Record GDP growth supports market sentiment

02 June 2007

In arrangement with Thomas White Global Research

Highlights:

• Indian indices gain, but lag other emerging markets for the week
  
• Indian economy expands 9.4 per cent for fiscal year ended March 2007, second highest annual growth.
  
• Strong growth in manufacturing and services. Poor farm sector performance.
  
• Inflation falls for the fifth week
  
• April export growth better than expected. Import growth even faster and trade deficit widens
  

Indian stock markets gained this week, helped by the momentum in other global markets, but continue to lag other emerging markets. The MSCI India index returned 1.81 per cent for the week in US dollars as compared to a return of 2.76 per cent for the MSCI Emerging Markets index.

For the year, MSCI India index has returned 16.51 per cent in US dollars as compared to 14.34 per cent returned by MSCI Emerging Markets Index. Returns in Indian rupees on the MSCI India index for the year is at a much lower 6.67 per cent because of the currency appreciation.

For the current quarter, MSCI India index has returned 20.55 per cent in dollar terms as 11.72 per cent for the MSCI Emerging Markets index.