Sensex Surges in Earnings Outlook

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

Mumbai stocks surged on the time arrival of monsoon rains and rising earnings expectations. The IMF lifted global economic outlook. Private estimates expect economic growth in India to increase to 8.5% from 7.4% in the previous year.

[R]5:00 PM Mumbai, 8:30 AM New York – Mumbai stocks surged on the time arrival of monsoon rains and rising earnings expectations. The IMF lifted global economic outlook. Private estimates expect economic growth in India to increase to 8.5% from 7.4% in the previous year. Airlines traded higher on the liberal investment policy expectations.[/R]

Stocks in India gained following a global rally in stocks after better than expected U.S. retail sales and the IMF lifted its outlook on the world economic growth. Earnings in the latest quarter are expected to rise as much as 15% and widespread arrival of monsoon rain also contributed to the positive sentiment.

The Sensex index in India increased 180.70 or 1.03% to 17,651.73 and CNX Nifty index rose 69.15 or 1.33% to 5,310.95. Among the index 30 stocks, 27 rose and 3 fell.

On BSE trading, 1,930 stocks advanced, 940 declined and 94 were unchanged. Banking, metal and IT stocks rose.

Three airline stocks rose 0.8% to 4.03% after the government said it will consider allowing foreign airlines to invest up to 26% in local carriers.

Rupee edged higher 18 paisa to 46.85 against a dollar.

The wholesale price index in India increased 1.4% to 306.0 from 301.8 for the previous week. For the year ending in the week average inflation surged to 16.08% compared to 6.85% in the same period a year ago.

Finance Minister Pranab Mukherjee is scheduled to lead the group of ministers focused on energy security as the nation competes with China for global resources.

“The panel is scheduled to meet today for the first time,” said Power Secretary Uma Shankar from New Delhi over telephone. The panel is meeting to consider creation of a sovereign wealth fund with the available foreign exchange reserves to help state-run energy companies like Coal India and ONGC to bid for energy assets.

Car sales growth in India is expected to slow this year as new emission rules push up prices of vehicles. New emission standards that came into effect from April in 13 cities in India have led to price increases.

Passenger car sales may increase 12% in the year ending March 2011. About 1.71 million units are likely to be sold this fiscal year as compared to 1.53 million units sold in the previous year, the Society of Indian Automobile Manufacturers said today.

India’s Coal India Ltd wants to use a proposed sovereign fund to buy mines in Australia and other places that can supply an equivalent of 8% of domestic output as demand for energy rises, a government official said.

India may import or bring in at least 50 million tons of coal from foreign locations in 2017, to bolster local production that’s projected to reach 647 million tons, Alok Perti, Additional Secretary to the coal ministry, said in an interview in New Delhi yesterday.

“We have planned this keeping in mind the nation’s energy security as we can see clearly the demand-supply gap will continue to rise,” said Perti.

Wynn Telecom, a wholly-owned subsidiary of SAR Group, on Wednesday said it is planning to set up a mobile manufacturing unit in Himachal Pradesh with an investment of Rs 270 crore and a production capacity of one million handsets a month.

“Our first made-in-India mobile will be rolled out in August 2011 from the manufacturing unit proposed to be set up in Himachal Pradesh,” said Wynn Telecom Managing Director Arvind Vohra in Ahmedabad while addressing reporters on Wednesday.

HPCL is planning a Rs 25,000 crore crude oil refinery in Ratnagiri, Maharashtra with the capacity of 20 million tons per annum.

Gainers & Losers

Aegis Logistics Limited dropped 2.2% to Rs 391.00 after the company recommended bonus shares issue of two for every three held.

Hindustan Oil Exploration Company Limited rose 1.8% to Rs 241.80 after foreign fund HSBC Bank (Mauritius) bought 0.76% stake in the company.

Infrastructure Development Finance Company Limited rose 1.3% to Rs 181.50 after the company said it will raise Rs 840 crore or $179 million by selling convertible securities to Malaysian state fund Khazanah and private equity firm Actis, the Economic Times reported on Thursday.

Karuturi Global Limited advanced 4.6% to Rs 19.20 after the company said it is planning to raise the prices of each stem by 15% to 20% this year to tide over the spurt in cost of production.

KEC International rose 1.8% to Rs 480 after the company secured orders worth Rs 610 crore in the transmission and cables segments.

Mukand Limited fell 1.3% to Rs 64.65 after the stock traded; ex-dividend of Rs 1 per share for the year ended March 2010.

NMDC Limited rose 0.4% to Rs 264.85 after the company said it is in talks with Russian billionaire Mikhail Prokhorov to acquire four coking coal mines in Russia for securing raw material supplies for two planned steel mills in India.

PTC India Limited rose 1.9% to Rs 101.00 after the company''s subsidiary PTC India Financial Services is likely to list on the bourses between September and November this year.

Reliance Communications Limited rose 1.5% to Rs 187.95 after the company plans to raise about Rs 4,000 crore through a strategic stake sale and institutional offering.

Rossell Tea fell 3.6% to Rs 250 after 1.49% equity stake changed hands in two bulk deals on the BSE today.

Suzlon Energy Limited rose 0.5% to Rs 58.45 after the company secured a second order from Hindustan Petroleum Corporation Limited for a 25.5 megawatt capacity wind power project at the Akal site in Jaisalmer district in Rajasthan.

Wipro Limited added 1.5% to Rs 400.00 after the company''s American depository receipt surged 3.0% to $12.24 on the New York Stock Exchange on Wednesday.

Zenotech Laboratories Limited plunged 12.1% to Rs 99.70 after the Supreme Court upheld Daiichi Sankyo''s plea against the Securities Appellate Tribunal order.