| While much has been made of the decline in confidence levels in the economy, thanks to the rupee's appreciation and interest rate climate, this could be exaggerated. The NCAER, whose Business Confidence Index (BCI) has declined sharply in the latest round, indicates as much. According to the think-tank, the BCI generally tends to fall in the year's first quarter, for instance, though 2005 was an exception. Indeed, what's surprising is that while capital goods continue to do well with investment levels in the country rising, the dip in expectation levels in this segment are the highest "" of course, this is also the segment likely to be hit the most by rising interest rates. Interestingly, while the mood is morose in the capital goods sector, it is more upbeat in the consumer goods sector. Finally, NCAER points out, while the Political Confidence Index (PCI) moved in tandem with the BCI in the past, it has moved in the opposite direction (the PCI has improved) this time around, another indicator that seasonal factors are also at play. |
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