July IIP Data Expands By 2.6%

The Index of Industrial Production (IIP) for the month of July 2013 has expanded by 2.6% as against a contraction of 2.2% in June. The IIP for the duration April-July stood at -0.2%. The street was expecting to see a contraction of around 0.2%-0.4%.

One of the reasons for better expansion in numbers is due to the robust growth witnessed in manufacturing. The manufacturing sector expanded by 3% as against a contraction of 2.2% in June.

The output of another key sector, viz. infrastructure, rose 3.1% year-on-year in July. This stood at 0.01% in the previous month.

Other sectors like Capital Goods expanded by 15.6% in July 2013 as against a contraction of 6.6% witnessed during June 2013. Mining too witnessed some recovery. The contraction in mining came down from 4.1% in June 2013 to -2.3% in July 2013. Full details were yet to come out at the time of posting this article.

Another positive update is that the IIP data for June 2013 was revised downward to -1.8% as against -2.2%. This is certainly a positive development as far as the market sentiment is concerned. An early rally in Capital Goods stocks in tomorrow’s trade cannot be ruled out.