IIP data suggests stabilisation: Goldman

8220;We think the April reading was an aberration in the industrial production series8230; the smoothed index reading of the IP suggests that after a rapid increase in 4Q2009,the IP index has stabilized,8221; economists Pranjul Bhandari and Tushar Poddar wrote in the note.

The IP data series is a very volatile one and should be seen alongside other indicators such as manufacturing PMI,motor vehicle sales as well as its own history,they added.

Motor vehicle sales growth in June came in at 33.3 percent year-on-year,higher than 32.2 percent in May.

The Manufacturing PMI Index in June came in at 57.3,lower than 59.0 in May,but still showing an expansion while the services PMI showed a continued acceleration in activity,coming in at a strong 64.0 in June compared to 58.2 in May.

Industrial production for May looks particularly weak in comparison to the April reading of 16.5 percent year-on-year growth but less weak compared to the March reading of 13.9 percent,the economists said in the note.

Goldman Sachs expects inflation to come in at 11 percent in June and industrial growth to average to about 9 percent in the current financial year and maintains its forecast for a cumulative 300 basis points hike in 2010,with the next rate hike of 25 basis points in the July 27 policy review.