Business, investor confidence in India dips

Business and investor confidence in India has dipped to its lowest level since January 2005, reveals a survey by leading Indian think tank National Council of Applied Economic Research (NCAER) Saturday.

"The Business Confidence Index (BCI) for April-June 2006 decreased by eight percent over its previous round, and reached 141, which is the lowest since January 2005," Indo-Asian News Service quoted the NCAER as saying.

The quarterly comparison shows that as compared to 2006 and 2005, BCI in the first quarter (April-June) of this year has dropped by about 1.6 percent.

The drop has also been the steepest NCAER said.

"This is the steepest fall since July 2004. The downward movement in BCI reflects mainly the recent shocks in the capital market and a general uncertainty in the economy, partly influenced by high oil prices and the rise in the prices of primary articles, " the report stated.

The result is market sentiments are still to revive and there has been no fresh issue in the last one month.

The report noted that investors' interest in making investments in stocks had declined substantially in the last two months since the market has been in turmoil.

The 30-share sensitive index has declined 2,000 points during this period, closing at 10,500 in the recent past (June 13-16).

The NCAER study pointed out that the ratings of the macroeconomic indicators such as overall economic conditions and the investment climate dropped by 12.4 and 4.3 percentage points respectively over their levels in the previous round.

Source: Xinhua