Earnings Outlook Lift India Stocks

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
10 Jun, 2010
New York City

Stocks in Mumbai trading gained for the second day today on expectations that better than expected earnings.

[R]5:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai traded higher on better than expected earnings growth. India plans to raise $30 billion by selling stakes in 35 state-owned companies. Reliance Power Ltd buys three coal Mines in Indonesia. Nagarjuna Construction Co Ltd secures new orders.[/R]

Stocks in Mumbai trading gained for the second day today on expectations that better than expected earnings.

The Sensex index in India increased 264.19 or 1.59% to 16,922.08 and CNX Nifty index rose 53.70 or 1.07% to 5,054. Among the Sensex 30 stocks, 27 rose and 3 fell.

On BSE trading, 1,632 stocks advanced, 1,061 declined and 113 were unchanged. Reliance Industries edged higher. Buying was also conspicuous in auto and capital goods stocks rose. Reliance Infrastructure surged.

Rupee edged higher 5 paisa to Rs. 46.96 against one dollar.

The wholesale price index in India increased 0.5% to 301.7 from 300.3 for the previous week. For the year ending in the week average inflation surged to 17.21% compared to 5.58% in the same period a year ago.

Confirming its intention of disinvestment, the Indian government on Wednesday said that it will sell stake in 35 state-owned companies over the next five years with an aim to raise nearly Rs 150,000 crore in revenue.

“The move to disinvest 35 companies is expected to generate about Rs 150,000 crore in revenue for the central government,” said Minister of State for Heavy Industries and Public Sector Enterprises, Arun Yadav, while talking to reporters in New Delhi.

Caught in a takeover battle for Singapore-based hospital chain Parkway Holdings Ltd, Fortis Healthcare said yesterday that it would raise up to Rs 2,750 crore through the securities market. Its board has also approved a proposal to increase the company’s borrowing capital to Rs 6,000 crore.

“All options to deal with potential investment opportunities have been kept open and are being evaluated in the best interest of all shareholders,” said Fortis in a statement. The company which has a 23.9% stake in Parkway is now facing a challenge from Malaysian Sovereign Wealth Fund, Khazanah Nasional Bhd in its efforts to build up a controlling stake in Parkway Holdings.

Life Insurance Corp of India on Wednesday signed an agreement with the Unique Identification Authority of India to act as its registrar for the delivery of the unique 12-digit identity numbers to customers, making it the first institution other than state governments to sign up with the authority.

The UIDAI has developed the number based on demographic and biometric data that will permit Indian residents to establish their identity to facilitate interactions with various public and private agencies.

Citigroup Inc sold about 4.7 million shares of 22 Indian companies, including Reliance Industries Ltd and ICICI Bank Ltd, which were bought by ABN Amro Bank NV, the Economic Times reported, citing data from the Bombay Stock Exchange.

Geojit BNP Paribas, a leading financial services company is planning to open 75 new offices across India in the current fiscal year and increase the total branches to 600. Yesterday, Managing Director C.J. George in Chennai while talking to reporters.

“The company’s assets under management recently crossed the Rs 10,000 crore. We have joint ventures in the Middle East providing services to the large non-resident Indians in UAE, Dubai Oman and Saudi Arabia,” said George.

Gainers & Losers

ACC Limited rose 1.36% to Rs 869.70 after the company''s cement dispatches fell 3.85% to 1.75 million tons from a year ago.

Andrew Yule & Co. Ltd rose 0.02% to Rs 32.74 on reports the company is entering specialty tea segment to shore up its margins.

Bharti Airtel Limited rose 4.81% to Rs 285.25 extending gains for the second consecutive day, after the company completed the acquisition of African assets of Kuwait''s Zain for $10.7 billion.

Cairn India Limited rose 2.29% to Rs 297.10 after crude oil prices gained more than 3% on the New York Mercantile Exchange on June 9.

Dish TV India Limited rose 5.35% to Rs 42.30 after the company scheduled a board meeting on June 11 to consider a proposal for internal business restructuring.

Dr. Reddy’s Laboratories Limited rose 1.66% to Rs 1,490.35 after the company''s American Depository Receipt or ADR surged 4.96% to $32.60 on the New York Stock Exchange on June 9.

Hinduja Global Solutions Limited rose 1.85% to Rs 448.60 on reports the company is eyeing acquisitions in the US, UK and Latin America in the customer relationship management segment.

Hindustan Construction Company Limited rose 1.98% to Rs 113.35 after the company divested 74% stake in its new age business destination ''247Park'' in Mumbai to IL&FS Milestone Fund.

JSW Energy Ltd rose 2.35% to Rs 121.70 after the company entered into an agreement to acquire 70% stake in Indian Ocean Mining, South Africa.

Larsen & Toubro Limited rose 1.76% to Rs 1,672.55 after the company secured orders aggregating Rs 747 crore from various customers like Coal India, Indiabulls Power Limited and Hindalco Industries Limited.

MIC Electronics Limited rose 2.61% to Rs 39.30 after the company received an order for supply of LED display screens for the Common Wealth Games 2010 at New Delhi.

Nagarjuna Construction Company Limited rose 3.55% to Rs 187.95 after the company secured six orders aggregating Rs 791 crore from different players for construction works.

Orchid Chemicals & Pharmaceuticals Limited rose 4.61% to Rs 151.00 after the company agreed to acquire US-based generics marketing and sales services company Karalex Pharma LLC through an all cash deal for an undisclosed sum.

Reliance Power Limited rose 2.76% to Rs 156.45 after the company signed an agreement with Indonesia''s Sugico Group to acquire three coal mines for an upfront payment of $100 million or Rs 500 crore.

State Bank of India rose 2.38% to Rs 2,327.05 on reports the state-run bank plans to raise Rs 20,000 crore through a rights issue.

Voltas Limited fell 0.63% to Rs 188.70 after Tata Sons, a promoter, raised its holding in the company by 2% to 25.79% through market purchase between May 7 and June 3.