MEXICO CITY: India’s economy should expand by 5.5 percent to 6.0 percent this year and growth should then return to 7 percent next year, Finance Minister P. Chidambaram told Reuters and said inflation was at an “unacceptable level.”
“I’m looking forward to this year ending with 5.5-6 percent growth, barring any unexpected shocks and next year getting back to 7 percent growth, and in 2014-15 getting back to 8 percent growth,” he said in an interview during a visit to Mexico for a G20 meeting.
The International Monetary Fund last month slashed its economic growth forecast for India for 2012 to 4.9 percent from 6.1 percent previously.
The minister’s remarks came as India’s main indexes edged up enough to mark a fourth consecutive gaining session as defensive stocks such as ITC and drug makers rose amids global risk aversion ahead of US elections and a key parliamentary vote in Greece.
The risk aversion sent the Indian rupee to a 1-1/2 month low against the dollar, and analysts said global cues would be critical for domestic markets in the days ahead.
Quarterly earnings results, including from blue chips Bharti Airtel, Tata Motors and State Bank of India, due this week will also be key.
“Domestic markets will be range-bound in coming weeks, will take cues from US presidential elections,” said Daljeet Singh Kohli, head of research at India Nivesh Securities.
India’s BSE index rose 0.04 percent, or 7.42 points, to end at 18,762.87 points, bringing its gains to 1.8 percent over the past four sessions.
The 50-share NSE index rose 0.11 percent, or 6.50 points, to 5,704.20, closing above the psychologically important 5,700 level for the first time since Oct. 25, and has gained 1.9 percent over the previous four sessions.
Defensive stocks gained, with some consumer good companies favored since they are seen as offering steadier returns and potential for growth.
Cigarette maker ITC rose 1.9 percent, while Colgate Palmolive India rose 2.5 percent.
Drug makers also advanced, especially following good quarterly results announced recently.
Dr. Reddy’s Laboratories rose 1.3 percent, advancing for a sixth consecutive session. India’s no. 2 drugmaker posted on Tuesday a better-than-expected 32 percent
rise in quarterly net profit.
Cipla rose 0.9 percent ahead of its quarterly earnings later in the day.
ACC rose 2 percent after October cement shipments rose by 3.5 percent to 2.04 million tons, a sturdier performance than expected.
Ambuja Cements gained 1.3 percent.
However, Bajaj Auto dropped 2.1 percent on profit-taking after hitting all-time high on Friday, when the company had announced record domestic motorcycle sales for October.
Shares in Crompton Greaves Ltd. dropped 8.4 percent after the power equipment makers said on Friday net profit dropped 64 percent in the July-September quarter.
Citigroup downgraded Crompton Greaves to ‘neutral’ from ‘buy’ saying earnings were lower than expected due to losses and lower margins in its consumer business.
Public sector banks with disappointing July-September quarterly earnings fell.
Vijaya Bank shares fell 2.9 percent after reporting a 40 percent fall in September quarter net profit, while Allahabad Bank shares fell 2.3 percent after reporting a 52 percent fall in July-September net profit.
Jubilant Foodworks fell 2.2 percent after Morgan Stanley downgraded the stock to “equal-weight” from overweight,” citing a recent out-performance in the shares and an absence of near-term catalysts.
