Sensex Falls; India

Chandrasekhar Atreya
19 Jul, 2010
New York City

Stocks in Mumbai fluctuated and closed lower. Trade deficit widens in first quarter. Canara Bank net zooms. Reliance Com shares jump on the speculation of stake sale to Etisalat. Torrent Pharma gets tentative US regulatory approval.

[R]5:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai fluctuated and closed lower. Trade deficit widens in first quarter. Canara Bank net zooms. Reliance Com shares jump on the speculation of stake sale to Etisalat. Torrent Pharma gets tentative US regulatory approval.[/R]

Stocks in India fluctuated following mixed market signals and closed lower. Sharp decline in the U.S. indexes on Friday on weaker than expected U.S. corporate results dragged the Asian markets and Indian software companies.

The Sensex index in India decreased 26.36 or 0.15% to 17,929.46 and CNX Nifty index was flat at 5,394.05. Among the Sensex 30 stocks, 15 rose and 15 fell.

On BSE trading, 1,557 stocks advanced, 1,296 declined and 96 were unchanged. Realty stocks fell and capital goods stocks rose. Reliance Industries edged lower.

Rupee edged lower 27 paisa to Rs 47.04 against one dollar.

India’s June exports surged 30% from a year ago to $17.75 billion, for the eighth straight month, Trade Secretary Rahul Khullar said today. Imports for the month rose 23% to $28.3 billion which would widen the trade deficit to $10.55 billion.

For the April-June period while exports grew by 32% to $50.8 billion, the trade deficit stood at $32.2 billion. The current account deficit will not however pressure the rupee, according to the Trade Secretary.

Inflation in India will accelerate even more in July before subsiding because of decontrol of gasoline, according to the government’s chief statistician.

“I expect the inflation to slow between 6% and 7% by November primarily due to the fact that I expect better arrivals on the agricultural front,” said T.C.A. Anant in an interview on July 16 in New Delhi.

Capital market regulator should increase the threshold level of shareholding that would trigger mandatory open offers to 25%, according to the recommendations of the panel formed to review the takeover rules.

The existing threshold is at 15%. The regulator should also insist on companies that seek such takeovers to buy all the equity they do not already own in the target company from the current 20%,” said C. Achuthan, who heads the panel constituted by regulator, while speaking to reporters in Mumbai today. Companies with promoter controlling at least 90% will be delisted.

Tata Steel Ltd, India’s biggest producer pf the alloy, said it has sold on Friday a 27.03% of its stake in Malaysia-based Southern Steel Berhad for $72 million, according to a filing with the Bombay Stock Exchange.

Godrej Properties Ltd, a real estate company, said that its first quarter net rose more than seven fold after it stared selling projects in the cities of Ahmedabad and Kolkata.

Net income doubled to Rs 2,240 crore in the quarter ended June 30, from Rs 298 crore a year earlier, according to a filing with the Bombay Stock Exchange on Friday. The second phase of the Ahmedabad project was fully sold in two days while more than 50% in the first phase was sold, according to the statement.

Sterlite Technologies Ltd, a company making optic fiber cables, has posted a first quarter net income of Rs 5,560 crore in the quarter ended June 30, from Rs 4,550 crore a year earlier, according to a filing with the Bombay Stock Exchange.

Canara Bank its first quarter net profit was Rs 1,103 crore following a surge in lending, against Rs 555 crore in the year ago period, an increase of 83%. For the first time the bank’s net interest margin crossed 3% as net interest income rose to Rs 1,728 crore, recording a growth of 34% from a year ago.

Surging raw material prices as also a faster increase in wage bill and interest costs have failed to dent the margins of early clutch of companies to declare first quarter results. The 65 odd companies that have declared quarterly results have collectively posted a net profit margin of 15%, a tad higher than the previous quarter after fending off a 61% rise in input costs.

The SKIL Infrastructure and Everonn deal is most likely to fall through according to market information. Nikhil Gandhi-controlled SKIL, the promoter of Pipavav Shipyard, was looking to acquire a major stake in Chennai-based Everonn Education, a company that sells information and communication technology products to government and private schools.

Gainers & Losers

ABB Limited fell 2.1% to Rs 854.00 after its Swiss parent said it will not raise Rs 900 a share offer for increasing stake in the company.

Bharat Heavy Electricals Limited dropped 0.5% to Rs 2,425.55 after the company secured a contract for setting up a 1,200 mw thermal power plant in Chhattisgarh. Valued at Rs 2,665 crore the order has been placed on the company by Dainik Bhaskar Power for supplying and installing the main plant package for their upcoming coal-based thermal power project.

Canara Bank added 4.5% to Rs 500.50 after the bank reported first quarter net profit increased 82.5% to Rs 1013.37 crore.

Compact Disc India Ltd gained 6.6% to Rs 63.75 after the company said on Monday it expects to generate revenue of over Rs 300 crore in 2010/11.

Escorts Limited dropped 2.8% to Rs 203.45 after the company reported third quarter net profit surged 106% to Rs 45.84 crore.

Fedders Lloyd Corporation Ltd increased 3.3% to Rs 102.90 after the company secured orders of Rs 55 crore.

IOL Chemicals and Pharmaceuticals Limited fell 0.5% to Rs 52.50 after the company''s board approved issuing 15 lakh warrants to G. Consultants and Fabricators, a non-promoter entity, on a preferential basis.

Oriental Hotels Limited rose 1.9% to Rs 323.05 after the company said its board will meet on July 27 to consider stock-split.

Reliance Communications Limited advanced 1.7% to Rs 190.45 after a media report that Abu Dhabi''s Etisalat was close to buying a 26% stake in the firm for $3.0 billion.

State Bank of Travancore decreased 3.7% to Rs 649.45 after the bank reported first quarter net profit declined 16.6% to Rs 149.80 crore.

Sun Pharmaceutical Industries Ltd fell 1.1% to Rs 1,719.00 after the drugmaker said a U.S. court denied its motion for judgment as a matter of law seeking to reverse an earlier jury verdict in a patent litigation over the generic Protonix heartburn treatment.

Torrent Pharmaceuticals Limited climbed 2.8% to Rs 589.95 after the company received tentative approval from the US Food & Drug Administration to manufacture and market on prescription basis, Montelukast Sodium Tablet, in strength of 4 mg and 5 mg.

Vardhman Textiles Limited rose 0.5% to Rs 285.95 after the textile producer reported first quarter net profit surged 97.2% to Rs 78.72 crore.

VST Industries Limited fell 1.9% to Rs 528.00 after the tobacco and related products business reported first quarter net profit declined 25.2% to Rs 18.02 crore.

Wipro Limited rose 0.1% to Rs 402.75 after the company announced that its board agreed to issue and allot 280,385 equity shares of Rs 2 each pursuant to exercise of the stock options by the eligible employees under restricted stock unit plan 2004 and restricted stock unit plan 2005.