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Journalism of Courage
The RBI8217;s rate rate cut and the government8217;s stimulus package may or may not succeed in pulling the economy out of the doldrums. But it did have a positive impact on the stock markets last week. By the end of last week, the benchmark index, the Sensex, had surged nearly 724 points and registered a growth of about 8 per cent over the previous week8217;s close. Whether this rally will sustain next week remains to be seen, but the measures did manage to lift the mood temporarily.
The index of industrial production IIP data released last Fridy showed negative growth in October. Industrial output shrank by 0.4 per cent in October. This was the first time in 15 years that this index has shown negative growth, and will surely stoke fears of a slowdown in the economy.
However, inflation continued to decline for the fifth consecutive week for the month of November and stood at 8 per cent for the week ended November 29. It stood at 8.4 per cent the week before. Crude oil prices, currently trading at 43.8 per barrel, surged almost 15.4 per cent during the week.
The major gainers this week were realty and metals sector, which registered robust growth of nearly 26 per cent and 13.5 per cent respectively compared to the previous week. The realty sector gained because of the government8217;s announcement that loans below Rs 20 lakh would be treated as priority sector loans.
The major losers this week were information technology and healthcare, which declined by nearly 2.8 per cent and 0.5 per cent respectively. Sentiment regarding the IT sector, whose clients include the three Detroit carmakers, took a hit because of the failure of the bailout package to receive Senate approval.
