Indian economy on wings: Everything's looking up!

A day after the government released buoyant growth figures of 8.8 per cent, there was corroborating evidence on Wednesday that the India story was firmly on track.

Automakers, for instance, posted robust sales for August over the same month last year. Maruti, which accounts for one out of every two cars sold in the country, said sales grew nearly 24 per cent. M&M reported a rise of 29 per cent, while Tata Motors recorded an even higher 32.4 per cent.

"This is the highest ever monthly sales recorded by the company," Maruti Suzuki said in a statement.

It is the third time this financial year that the company's monthly sales have crossed the 100,000-mark.

With figures like that, it is hardly surprising that the seasonally-adjusted HSBC purchasing manager's Index data, which was released on Wednesday, stood at 57.2 per cent for August, a shade shy of the 57.6 per cent in July.

A reading of above 50 indicates expansion in manufacturing activities. This is the 17th consecutive month in which Indian manufacturing has registered expansion.

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Despite a slight moderation in the rate of acceleration, the report said manufacturing growth in India remained above the long-run average for the series.

"India's economy shows no signs of cooling off. Output continues to expand at a brisk pace and new orders remain in solid expansionary territory," said Frederic Neumann, co-head of Asian Economic Research at HSBC.

North Block data resounded on Mumbai's Dalal Street on Wednesday, where the benchmark Bombay Stock Exchange Sensex regained the 18,000-mark as investors aggressively bought large-cap stocks.

The 30-stock index gained 1.31 per cent, or 234.75 points, to finish at 18,205.87. It touched a high of 18,227.14 during the day's trade.

Nearly half the gains on the Sensex came from the top three index heavyweights: RIL, Infosys and ICICI Bank.

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At the National Stock Exchange, the broader 50-stock Nifty advanced 1.29 per cent, or 69.45 points, to 5,471.85. "All is well in India," said Gopal Agrawal, equity head at Mirae Asset Management.

That sentiment was more than evident on the bullion market, where gold climbed to an all-time high of Rs 19,405 per 10 gm after frantic buying by stockists to meet rising demand for the ongoing festival season.

In Mumbai's famous Zaveri Bazaar, standard gold rose 1.03 per cent to close at Rs 19,140 per 10 gram. Overseas guidance helped spur the metal's price, as investors there sought a haven amidst fears about the global economy.

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Reinforcing widening concerns about the global economy, on the automotive front Hyundai Motors India, the country's second-largest carmaker, saw a sharp decline in exports weigh down its overall sales growth to just 2.25 per cent.

However, domestic sales grew 17.2 per cent.

India is one of the fastest growing automobile markets in the world, expanding at 35 per cent on average in the first four months of the current financial year.

The figures declared by Maruti, M&M and Tata Motors continue to dispel fears expressed by the industry body, Society of Indian Automobile Manufacturers, which expects sales to grow no more than 12-13 per cent in the current financial year.

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Among other companies in India, the subsidiaries of three large multinationals rode on the back of small cars, three of which are new to the market. Nissan Motor India registered total sales of 1,249 units in August 2010, with its newly-launched compact Micra clocking 1,182 units. 

In the same month last year, the company sold 22 units. 

Ford's August sales trebled in August to 7,925 units on the back of its latest small car, the Figo, which has already received over 34,000 bookings in the last 25 weeks.

General Motors India registered 34 per cent growth in sales with 7,941 units, with small cars Spark, which has been around for a while, and Beat, which is new, accounting for a large proportion of volumes.