R.K. Gupta, managing director of Taurus Asset Management Ltd., which manages $1.1 billion in assets, comments after India’s industrial production growth unexpectedly slowed in May. He spoke by phone from New Delhi.
Output at factories, utilities and mines rose 5.6 percent from a year ago following a revised 5.8 percent gain in the previous month, the Central Statistical Office said today. The median of 27 estimates in a Bloomberg News survey was for an 8.5 percent jump.
The Bombay Stock Exchange Sensitive Index fell 1 percent to 18,525.77 as of 12:13 p.m. in Mumbai, set for a two-week low.
“The numbers show that Indian companies are shying away from making investments and are shifting their investments overseas market. Growth is slowing and this trend is unlikely to reverse given the geopolitical scenario in the country. We haven’t seen enough in terms of decision-making from the government.”
On stock markets:
“Indian equities continue to be driven by foreign fund flows. The slowdown in industrial output may force the central bank to pause on rates at its July 26 meeting, which could act as a positive and bring some relief for the markets.”