The March manufacturing output has been reported at -4.4%, which was again a very dismal figure and caught analysts by surprise. It may recalled that the Feb IPP data came in at a healthy 4.1%.

The March Mining Sector growth has come in at -1.3%, while the Capital Goods Growth has come in at -21.3%.

The Reserve Bank of India (RBI) had cut repo rates by 50 basis points last month to propel output and growth rates in the economy. However, today's disappointing IIP data may lead to fresh calls for a further cut in the repo rates to boost output. However, the rate cut is unlikely to happen given the high inflation in the economy.

Markets slumped following reports of the dismal IIP data, with the Sensex trading lower by 159 points at 16260 points. Markets are expected to continue to drift lower after the lower than expected IIP data.

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