Sensex in India Surges 1.7%

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

Stocks in Mumbai traded higher across all sectors after the government permitted life insurance companies to issue policies linked to stocks. Saudi construction firm agrees to buy stake in Maytas Infra. Bonus issue plans at Orbit Corporation and Tata Tea lifted stocks.

[R]5:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai traded higher across all sectors after the government permitted life insurance companies to issue policies linked to stocks. Saudi construction firm agrees to buy stake in Maytas Infra. Bonus issue plans at Orbit Corporation and Tata Tea lifted stocks.[/R]

Stocks in India gained the most in two months in a broad rally after the government allowed life insurers to offer unit-linked plans raising hopes of an investment boost in the equity market.

The Sensex index in India increased 305.73 or 1.74% to 17,876.55 and CNX Nifty index rose 96.60 or 1.84% to 5,359.20. Among the Sensex 30 stocks, 30 rose.

On BSE trading, 1,913 stocks advanced, 921 declined and 104 were unchanged.

Shares of three oil exploration firms rose 0.58% to 1.55% after crude oil price gained nearly 2% in the Asia trading.

Monsoon rains have reached some regions of Gujarat, a leading producer of soybeans, the India Meteorological Department said in its latest forecast.

The Indian rupee gained the most this month after China’s decision to ease the yuan peg raised hopes that exports will go up.

Rupee edged higher 58 paisa to 45.58 against one dollar.

India after changing the rule on unit-linked plans for the insurers on June 18, giving regulatory powers to IRDA, has formed a committee to clarify the jurisdiction issues between the Securities & Exchange Board of India and the Insurance Regulatory Development Authority, the Press Information Bureau said in a statement on June 19.

Unit-linked products are insurance plans that also make investments in equities and debts from the collections made by the life insurers.

After breathing easy during the last few months, Indian exporters are again under pressure from various global economic factors, including exchange rate variations, the evolving euro-zone debt crisis and slowdown in exports to that region.

“An overwhelming 88% of the 278 export firms surveyed said the sudden appreciation of the rupee has affected their margins. Moreover, the rising costs of raw materials, including oil, and the expectation of a hike in interest rates have left them worried,” a recent survey by Federation of Indian Chambers of Commerce and Industry of exporters reveals.

Zydus Cadila Healthcare Ltd has received permission from the Drug Controller General of India to conduct phase-I clinical trial for its oral anti-diabetic molecule, ZYOG1 according to a statement filed with the Bombay Stock Exchange today.

ZYOG1 would represent next generation GLP-1 agents, as it can be taken orally. When administered orally it demonstrated beneficial effects in pre-clinical models on glucose reduction, HbA1c reduction and showed an added benefit of weight loss, with no nausea like symptoms.

The Saudi Binladin Group, the construction conglomerate, has decided to pick up 20% stake in Maytas Infra Ltd, and will invest Rs 300 crore in the company.

SBG executed an agreement on Saturday to invest 20% in Maytas Infra Ltd at Rs 195.30 per share. The agreement was signed in the presence of Indian ambassador to Saudi Arabia, Talmiz Ahmed and Saudi ambassador Faisal H. Frad.

Gainers & Losers

Aqua Logistics rose 3.2% to Rs 496.50 after the company said its board will meet on June 28 to consider stock split.

Astec Lifesciences gained 5.2% to Rs 69.70 after the company entered into a long-term contract to supply an herbicide to a multinational agrochemical major.

BEML Limited rose 1.0% to Rs 1,031.10 after chairman & managing director V.R.S. Natarajan told the media today, June 21, that the company expects sales of about Rs 4,200 crore for the year ending March 2011.

Cadila Healthcare Limited rose 2.8% to Rs 654.40 after the company received phase I clinical trial permission from the drug controller general of India for ZYOG1, a novel Glucagon Like Peptide-I agonist.

Edelweiss Capital Limited surged 12.5% to Rs 476.00 after the board is planning to consider a bonus issue.

Larsen & Toubro Limited rose 2.1% to Rs 1,836.35 extending gains for the third consecutive day, after the company secured orders aggregating Rs 1,440 crore.

Orbit Corporation Limited added 2.0% to Rs 259.05 after the company fixed June 30 as the record date for a 1-to-1 bonus issue.

Dr. Reddy’s Laboratories Limited rose 0.09% to Rs 1,423.60 after the drug maker decided to sell a stake in its domestic formulations business after it decided to spin off the division, the Business Standard newspaper reported.

Schrader Duncan Limited increased 7.2% to Rs 177.90 on reports Schrader Bridgeport International Inc is in talks with industrialist J P Goenka to buy 24% stake in the joint venture.

Setco Automotive Limited gained 5.3% to Rs 252.00 after the company said its board will meet on June 28 to consider bonus issue.

Tata Tea Limited rose 4.4% to Rs 1,183.00 ahead of record date for a 10-for-1 stock split.

Uflex Limited rose 2.5% to Rs 114.90 ahead of a meeting of a committee of directors of the company today to evaluate various options available and raise as much as Rs 750 crore.