Manufacturing in India is growing at a slower state.

The Indian Rupee remains at levels of 83-83.4 Rupees per US Dollar, and the trend suggests that the Rupee could further depreciate. This is due to continuous outflows of foreign capital, driven by investor concerns about increasing inflation. Additionally, the Reserve Bank of India (RBI) has been selling foreign exchange reserves several times to support the Rupee from falling below the 83.3 Rupees per US Dollar level, selling more than 23 billion US Dollars in the past four months.

The inflation rate in India decreased to 4.87% in October, slightly higher than the expected 4.8%, primarily due to a 0.39% decline in crude oil prices. However, food inflation increased significantly, with prices of spices rising by 22.76%, oilseeds by 18.79%, cereals by 10.65%, eggs by 9.3%, and sugar by 5.5%.

Industrial production in India increased by 5.8% YoY in September. However, there are signs of a slowdown, with factory production growing by 4.5% compared to 9.3%, mining increasing by 11.5% compared to 12.3%, and electricity production rising by 9.9% compared to 15.3%, all in comparison to August.

The Services PMI in India decreased to 58.4 in October from 61.0 in September. Despite continuous economic growth, pressures on utilities and declining prices of goods and services have slightly dampened the expansion trend in the services sector. Employment and raw material prices continue to rise, leading to a rapid increase in production cost inflation and a decline in business confidence.

The Manufacturing PMI also decreased to 55.5 in October, with factory activity growing at the slowest rate since February. Rising raw material and production costs continue to impact the manufacturing sector. Amid decreasing concerns about utilities, the rate of input cost inflation has accelerated, contributing to a reduction in business confidence.

The yield on 10-year government bonds in India has rapidly declined, reaching close to 7.3% recently. This is influenced by decreasing concerns about inflation in India and is also impacted by the declining yield on US government bonds. Investors anticipate that the current high-interest rate trend may persist for some time, despite expectations that reducing inflation may be more challenging than anticipated.

Techical analysis data (5H)

Resistance: 83.331, 83.358, 83.385

Support: 83.277, 83.250, 83.224

Source: Investing.com