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IMD's monsoon forecast: Too early for markets to run into rough weather

A sub-par monsoon can has the potential to fan inflation and impact the country's economic outlook

Puneet Wadhwa  |  New Delhi 

IMD's monsoon forecast: Too early for the markets run into rough weather

Indian Metrological Department (IMD) has predicted a normal season in 2017 (June - September) with a fair distribution across the country. 2017, according to the government forecaster, will be qualitatively 96 per cent of long-period average (LPA), with a model error of plus or minus five per cent.

Private weather forecaster, Skymet, had recently predicted below-normal at 95% of the long-period average (LPA) and cautioned against sever heatwave conditions in northern India.

Also Read: Another private firm echoes view on below-average monsoon

These forecasts assume importance as around 70% of India's happens in this period and irrigates almost half of the country's farmland, being of particular importance for crops. That apart, a sub-par can has the potential to fan and impact the country's economic outlook.

"The impact of dynamics, as well as other risks such as the goods and services tax, won't be clear for at least a few more months. In addition to the overall level, the timing of would be crucial. Higher in the early part of the may support sowing. However, adequate in the second half of the season would remain important for yields," explains Aditi Nayar, principal economist, Limited.

So, how are the likely to read into these developments?

Having run up around 17% since the start of calendar year 2017 (CY17), analysts feel the may still wait for the full impact, which will only be visible in the second half of calendar year 2017.



Also Read: Monsoon likely to remain below normal for India in 2017: Skymet

"The market response in the past has not been consistent. From a fundamental standpoint, a sub-par will impact the rural In such a scenario, the government's response to such a situation becomes critical. Having said that, is difficult to predict and we still are in the month of April. I think the will respond to this as we go along and we have more credible data in the coming months," says Dhananjay Sinha, Head of Research and Strategist, Financial Services.

Also Read: Farmers look at drought-resistant crops fearing monsoon deficit

Besides monsoon, are also likely to react to other variables going ahead such as implementation of the goods and services tax (GST) bill, corporate earnings on the domestic front; and developments across the US, euro-zone, outcome of the elections in the United Kingdom, geopolitical situation and oil price trajectory are some of the events will impact market sentiment.

"Two consecutive normal monsoons will be good for the and will aide rural sector demand. Even if the is 90 per cent of the LPA, I think it will be good for the overall and will be taken positively by the However, the have run up sharply in calendar year 2017 (CY17) and are waiting for a trigger to correct," says says G Chokkalingam, founder and managing director of & Advisory.

"For now, I think the have crossed the first hurdle of and will keep a tab on events such as corporate earnings, GST implementation and other global developments," he adds.

 

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IMD's monsoon forecast: Too early for markets to run into rough weather

A sub-par monsoon can has the potential to fan inflation and impact the country's economic outlook

A sub-par monsoon can has the potential to fan inflation and impact the country's economic outlook Indian Metrological Department (IMD) has predicted a normal season in 2017 (June - September) with a fair distribution across the country. 2017, according to the government forecaster, will be qualitatively 96 per cent of long-period average (LPA), with a model error of plus or minus five per cent.

Private weather forecaster, Skymet, had recently predicted below-normal at 95% of the long-period average (LPA) and cautioned against sever heatwave conditions in northern India.

Also Read: Another private firm echoes view on below-average monsoon

These forecasts assume importance as around 70% of India's happens in this period and irrigates almost half of the country's farmland, being of particular importance for crops. That apart, a sub-par can has the potential to fan and impact the country's economic outlook.

"The impact of dynamics, as well as other risks such as the goods and services tax, won't be clear for at least a few more months. In addition to the overall level, the timing of would be crucial. Higher in the early part of the may support sowing. However, adequate in the second half of the season would remain important for yields," explains Aditi Nayar, principal economist, Limited.

So, how are the likely to read into these developments?

