India's industrial production slumps to -0.1%

Post an impressive 8.3% record in October.

According to Nomura, industrial production (IP) growth fell to -0.1% y-o-y in November after growth of 8.3% y-o-y in October, broadly in line with market expectations (Consensus: 0.1%; Nomura: -3.0%).

The almost-flat IP reading in November surprised us as there was a strong, negative base effect from a loss of working days – in 2012, the Diwali festival occurred in November, but in 2011 it was in October.

Here's more from Nomura:

Therefore, this month‟s reading may be indicative of a pickup in manufacturing activity. Among the components, the consumer durable goods category posted higher-than-expected growth, which led to the surprise.

Nonetheless, we believe the underlying growth momentum is likely to pick up only gradually due to weak domestic and external demand. At best, we would describe the industrial cycle as stabilizing, and we expect only a shallow recovery in the near term.