India Q2 FY 2011-2012 GDP growth below 7 percent

Indian economy grew by just 6.9% in the second quarter of the 2011-12 financial year, breaking below the 7% mark. Q1 GDP was at 7.7%.

The government has projected overall economic growth in the current fiscal at around 8.5%, while the Reserve Bank has projected the growth to moderate to 8% from 8.5% in FY'11. But the current quarter GDP suggest that we might not be able to achieve even 7% GDP in current financial year.

Manufacturing sector grew by 2.7% while Construction sector grew by 4.3% vs 6.7% (y-o-y). Mining went down by -2.9%.　

GAIL enters SENSEX, replaces Jaiprakash Associate

Gas Authority of India Limited (GAIL), India largest gas distribution company, will replace Jaiprakash Associate in SENSEX, the 30 stock benchmark index of BSE, from 9th Dec 2011.

JP Associate has been a significant under performer since past 1 year and has lost significant market capitalization, which has compelled it to be moved out of the India's most tracked index.

At the current market price of Rs.60 the market value of JP Associate stands at Rs. 12,900 crores.

GAIL on the other hand has the current market capitalization of Rs. 48,700 crores, almost four times the size of JP Associate. 

The news would put further pressure on JP Associate and the stock could correct further from the current levels. On the other hand GAIL could see more money flowing into its stock and hence could give decent return from the current price of Rs. 384.