Having run up around 17% since the start of calendar year 2017 (CY17), analysts feel the may still wait for the full impact, which will only be visible in the second half of calendar year 2017.

Also Read: Monsoon likely to remain below normal for India in 2017: Skymet

"The market response in the past has not been consistent. From a fundamental standpoint, a sub-par will impact the rural In such a scenario, the government's response to such a situation becomes critical. Having said that, is difficult to predict and we still are in the month of April. I think the will respond to this as we go along and we have more credible data in the coming months," says Dhananjay Sinha, Head of Research and Strategist, Financial Services.

Also Read: Farmers look at drought-resistant crops fearing monsoon deficit

Besides monsoon, are also likely to react to other variables going ahead such as implementation of the goods and services tax (GST) bill, corporate earnings on the domestic front; and developments across the US, euro-zone, outcome of the elections in the United Kingdom, geopolitical situation and oil price trajectory are some of the events will impact market sentiment.

"Two consecutive normal monsoons will be good for the and will aide rural sector demand. Even if the is 90 per cent of the LPA, I think it will be good for the overall and will be taken positively by the However, the have run up sharply in calendar year 2017 (CY17) and are waiting for a trigger to correct," says says G Chokkalingam, founder and managing director of & Advisory.

"For now, I think the have crossed the first hurdle of and will keep a tab on events such as corporate earnings, GST implementation and other global developments," he adds.

 

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Business Standard
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IMD's monsoon forecast: Too early for markets to run into rough weather

A sub-par monsoon can has the potential to fan inflation and impact the country's economic outlook

Indian Metrological Department (IMD) has predicted a normal season in 2017 (June - September) with a fair distribution across the country. 2017, according to the government forecaster, will be qualitatively 96 per cent of long-period average (LPA), with a model error of plus or minus five per cent.

Private weather forecaster, Skymet, had recently predicted below-normal at 95% of the long-period average (LPA) and cautioned against sever heatwave conditions in northern India.

Also Read: Another private firm echoes view on below-average monsoon

These forecasts assume importance as around 70% of India's happens in this period and irrigates almost half of the country's farmland, being of particular importance for crops. That apart, a sub-par can has the potential to fan and impact the country's economic outlook.

"The impact of dynamics, as well as other risks such as the goods and services tax, won't be clear for at least a few more months. In addition to the overall level, the timing of would be crucial. Higher in the early part of the may support sowing. However, adequate in the second half of the season would remain important for yields," explains Aditi Nayar, principal economist, Limited.

So, how are the likely to read into these developments?

Having run up around 17% since the start of calendar year 2017 (CY17), analysts feel the may still wait for the full impact, which will only be visible in the second half of calendar year 2017.

Also Read: Monsoon likely to remain below normal for India in 2017: Skymet

"The market response in the past has not been consistent. From a fundamental standpoint, a sub-par will impact the rural In such a scenario, the government's response to such a situation becomes critical. Having said that, is difficult to predict and we still are in the month of April. I think the will respond to this as we go along and we have more credible data in the coming months," says Dhananjay Sinha, Head of Research and Strategist, Financial Services.

Also Read: Farmers look at drought-resistant crops fearing monsoon deficit

Besides monsoon, are also likely to react to other variables going ahead such as implementation of the goods and services tax (GST) bill, corporate earnings on the domestic front; and developments across the US, euro-zone, outcome of the elections in the United Kingdom, geopolitical situation and oil price trajectory are some of the events will impact market sentiment.

"Two consecutive normal monsoons will be good for the and will aide rural sector demand. Even if the is 90 per cent of the LPA, I think it will be good for the overall and will be taken positively by the However, the have run up sharply in calendar year 2017 (CY17) and are waiting for a trigger to correct," says says G Chokkalingam, founder and managing director of & Advisory.

"For now, I think the have crossed the first hurdle of and will keep a tab on events such as corporate earnings, GST implementation and other global developments," he adds.

 

image
Business Standard
177 22