Today, Investors are waiting for confirmation that India's gross domestic product (GDP) slowed in the financial year that just ended when the data is released at 1.30pm local time.
According to a Reuters poll of economists, full year 2010-2011 GDP will slow just a touch to 8.5 percent over the previous year, down from 8.6 percent in 2009-2010, while GDP in the January to March quarter is expected to grow 8.2 percent.
But at least one analyst is expecting the data to disappoint. Rahul Chadha, Head of India Equities at Mirae Asset Global Investments expects GDP to grow 8 percent over the previous year, with manufacturing and agriculture growing just 5 to 6 percent.
Chadha says markets have already priced in such a slowdown. But he says the real concern now is whether growth will continue to slow next quarter because of tight liquidity and worsening consumer sentiment.
India's benchmark Sensex Index has dropped from 20,500 in January this year to 18,200 currently, a decline of 11 percent.
Chadha expects growth to slow to between 7 and 7.5 percent this year as rate hikes by the Reseve Bank of India (RBI) begin to bite. In all, India's RBI has hiked interest rates nine times since March 2010 to fight persistent inflation.
Chadha is bullish though on India's information technology (IT), pharma and consumer staples sectors, which he believes will continue to do well.
"Financials would get impacted because we have seen some instances of high deliquencies for public sector banks and pension liabilities," Chadha told CNBC in an interview on Tuesday.
( Source: CNBC )
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