializes (growth expectation of 6.4% in quarter ending December 2011) than this would be the fourth straight quarter below 8%. Thus, interest rates have been effectively labeled as the main culprit for slowdown in overall growth.

However, apart from interest rates confidence crisis resulting from policy bottlenecks is also hurting growth equally. Although there are indications that the rate cycle has peaked out the kind of macro-headwinds India is facing it would take a while before we scale/surpass historical growth figures.

Exports are under significant pressure due to the ongoing trouble in the developed markets. Government expenditure (important component of GDP growth) too is likely to be curtailed as revenues (tax receipts) are dwindling due to the impending slowdown. Although borrowing is an available option to the fund the required expenditure it may crowd out private investments. So, government needs to be careful in that regards. Another factor impacting growth is investment which as mentioned previously is suffering due to the rising rates. However, consumption (typically the largest component) continues to remain the key growth driver.

Nonetheless, right now the other factors (exports, government spending and investments) are weighing down the consumption component. This in turn has impacted the GDP growth figures. We believe that policy issues and interest rates will play a key role if India aims to surpass the 8% figure and achieve double digit growth in future. And for that RBI and Government will have to work in conjunction. RBI will have to balance growth and inflation aspirations prudently. On the other hand government will have to take steps in ironing out bureaucratic bottlenecks thereby creating a healthy investment climate.

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Stock Market Updates

Sensex Trades Over 300 Points Lower, Dow Futures Down by 128 Points (Today's Market)

May 12, 2021 12:30 pm

BSE Sensex is trading down by 328 points, while the NSE Nifty is trading down by 89 points.

GODREJ AGROVET Share Price Up by 9%; BSE FMCG Index Down 0.1% (Today's Market)

May 12, 2021 12:14 PM

GODREJ AGROVET share price is trading up by 9% and its current market price is Rs 577. The BSE FMCG is down by 0.1%. The top gainers in the BSE FMCG Index are GODREJ AGROVET (up 8.5%) and GSK CONSUMER (up 5.1%). The top losers are GILLETTE INDIA (down 0.2%) and ITC (down 0.2%).

Sensex Dips 300 Points, Nifty Falls Below 14,800; Godrej Consumer Zooms 10% (Today's Market)

May 12, 2021 09:30 am

Indian share markets open lower. The BSE Sensex opened down by 325 points, while the Nifty is trading lower by 84 points.

SIEMENS at All Time High; BSE CAPITAL GOODS Index Up 0.7% (Today's Market)

May 12, 2021 09:36 AM

SIEMENS share price has hit an all time high at Rs 2,096 (up 7.5%). The BSE CAPITAL GOODS Index is up by 0.7%. Among the top gainers in the BSE CAPITAL GOODS Index today are SIEMENS (up 7.5%) and HONEYWELL AUTOMATION (up 0.1%). The top losers include CARBORUNDUM UNIVERSAL (down 0.1%) and SCHAEFFLER INDIA (down 0.4%).

CADILA HEALTHCARE at All Time High; BSE HEALTHCARE Index Down 0.1% (Today's Market)

May 12, 2021 09:36 AM

CADILA HEALTHCARE share price has hit an all time high at Rs 640 (up 1.1%). The BSE HEALTHCARE Index is down by 0.1%. Among the top gainers in the BSE HEALTHCARE Index today are CADILA HEALTHCARE (up 1.1%) and ABBOTT INDIA . The top losers include TORRENT PHARMA (down 0.1%) and SANOFI INDIA (down 0.1%).

BLISS GVS PHARMA Share Price Down by 6%; BSE HEALTHCARE Index Down 0.1% (Today's Market)

May 12, 2021 09:34 AM

BLISS GVS PHARMA share price is trading down by 6% and its current market price is Rs 124. The BSE HEALTHCARE is down by 0.1%. The top gainers in the BSE HEALTHCARE Index are SUN PHARMA ADV. RES. (up 2.0%) and AJANTA PHARMA (up 1.9%). The top losers are BLISS GVS PHARMA (down 5.6%) and DISHMAN CARBOGEN AMCIS (down 7.8%).

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