Sensex Declines; Strong Demand in 3G Auction

Mayank Mehta, Chandrasekhar Atreya and Darlington Musarurwa
04 May, 2010
New York City

Stocks in Mumbai traded lower after a rail strike in Mumbai affected trading. 3G wireless license auction is expected to fetch as much as $10 billion ahead of the government target of $8 billion.

[R]6:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai traded lower after a rail strike in Mumbai affected trading. 3G wireless license auction is expected to fetch as much as $10 billion ahead of the government target of $8 billion.[/R]

BSE trading volumes and India’s foreign exchange markets dropped after a flash strike by suburban rail motormen of Mumbai kept many traders, dealers and investors from reaching their offices.

10-year bonds rose for a second day on speculation banks will step up purchases to cover increases in deposits as local laws require lenders to invest at least 25% of deposits in government debt or other low-risk notes approved by the Reserve Bank of India.

Personal savings climbed 16% in the 12-month period ended April 9, a RBI report on April 30 stated.

The ongoing 3G spectrum auction reached record high on Monday with the winning provisional price for the pan-India license crossing Rs 10,000 crore.

At the end of the day 20 and after 116 rounds of bids, the winning price touched Rs 10,348 crore and at this price the government should receive Rs 42,000 crore, surpassing the target of Rs 35,000 crore.

The Sensex index in India decreased 248.94 or 1.43% to 17,137.14 and CNX Nifty index fell 37.20 or 0.71% to 5,185. Among the Sensex 30 stocks, 7 rose and 23 fell.

On BSE trading, 1,163 stocks advanced, 1,629 declined and 101 were unchanged. Metal and realty stocks led the fall. Reliance Industries edged lower in volatile trade.

Rupee edged higher 3 paisa to Rs 44.48 against one dollar.

Gainers & Losers

Glenmark Pharmaceuticals Limited added 2.8% to Rs 287.90 after the company reported its generics unit has signed a licensing agreement with Par Pharmaceutical Cos. Inc., to market a generic cholesterol drug made by the Indian company.

HCL Technologies Limited added 2.1% to Rs 398.35 after the software firm said that it has signed a five-year IT management deal worth $500 million with pharmaceutical company based in Europe, Merck Sharp.

Hindustan Motors Limited declined 7.2% to Rs 21.70 after the company reported fourth quarter net loss of Rs 31.82 crore compared to net loss of Rs 25.28 crore a year ago.

Idea Cellular Limited rose 0.2% to Rs 63.55 after the mobile communication operator said fourth quarter sales rose 15.4% to Rs 3,211.9 crore from Rs 2,783.3 crore a year ago. Net profit for the quarter fell 12% to Rs 262.5 crore or Rs 0.84 per share compared to net profit of Rs 297.3 crore or Rs 0.96 per share a year ago.

Kansai Nerolac Paints Limited gained 6.1% to Rs 1,526.00 after the company’s board approved a bonus issue in the ratio of 1-to-1.

Maharashtra Seamless Limited fell 2.0% to Rs 382.45 after the manufacturer of seamless pipes said fourth quarter sales fell 29% to Rs 388.1 crore from Rs 548.6 crore a year ago. Net profit for the quarter rose 16% to Rs 75.1 crore compared to net profit of Rs 64.6 crore a year ago.

McNally Bharat Engineering Co. Limited rose 2.6% to Rs 342.15 after the company said it received on Tuesday a $25.3 million order from Konkola Copper Mines PLC, a unit of London-listed mining conglomerate Vedanta Resources PLC.

Mirc Electronics Limited rose 1.9% to Rs 18.15 after the manufacturer and marketer of electronics goods said fourth quarter sales rose 29% to Rs 393.4 crore from Rs 305.2 crore a year ago. Net profit for the quarter was Rs 5.2 crore compared to net loss of Rs 3.2 crore a year ago.

Indian Oil Corporation, India’s second largest refiner is expected to cut naphtha exports by 37% after it started a plant that will use naphtha to produce polymers used to make plastics. Shipments may drop to 1.7 million tons in the 12 months beginning April from 2.7 million tons a year earlier said S.V. Narasimhan, Director of Finance in an interview today with Bloomberg.

Naphtha exports from India grew 25% to 9.6 million tons in the 12 months to March 2010, according to data from the government’s Petroleum Planning and Analysis Cell. Exports started to climb after Reliance Industries Ltd last year started producing gas as an alternative fuel to naphtha.

Subhash Projects and Marketing Limited climbed 2.7% to Rs 167.65 after the company secured a project worth Rs 457.2 crore in the state of Rajasthan.

TTK Prestige Limited dropped 3.8% to Rs 610.15 after the maker of kitchen appliances said fourth quarter sales rose 45% to Rs 123.5 crore from Rs 85.3 crore a year ago. Net profit for the quarter rose 265% to Rs 12.8 crore compared to net profit of Rs 3.5 crore a year ago.

Welspun Gujarat Stahl Rohren Limited added 1.7% to Rs 276.15 after the company said its subsidiaries have initiated agreements to acquire a majority stake in a pipe coating facility in Saudi Arabia.