Sensex Drops; Vedanta Faces India Hurdles

123jump.com Staff
24 Aug, 2010
New York City

Stocks in Mumbai trade down most of the day. State Bank of India expects to earn $2 billion in profit in the current year, record for any bank in India. Cairn India discovers oil and gas in KG basin. India rejects Vedanta

[R]5:00 PM Mumbai – Stocks in Mumbai trade down most of the day. State Bank of India expects to earn $2 billion in profit in the current year, record for any bank in India. Cairn India discovers oil and gas in KG basin. India rejects Vedanta’s bauxite mining proposal in Orissa.[/R]

Sensex Index reversed its early losses, aided by persistent buying from foreign funds, but ended the day down by 97.76 points or 0.53% to close at 18,311.59.

All Asian indexes, except China’s Shanghai Composite declined between 0.1% and 1.3%.

Enthused by its impressive first quarter numbers, State Bank of India said it expects a net profit of Rs 10,000 crore this fiscal year, record among all banks.

The bank recorded 0.4% increase in net profit of Rs 9,166.05 crore in last fiscal year.

China’s Zhuzhou Electric Locomotive Company Ltd, one of the country’s biggest locomotive makers, said it secured over $700 million orders from contracts with India, Malaysia, Singapore and Saudi Arabia. In June this year, it signed a contract to supply subway trains to India.

The world’s leading luggage maker, Samsonite Corp, expects to double its turnover in India in two years, a top company official said Sunday.

“In the first half of the current year, our business grew 52% in India. We hope to grow at similar rate every year and double the turnover every two years,” said Subrata Dutta, Samsonite South Asia Pvt Ltd Managing Director.

Oil-rich Algeria, the second-largest country in Africa, invited Indian companies to participate in a $10 billion project to build an ambitious trans-Saharan gas pipeline originating from Nigeria via neighboring Niger.

“We need foreign partners outside Europe for this 4,000 kilometer long project,” Algerian Ambassador to India Echarif Mohammed-Hacene said, referring to the pipeline, which aims to provide some European companies alternative to Russian gas.

Renewable energy companies in India are expecting a major boost to demand, thanks to the government’s recent regulation that makes it mandatory for power utilities to source about 6% to 10% from renewable sources, and the introduction of the renewable energy certificate scheme.

Greenko Group based in Hyderabad plans to raise its total capacity to 1,000 megawatt by 2014.

Cairn India’s unexplored oil fields in Barmer could turn out as major attractions for bidders in the next auction of oil exploration blocks. Cairn India has exhausted the time limit for its Barmer block (RJ-ON-90/1) in Rajasthan, but a large area remains unexplored.

“Barring the development area where Cairn found crude oil, the government may put remaining area for auction under NELP,” an official in the Directorate General of Hydrocarbon said.

Cairn India discovers oil and gas in Nagayalanka-1Z well, situated in onshore Krishna Godavari basin. The company is evaluating the discovery to assess commercial potential of the find.

India’s environment ministry rejected Vedanta Resources Plc proposal to mine bauxite in Orissa, thus hampering the London-listed company’s plans of expansion in Aluminum sector.

The government will issue a show cause notice and take penal action against Vedanta for violating various laws, Minister for Environment & Forests Jairam Ramesh said in New Delhi today.

State-owned energy companies are considering bidding jointly for a stake in Cairn India as Vedanta Resources prepares its bid for the company.

Gainers & Losers

Crest Animation Studios Limited increased 1.8% to Rs 107.70 after the digital animator company''s board approved a corporate restructuring scheme.

Cairn India Limited soared 3.1% to Rs 354.20 after explorer discovered oil and gas in an onshore block in the Krishna Godavari basin.

Cox and Kings India gained 1.1% to Rs594.05 after company said it is planning acquisitions in the US and European markets.

DQ Entertainment plc rose 1.5% to Rs 125.94 after the film company said it has entered into a merchandising agreement with Off Road to produce a collection feature based on the animation from DQE''s series, ''The Jungle Book.''

Edserv Softsystems Limited gained 1.9% to Rs 201.25 after company said its board will meet on August 27 to consider issue of equity shares/warrants/convertible debentures or such other securities on preferential basis.

Gateway Distriparks Ltd increased 1.9% to Rs 109.05 after the company''s unit, Gateway Rail Freight, raised Rs 300 crore via issue of compulsorily convertible preference shares to Blackstone GPV Capital Partners V-H.

Hindalco Industries Limited declined 3.9% to Rs 168.45 after the company’s stock turned ex-dividend for a dividend of Rs 1.35 per share for the year ended March.

Ispat Industries Limited plunged 4.9% to Rs 18.35 following profit taking after the stock climbed nearly 10% in the preceding four trading sessions.

Jet Airways (India) Limited fell 3.8% to Rs 789.25 following profit booking after the stock rose 10.6% in the preceding three trading sessions.

Maruti Suzuki India Limited slipped 0.9% to Rs 1,232.10 after the car maker turned ex-dividend for a final dividend of Rs 6 per share for the year ended March 2010.

NTPC Limited fell 0.1% to Rs 193.55 after the company reported it will be duly compensated for the cancellation of its 600 megawatt hydro-power project at Uttarakhand.

National Fertilizers Limited surged 6.2% to Rs 126.00 after the bio-fertilizer maker reported the company will get Rs 3,850 crore from 13 banks for urea capacity expansion.

Prime Focus Limited gained 2.6% to Rs 578.00 after the company reported board will meet on August 27 to consider stock-split proposal.

PTC India Limited spurted 4.3% to Rs 123.90 after the power trading company financial services subsidiary got ''infrastructure finance company'' status from the Reserve Bank of India.

Rural Electrification Corporation Limited decreased 1.9% to Rs 332.45 after the infrastructure firm turned ex-dividend for a dividend of Rs 3.50 per share for the year ended March 2010.

Scooters India Limited rose 4.8% to Rs 39.75 after the three-wheeler manufacturer reported Mahindra & Mahindra and Atul Auto are interested in acquiring a majority stake in the state-run company.

Tulsi Extrusions Limited fell 0.9% to Rs 49.05 after the company''s board approved splitting each share into 10 shares with a face value of Re 1 each.

Titagarh Wagons Limited gained 2.6% to Rs 416.75 after the manufacturer of railway wagons said a meeting of the board of directors will be held on August 27 to consider issue of warrants convertible into equity shares on preferential basis to the promoter group.

Vishal Retail Limited gained 4% to Rs 56.15 after the lenders involved in the corporate debt restructuring of the company approved the private equity firm TPG Capital''s revised offer to acquire the assets of the company.