Six-day Rally in India Stocks

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

Stocks in India extended it gains to the sixth day today as the market was buoyed with earnings growth across all sectors. Higher advance tax payment by most Indian firms supported domestic index gains.

[R]5:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai traded higher after earnings growth was seen across all sectors. Strong global sales boost Tata Motors. TCS gains on higher advance tax payment. Acquisition of thermal power project powers Gammon Infrastructure. RNRL rose 32% in three days. Cairn India starts pipeline for crude oil supply from Barmer.[/R]

Stocks in India extended it gains to the sixth day today as the market was buoyed with earnings growth across all sectors. Higher advance tax payment by most Indian firms supported domestic bourses.

Cement shares declined on fears sales will slow down during the ongoing monsoon season. Capital goods stocks declined on profit booking. IT stocks rose on higher advance tax payment by IT giants Infosys and TCS. Auto stocks gained as first quarter June 2010 advance tax payments from frontline auto companies surged.

The Sensex index in India increased 50.04 or 0.29% to 17,462.87 and CNX Nifty index rose 14.00 or 0.27% to 5,236.35. Among the Sensex 30 stocks, 16 rose and 14 fell.

On BSE trading, 1,528 stocks advanced, 1,278 declined and 117 were unchanged.

Rupee edged higher 17 paisa to Rs 46.39 against one dollar.

India is proposing to levy a capital gains tax on all stock transactions by Indians and overseas funds, in an effort to boost revenue and cut the budget deficit from its 16-year high.

The new proposals by the Finance Ministry include a move to tax investments in stocks and equity-linked mutual funds at the applicable tax rates for income, according to a document posted on the Web site of the ministry. The direct tax code also proposes to allow a deduction at a specified percentage of investments that are held for more than a year.

The government needs to present the revised draft of direct tax code to lawmakers in parliament and needs to be voted in favor, for the proposal to become law.

Gokaldas Exports Ltd, who employs 47,000 people at its 46 factories in the state of Karnataka, is planning to start making suits and industrial clothing as demand revives in its largest market, the United States. The Bangalore-based company will spend Rs 1,000 crore this year to add new capacity.

We ran to European markets when there was a recession in the U.S. and now we are looking towards the U.S. market as the debt crisis envelops Europe, said the company’s Executive Director Dinesh Hinduja at his office in Bangalore yesterday.

Cairn India on Tuesday announced that it has started crude oil supplies from its Mangala oilfield in Rajasthan to Reliance Industries and Essar Oil through the newly laid heated and insulated crude oil pipeline.

“The company and ONGC, its 30% partner in Rajasthan block, have commenced sales through the world’s longest continuously heated and insulated crude oil pipeline,” Cairn said in a statement in New Delhi.

Fertilizer cooperative major, Indian Farmers and Fertilizers Ltd has announced plans to invest Rs 500 crore in the next three years to scale its production up by nearly 30%.

“We are planning to invest Rs 500 crore in three years to retrofit the existing DAP plant with pipe reactor technology and increase the output by 30%,” IFFCO Paradeep Unit Executive Director. M.R. Patel told visiting journalists in Paradeep yesterday.

Gainers & Losers

ABM Knowledgeware Limited rose 4.4% to Rs 55.80 after the extending gains for the fifth consecutive day, after the company secured an order of Rs 60 crore.

Cairn India Limited rose 1.5% to Rs 309.75 after the company said on Tuesday it has started transporting crude oil from Barmer field in Rajasthan through a new 590 km continuously heated pipeline to its customers, bringing the transportation cost down by almost 85%.

Exide Industries Limited rose 2.6% to Rs 125.95 after a block deal of 7 lakh shares or 0.08% equity was struck at Rs 123.50 on BSE in early trade.

Gammon Infrastructure Projects Limited gained 7.4% to Rs 28.05 after the company said that it recently entered into an agreement to acquire a 250 megawatt coal based thermal power plant in Western India.

Gokaldas Exports Limited rose 3.1% to Rs 144.00 after the company plans to start making suits and industrial clothing as demand revives in the US.

HDFC Bank Limited rose 0.7% to Rs 1,974.50 after the bank paid Rs 315 crore in advance tax in first quarter June 2010, up 26% from Rs 250 crore it paid in first quarter June 2009.

Jay Shree Tea & Industries Limited fell 1.4% to Rs 249.40 after the turning ex-dividend for a dividend of Rs 6 per share.

Mahindra & Mahindra Limited added 3.1% to Rs 627.00 after the company made a payment of Rs 63 crore as advanced tax compared to Rs 17 crore in the year-ago period.

PBA Infrastructure Limited rose 0.6% to Rs 75.30 after the company received Rs 14.33 crore road construction contract in Nagpur.

Reliance Natural Resources Limited rose 2.9% to Rs 68.80 after the company is likely to sign a gas deal next week with Mukesh Ambani-controlled Reliance Industries.

Suven Life Sciences Limited rose 4.9% to Rs 29.90 after the company announces today that the Japanese patent office has issued two product patents: 4455992 and 4473120 to their new chemical entities which is for the treatment of disorders associated with neurodegenerative diseases and these patents are valid until 2022.

Tata Motors Limited added 2.6% to Rs 780.00 after the vehicle maker said on Tuesday it had sold 79,819 vehicles globally in May, 50% more from a year earlier.

Tata Consultancy Services Limited rose 1.0% to Rs 773.60 after the company paid Rs 128 crore in advance tax in first quarter June 2010, up 142% from Rs 53 crore it paid in first quarter June 2009.

Wipro Limited advanced 0.4% to Rs 410.35 after the company''s American depository receipt rose 4.33% to $22.19 on the New York Stock Exchange on Tuesday, June 15.