Stock markets use different barometers to assess the performance of businesses. While company specific developments matter to investors, it is also important to look at the overall performance of the industry.
Every month, you see that the stock market awaits the monthly industrial production data. There are two indicators that are used actively. These include the index of industrial production or IIP and purchase managers Index or PMI.
· IIP: The IIP is an indicator of manufacturing in India. It includes 682 products from 16 agencies covering sectors like mining, electricity and other manufacturing activities. Each industry is attached a weight. Mining has a weight of 14.2%, manufacturing has a weight of 75.5% and electricity has a weight of 10.3.
· PMI: The Purchasing Managers’ Index is a composite index constructed on the basis of survey responses collected from over 500 private manufacturing companies. The purchasing executives of these companies are questioned on new