Market Rumours

India's industrial production has risen at its fastest pace in more than a decade, providing further evidence of the country's strong economic recovery.Factory output rose by 16.8% in December compared with a year earlier, much faster than analysts had expected.Subdued growth last year as a result of the global economic downturn helped to boost this year's figure in comparison. The strong growth will strengthen the case for the government to withdraw its stimulus measures, analysts said."We are going to see some rollback of fiscal stimulus in the 26 February federal budget," said Rahul Bajoria at Barclays Capital."The need to support the manufacturing sector through duty cuts is no longer there."

The Spanish economy shrank by 0.1% in the last three months of 2009, making it the last major economy still in recession.INE, the national statistics agency, also said the country's gross domestic product had contracted by 3.1% compared with the same period a year before.Europe's fifth-largest economy has the highest rate of unemployment in the eurozone, hitting 19.5% in December.For 2009 as a whole, INE said the Spanish economy contracted by 3.6%."Unemployment is the greatest problem for the Spanish economy," said Professor Juan Jose Toribio, who is dean of the IESE Business School in Madrid."The government is trying to moderate it by bringing in policies to support domestic demand but this has failed at least in terms of creating unemployment."The Spanish government announced a 50bn euro austerity package, including a civil service hiring freeze, at the end of January.