<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[<p>India's industrial output probably rose 8.2 per cent in May from a year earlier, on a favourable statistical base effect and strong exports and infrastructure growth, the median forecast in a Reuters poll showed.<br><br>The forecasts, from 29 analysts, ranged from 5.2 per cent to 10.0 per cent.<br><br>April's industrial output data was the first in a new series, with 2004-05 as the base year.<br><br>Annual industrial output growth in April dipped to 6.3 per cent, compared with 8.8 percent in March, indicating taut monetary policy and soaring inflation were acting as brakes on the economy.<br><br><strong>Factors To Watch</strong><br>* India's exports in May rose an annual 56.9 per cent to $25.9 billion, government data showed this month.<br><br>* India's infrastructure output grew 5.3 per cent in May, slightly faster than an annual growth of 5.2 percent growth in April.<br><br>* The HSBC Markit Purchasing Managers' Index, a key indicator of manufacturing, remained in expansionary territory, despite plunging to a nine-month low of 55.3 in June from 57.5 in May.<br><br><strong>Market Impact</strong><br>* The yield on the government bonds may fall or rise 2-3 basis points, if the output data comes sharply below or above the 8.2 percent forecast. Traders said a print between 8-8.5 percent should be a non-event for the market.<br><br>* The overnight indexed swaps could mirror the government bond market, depending on how much of a surprise or shock the number throws up.<br><br>* Due to the sharp fluctuations seen in recent months in the output data, dealers do not expect a big move in yields in either direction and would rather focus on Thursday's inflation data for a clearer direction on the central bank's July 26 policy review.<br><br>(Reuters)</p>