India’s Business Confidence Rises After RBI Cut

A hefty rate cut by the Reserve Bank of India late last month boosted business confidence in Asia’s third-largest economy, a survey showed Tuesday.

The MNI India Business Sentiment Indicator, a barometer of confidence among companies on the Bombay Stock Exchange, climbed to 62.3 in October from 61.4 in September, said MNI Indicators, which produces the survey.

A rise in sentiment was reported across the manufacturing and construction sectors, while sentiment among service sector companies fell for the fourth consecutive month.

India’s central bank surprised markets last month by cutting its key interest rate by 0.50 percentage points to 6.75 percent, its fourth interest rate reduction this year.

The flurry of rate cuts by India’s central bank are starting to have an impact, as MNI Indicators said the cost of debt servicing for panel companies fell to a record low.

The increase still belies a softer outlook for goods produced by Indian companies. The read is also disappointing given that there is usually more consumer activity in anticipation of the festive period. India will celebrate the Diwali festival on November 10.

via CNBC

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza