Stocks in India Rise on Regional Gains, Earnings

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

The Sensex 30 index gained after markets in Asia closed higher and European markets rebounded after China refuted media speculation that it may shy away from the euro-zone sovereign debt.

[R]6:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai tracked gains in Asian markets and positive earnings from Colgate Palmolive India, Bharat Petroleum and Godrej Industries. The NSE plans to permit short stock sale in the near future. Reserve Bank of India eased liquidity for banks and corporations.[/R]

The Sensex 30 index gained after markets in Asia closed higher and European markets rebounded after China refuted media speculation that it may shy away from the euro-zone sovereign debt.

Colgate Palmolive (India) Ltd, Bharat Petroleum and Godrej Industries closed higher on better than expected earnings.

The Sensex index in India increased 278.56 or 1.70% to 16,666.40 and CNX Nifty index rose 43.25 or 0.88% to 4,960.65. Among the Sensex 30 stocks, 23 rose and 7 fell.

On BSE trading, 1,498 stocks advanced, 1,217 declined and 105 were unchanged.

Rupee edged higher 34 paisa to Rs. 47.36 against one dollar.

Gold and other precious metals, traded near a one-week high as investors preferred precious metals on the ongoing worries of euro-zone debt default and widening fiscal crisis in the region. Gold closed near its record high of $1,212 an ounce in New York trading.

The National Stock Exchange, the country’s largest bourse, is planning to permit short stock sales within the next few weeks aimed at luring investors to the local market.

‘The bourse will introduce short selling to meet a huge demand, CEO Ravi Narain said in an interview at his office in Mumbai today.

The NSE’s average daily turnover in equities has more than doubled in the past four years according to data available on its website. The bourse is also seeking to speed up transaction time from five milliseconds to less than one millisecond by the end of the year.

The Reserve Bank of India eased rules in an ad-hoc effort to boost liquidity at banks to avoid a cash crunch as advance tax payments and license fee for third-generation mobile-phone spectrums become due.

Banks can now borrow as much as 0.5% of their deposits under the repurchase agreement, the RBI said in an e-mailed statement yesterday. They can also seek waiver of penalties for not maintaining the minimum amount of securities to be held under the statutory liquidity ratio. These measures are available for the nation’s banks from May 28 to July 2.

General Motors Co, is likely to scrap its venture to develop an electric compact car in India after Mahindra & Mahindra Ltd agreed to acquire a stake in Reva Electric Car Co.

‘We may not continue the Spark EV venture with Reva in light of this development’, said P. Balendran, a spokesperson for GM’s India unit in an e-mail response to questions from Bloomberg News.

The Rs 2,760 crore IDR issue of StanChart managed to get a subscription of just 10% at the end of second day of the offer on Wednesday with most bids coming from qualified institutional investors. Retail investors stay away from the country’s maiden IDR issue.

Daikin Air-conditioning India Pvt Ltd, a 100% subsidiary of Daikin Industries of Japan is entering the residential market with the launch of new products in the 0.75 to 1.8 ton split air-conditioning segment of the market, by focusing on smaller cities.

Toshiki Hayashi, Managing Director of the company told The Hindu that the company is aiming a market share of 15% by 2013 from the current 6% now and also triple the sales from Rs 500 crore in 2009 to Rs 1,500 crore in 2013.

Gainers & Losers

Apollo Hospitals Enterprise Limited surged 11.4% to Rs 743.75 after the company said its board will meet on Friday, May 28, to consider sub-division of equity shares.

Bharat Petroleum Corporation Limited added 4.3% to Rs 572.95 after the petroleum refiner and distributor said third quarter sales rose 42% to Rs 37,551 crore from Rs 26,505 crore a year ago. Net profit for the quarter fell 81% to Rs 703.2 crore compared to net profit of Rs 3,628 crore a year ago.

Colgate-Palmolive (India) Limited added 3.1% to Rs 714.70 after the oral care products manufacturer said fourth quarter sales rose 13% to Rs 516.6 crore from Rs 455.5 crore a year ago. Net profit for the quarter rose 48% to Rs 114.4 crore compared to net profit of Rs 77.1 crore a year ago.

Emami Limited added 5.3% to Rs 665.05 after the company said its board will meet on Friday, May 28, to consider a 2-for-1 stock split.

Fortis Healthcare Limited increased 6.3% to Rs 147.25 after the Malaysian sovereign wealth fund Khazanah launched an $835 million bid for control of Parkway Holdings potentially pitting it against the company in a battle for Singapore''s largest private healthcare provider.

Godrej Industries Limited rose 1.1% to Rs 146.40 after the manufacturer and marketer of oleo-chemicals said full year sales rose 2% to Rs 3,414.2 crore from Rs 3,361.7 crore a year ago. Net profit for the year rose 83% to Rs 203.3 crore compared to net profit of Rs 111.5 crore a year ago.

Gujarat Alkalies and Chemicals Limited rose 3.8% to Rs 116.00 after the company reported fourth quarter net profit rose 296.8% to Rs 85.63 crore.

Gujarat State Fertilizers & Chemicals Limited dropped 4.7% to Rs 228.70 after the manufacturer of fertilizer and industrial products said third quarter sales fell 8% to Rs 782.5 crore from Rs 847 crore a year ago. Net profit for the quarter fell 63% to Rs 36.8 crore compared to net profit of Rs 98.4 crore a year ago.

Gujarat Narmada Valley Fertilizers Company Limited fell 1.9% to Rs 104.95 after the manufacturer and distributor of fertilizers said fourth quarter sales fell 4% to Rs 506.6 crore from Rs 528.6 crore a year ago. Net loss for the quarter was Rs 38.3 crore compared to net profit of Rs 19.5 crore a year ago.

Kemrock Industries and Exports Limited surged 10.3% to Rs 566.25 after the company announced that it has acquired 80% stake in Top Glass SpA., situated 20 km north east of Milan, Italy.

Mukand Limited gained 8.5% to Rs 63.25 after the company is close to selling a part of its land at Kalwa near Thane for about Rs 600 crore.

REI Agro Limited surged 12.2% to Rs 46.65 after the company fixed record date for rights issue.

Simplex Projects Limited increased 8.2% to Rs 264.00 after the company reported fourth quarter net profit rose 185.5% to Rs 16.73 crore.

Suzlon Energy Limited rose 0.2% to Rs 58.00 after the company said its board will consider rights share issue on Saturday, May 29.