October industrial output data misses estimates

India's industrial production grew by 10.3% in October as against flat growth in the same period last year, data released by the Government showed. The stock market and the rupee gave up some gains post the release of the IIP data, which turned out to be lower than consensus forecast of 11-13%. In a seasonally adjusted month-on-month terms, the industrial output fell 1% in October 2009 - the first drop in the past 12 months.

Still, the latest IIP report only goes to buttress the case for a hike in interest rates by the Reserve Bank of India (RBI) and reversal of some of the fiscal stimulus measures by the Government in the near year.

Meanwhile, the Government revised the September IIP growth figure, to 9.6% from 9.1%. India's industrial output expanded by 7.1% in the first seven months of the current fiscal year (April-October 2009-10) versus a growth of 4.3% in the corresponding period of the last financial year.

Growth in the Mining sector stood at 8.2% in October compared to 3.2% in the same month last year. Electricity output grew by 4.7% in the month under review as against 4.4% in the year-ago period. Manufacturing sector output rose by 11.1% versus a contraction of 0.6% in October 2008.

Basic Goods output expanded by 5% in October 2009 as against 3.2% in the same month a year earlier. Growth in Capital Goods output stood at 12.2% in the month under consideration versus 4.2% in October 2008. Intermediate Goods output grew by 14.3% compared to a drop of 4.4% a year ago.

Consumer Goods segment witnessed a growth of 11.8% versus a decline of 0.9% in October 2008. Growth in Consumer Durables stood at 21% as against a contraction of 1.6% last year. Output for Consumer Non-durables was up by 8.1% compared to a fall of 0.6% in October last year.