“The release of February IIP at 4.1% is far below the market consensus of about 6.7%. Also, the rate and degree of revision of previous month’s data is increasingly making reliance on the data a challenge. From growth inflation dynamic perspective it is increasingly getting clear that focus has to shift to growth and hence the market expectation of rate cut from the RBI has increased post this data release and bond yields and equity markets are reflecting the expectation. Global dynamics especially Oil prices are critical and RBI would also get to see the inflation release on April 16, 2012 before it takes a stand on rate cuts.”
Sudhakar Shanbhag, Chief Investment Officer, Kotak Mahindra Old Mutual Life Insurance Limited