Sensex Rallies; RBI Lift Rates in India

Chandrasekhar Atreya
27 Jul, 2010
New York City

Reserve Bank of India lifted rates and said it will provide economic assessment every six weeks. Stocks in Mumbai traded higher. MakeMyTrip.com plans to raise $100 million through a listing in the U.S. Fortis decides to sell its minority stake in Parkway ending two month takeover battle.

[R]5:00 PM Mumbai – Reserve Bank of India lifted rates and said it will provide economic assessment every six weeks. Stocks in Mumbai traded higher. MakeMyTrip.com plans to raise $100 million through a listing in the U.S. Fortis decides to sell its minority stake in Parkway ending two month takeover battle.[/R]

The Sensex index in India increased 57.56 or 0.32% to 18,077.61 and CNX Nifty index rose 27.25 or 0.50% to 5,445.85. Among the Sensex 30 stocks, 26 rose and 4 fell.

On BSE trading, 1,554 stocks advanced, 1,296 declined and 121 were unchanged.

Shares of 12 banks rose between 0.5% and 2% after the Reserve Bank of India raised repo rate by 25 basis points, reverse repo by 50 basis points and left cash reserve ratio unchanged at a quarterly monetary policy review today.

Rupee edged higher 18 paisa to 46.86 against one dollar.

The Reserve Bank of India increased key interest rate in an effort to contain surging inflation. The central bank increased the repo rate to 5.75% from 5.5% and the reverse repo rate to 4.5%.

The Reserve Bank of India said Monday on the eve of its first quarter review, the monetary unwinding that started in October 2009 should continue till “inflation expectations are firmly anchored and brought down.”

MakeMyTrip Ltd, India’s largest online travel company, plans to raise as much as Rs 47,000 crore or $100 million on the Nasdaq stock market to become India’s first such company to list in the U.S. in four years. In 2005, Mumbai-based WNS Holdings Ltd listed on the New York Stock Exchange.

The IPO is managed by Morgan Stanley, Oppenheimer &Co, and Pacific Crest Securities, according to a filing with the U.S. regulator.

Fortis Healthcare on Monday said it will sell its 25.37% stake in Singapore-based hospital chain Parkway Holdings to Malaysia’s Khazanah for over $800 million. This will pave the way for Khazanah to takeover Parkway for $2.5 billion ending the merger rivalry between Fortis and Khazanah for two months.

Describing the development as a win-win situation for both companies, Fortis Chairman Malvinder Singh said, “while we believe that Parkway is a good asset, but every asset has certain intrinsic value that led us to believe that we should divest our stake in Parkway. We have taken into account what is best for every shareholder of Fortis.”

With wind energy industry showing signs of a pick-up, Suzlon Energy, the largest wind turbine company in India, is receiving sustained orders. In an interview with The Hindu, Suzlon said the company had a healthy order backlog.

Out of 5,000 megawatt power capacity, Tamil Nadu accounted for 1,500 megawatt. The President of South Asia and Middle East Ashok D’Sa said growth in Asia would be led by China and India.

The world’s largest farmers cooperative, Indian Farmers and Fertilizer C-Operative Ltd on Monday said it was negotiating with two global players for setting up an integrated dairy in its upcoming food processing special economic zone in Nellore.

IFFCO is also in talks with a Russian company for setting up a fertilizer plant, Managing Director U.S. Awasthi said. We are negotiating with a firm in U.S. and New Zealand for setting up an integrated dairy in our farm-based food processing economic zone in Nellore, Awasthi told reporters in Mumbai yesterday.

Gainers & Losers

Ashok Leyland Limited fell 0.07% to Rs 71.80 after the company reported first quarter net profit rose 1478.3% to Rs 122.64 crore.

Cadila Healthcare Limited rose 0.8% to Rs 648.55 after the company reported first quarter net profit surged 59.6% to Rs 199.18 crore.

Century Enka Limited dropped 5.5% to Rs 217.50 after the manufacturer of synthetic yarn and tyre cord fabric reported first quarter net profit declined 48.5% to Rs 14.5 crore compared to net profit of Rs 28.3 crore a year ago.

CEAT Limited fell 1.8% to Rs 132.50 after company reported first quarter net profit plunged 76.9% to Rs 13.9 crore compared to net profit of Rs 60.2 crore a year ago.

Diamond Power Infrastructure Limited rose 0.7% to Rs 209.15 after the manufacturer of conductors and cables raised Rs 114 crore by allotting 55.9 lakh shares at Rs 203.80 each to qualified institutional buyers.

Essar Oil Limited dropped 1.4% to Rs 128.60 after the explorer reported first quarter net loss of Rs 70 crore compared to net profit of Rs 169 crore a year ago.

Hindustan Unilever Limited fell 0.04% to Rs 261.40 after the consumer goods company reported first quarter profit fell 1.84% to Rs 533.21 crore.

JMT Auto Limited rose 3.0% to Rs 64.00 after the company reported first quarter net profit surged 139.7% to Rs 1.99 crore.

Jyothy Laboratories Limited rose 2.4% to Rs 281.05 after the company reported first quarter profit rose 16.9% to Rs 25.7 crore compared to Rs 22 crore a year ago.

Larsen & Toubro Limited fell 2.9% to Rs 1,862.80 after the company said its order inflow jumped 63% to Rs 15,626 crore.

Mahindra Holidays and Resorts India Limited declined 6.4% to Rs 510.10 after the company reported first quarter net decreased 60.6% to Rs 13.29 crore.

MM Forgings Ltd gained 7.1% to Rs 90.30 after the company reported first quarter net profit spurted 404.12% to Rs 4.89 crore.

NTPC Limited fell 0.4% to Rs 200.50 after the company reported first quarter net profit declined 16.0% to Rs 1,841.89 crore.

Opto Circuits (India) Ltd fell 2.0% to Rs 258.00 after the company acquired 100% stake in US based Unetixs Vascular, Inc for a cash consideration of about $9.7 million.

PI Industries rose 3.6% to Rs 489 after the company secured an overseas contract worth $31 million for custom synthesis business.

Tech Mahindra Limited dropped 3.0% to Rs 714.70 after the provider of information technology reported first quarter net profit declined 36.4% to Rs 144.31 crore.

Titan Industries Limited rose 1.3% to Rs 2,824.30 after the company reported first quarter net profit spurted 76.5% to Rs 81.28 crore.

Usha Martin gained 1.0% to Rs 83.90 after the company reported first quarter net profit surged 30.6% to Rs 41.86 crore.

Wipro Limited rose 1.0% to Rs 417.45 after the company''s American depository receipt, or ADR rose 1.06% to $19.07 on the New York Stock Exchange on Monday.