Sensex Gains 1%; Widespread Rains in India

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
06 Jul, 2010
New York City

Stocks in Mumbai rallied 1% after monsoons rains spread to the rest of India. Cairn India crosses 100,000 barrel per day production mark in Mangala oilfield. MTNL rises on demand for reimbursement of spectrum fee. Ashok Leyland lifts truck sales guidance.

[R]5:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai rallied 1% after monsoons rains spread to the rest of India. Cairn India crosses 100,000 barrel per day production mark in Mangala oilfield. MTNL rises on demand for reimbursement of spectrum fee. Ashok Leyland lifts truck sales guidance.[/R]

Stocks in India gained following three days of decline, after reports confirmed the widespread monsoon in the Northern and Western India. Monsoon rains are critical to revive rural spending and lower food price inflation. For the month of June rainfalls are 15% below long term average but the rapid advance of rains this month has lifted the sentiment.

The Sensex index in India increased 173.04 or 0.99% to 17,614.48 and CNX Nifty index rose 56.20 or 1.07% to 5,292.10. Among the Sensex 30 stocks, 23 rose and 7 fell.

On BSE trading, 1,631 stocks advanced, 1,141 declined and 112 were unchanged. Metal, IT and realty stocks led the rally.

Rupee edged lower 3 paisa to Rs. 46.80 against one dollar.

Monsoon rains have covered the whole of India today, nine days ahead of schedule, according to the weather office.

“Monsoon rains have now covered parts of Rajasthan and Uttar Pradesh, the states that hadn’t been covered by the rain carrying winds,” said Medha Kole, a Director at the weather office.

Tata Steel Ltd, India’s largest steel producer, said the company sold 1.4 million tons of steel in the first quarter to June, similar to a year ago. However, production in the quarter was 8.25% higher from a year earlier at 1.63 million tons, the company said in its statement today.

Bajaj Auto Ltd, India’s second-largest motorcycle manufacturer, is looking to supply low cost cars to be marketed by Renault SA in India after the proposed joint venture by the two to make low-cost cars for India was abandoned.

“There is no need for a manufacturing or a marketing venture, because our responsibilities are distinct. We will just be an original equipment maker for Renault,” said Managing Director Rajiv Bajaj in an interview yesterday in Pune. Bajaj now plans to spend about Rs 500 crore on developing the car and on setting up a plant in Pune, Bajaj said.

Finland-based KWH Mirka on Monday announced setting up of a wholly-owned subsidiary in India to expand its services in the country.

The company, which mainly deals in dry sanding, a method used for polishing surfaces by hand or machine without the use of any lubricant or water, is aiming to capture 10% of the market, estimated to be about 15 million euro, in the next three years.

“We see India as an important market in Asia and that is why we have set up this subsidiary here. It will help us in doubling our revenue from India,” KWH Mirka Executive Vice President, Tom Nordstrom told reporters in New Delhi yesterday.

Cairn India on Monday crossed the 100,000 barrel mark of crude oil production from Rajasthan after Indian Oil Corporation began buying oil from this prolific oilfield.

The Mangala oilfields in Barmer district of Rajasthan is producing 105,000 barrels per day and will reach the peak output of 125,000 barrels later this month, industry sources said.

Gainers & Losers

Ashok Leyland rose 2.5% to Rs 67.15 after the company said sales may exceed the annual guidance of about 85,000 vehicles.

Bafna Pharmaceuticals Limited rose 1.2% to Rs 49.10 after the company''s product clonazepam in 0.5 milligram and 2 milligram strengths got approval from Medicines and Healthcare Products Regulatory Agency of UK.

Beckons Industries rose 1.9% to Rs 8.30 after the company signed an agreement with Hong Kong based Jilani International for transfer of its Algae Technology to South Asian countries.

Bombay Dyeing and Manufacturing Company rose 3.3% to Rs 510.95 after the company plans to sell its DMT/polyester business in Pune.

Deepak Fertilisers and Petrochemicals Corporation Limited fell 2.0% to Rs 150.00 after turning ex-dividend for a dividend of Rs 4.50 per share for the year ended March 2010.

Eicher Motors Limited rose 1.8% to Rs 948.20 after the company’s joint venture VE Commercial Vehicles raised vehicle prices marginally from July 2010, to offset rising input costs and inflation.

Indag Rubber Limited rose 4.5% to Rs 106.20 after the company said that the expansion of plant & machinery at Nalagarh, Himachal Pradesh unit has been successfully completed.

Mahanagar Telephone Nigam Limited advanced 1.4% to Rs 66.00 after the telecommunications minister, A. Raja, sought a refund the money paid by state-run MTNL and unlisted BSNL for 3G and broadband wireless access spectrum.

Mahindra & Mahindra Limited rose 2.3% to Rs 624.75 after the company plans to set up a 250-acre special economic zone catering to the aerospace sector near the Bangalore International Airport.

Polaris Software Lab Limited rose 2.6% to Rs 190.15 after the group company secured an order for one of its software products for an undisclosed sum.

Phoenix Mills gained 1.4% to Rs 219.80 after the Entertainment World Developers will file its draft red herring prospectus with market regulator, Securities and Exchange Board of India by this month-end.

South Indian Bank Limited fell 0.5% to Rs 171.15 after turning ex-dividend for a dividend of Rs 4 per share for the year ended March 2010.

SpiceJet Limited fell 0.4% to Rs 54.60 after the Dubai''s Istithmar today; July 6 sold its 6.9% stake in the company for $25.3 million.

Syncom Formulations (India) Limited rose 4.9% to Rs 35.75 after the company''s promoters have offered to buy back up to 35 lakh shares from minority shareholders at Rs 34 a share.

Thomas Cook (India) Limited added 3.1% to Rs 63.25 after the company entered into a seven-year deal with Delhi International airport and launched nine foreign exchange and travel counters in the newly opened terminal-3 at the New Delhi International Airport.