Sensex in India Drops on Rate Worries

Mayank Mehta
16 Apr, 2010
New York City

Stocks in Mumbai closed lower ahead of interest rate decision next week. Foreign investors increase their exposure to India stocks to $78.2 billion. Reliance Industries takes a stake in Deccan Cargo. Goenka Diamond & Jewels drops 20% on the first day of trading. Kamat Hotels trades at one-year high.

[R]6:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai closed lower ahead of interest rate decision next week. Foreign investors increase their exposure to India stocks to $78.2 billion. Reliance Industries takes a stake in Deccan Cargo. Goenka Diamond & Jewels drops 20% on the first day of trading. Kamat Hotels trades at one-year high.[/R]

Stocks in Mumbai trading declined for the fourth day in a row and fell for the week 1.9% ahead of interest rate decision next week. Elevated inflation, rising food prices and the recent uptick in the international crude prices has contributed to near 20-year inflation peak.

The recent steady fund flows from international investors has also lifted the rupee prompting worries that exports may suffer.

The Sensex index in India decreased 48.08 or 0.27% to 17,591.18 and CNX Nifty index fell 11.00 or 0.21% to 5,256.60. Among the Sensex 30 stocks, 8 rose and 22 fell. The benchmark index Sensex declined for the fourth day in a row.

On BSE trading, 1,178 stocks advanced, 1,705 declined and 124 were unchanged.

Reliance Industries edged lower in volatile trade. Realty stocks fell on fears of interest rate hike by the Reserve Bank of India next week. Auto, IT and telecom stocks also fell. Capital goods stocks were mixed.

Goenka Diamond & Jewels closed at Rs 108.40, a discount of 19.70% to the initial public offer price of Rs 135.

Airlines declined after state-run oil marketing companies reportedly raised jet fuel price by 3.2% effective from midnight of April 15 following rise in global crude prices.

Rupee edged lower 12 paisa to 44.55 against one dollar after reaching 19-month high yesterday. The industry group Confederation of Indian Industry this week urged the government to arrest the rise in the rupee to protect the “nascent recovery.”

Gainers & Losers

CMC gained 1.3% to Rs 1,493 after the company reported third quarter net profit rose 21.6% to Rs 39.22 crore.

DLF Limited dropped 3.4% to Rs 326.50 after the stock gained nearly 14% in the past twelve sessions.

Financial Technologies (India) Limited added 3.1% to Rs 1,571.00 after the company and Multi Commodity Exchange of India reduced their stakes in MCX Stock Exchange to pave the way for the launch of its stock trading platform.

Godrej Consumer Products Limited added 4.8% to Rs 311.65 after the company is in talks to acquire a Brazil based hair care company.

ICICI Bank Limited rose 0.8% to Rs 925.45 and the stock corrected 6% in the preceding three trading sessions.

Kamat Hotels (India) Limited surged 17.5% to Rs 130.10 after foreign funds bought 1.49% stake in the Mumbai-based firm on April 15.

Reliance Industries Ltd declined 0.6% or Rs 6.45 to Rs 1,084 and the oil, chemical and retail conglomerate agreed to take a stake in cargo air Deccan Cargo & Express Logistics Pvt. The cargo carrier has 300 tons of airlift capacity and flies to fifteen airports with eight aircrafts. The company has a fleet of 300 trucks and 850 vehicles according to its Web site.

Reliance is building its network of grocery and shopping retail chain and plans to use the airline as a part of its supply chain.

Ramco Systems Limited gained 6.9% to Rs 117.75 after the company and ESIS, the supply chain network, announced a partnership that extends Ramco''s repair, procurement and invoicing functions directly into the supply chain.

Steel Strips Wheels Limited gained 5.7% to Rs 149.05 after the automotive wheel rims maker will supply tractor wheel rims to a Turkey-based Turk Traktor.

Tanla Solutions Limited rose 3.9% to Rs 47.95 after the provider of technology services in wireless communications industry reboots received a large order. Company did not disclose the order size.

VST Industries Limited decreased 1.0% to Rs 552.50 after the maker of cigarettes and tobacco wholesaler said fourth quarter sales rose 10.8% to Rs 105.7 crore from Rs 102.19 crore a year ago. Net profit in the quarter declined to 81% to Rs 3.44 crore compared to net profit of Rs 18.1 crore a year ago.