7-Day Rally in Sensex; Exports Climb 23%

Chandrasekhar Atreya
15 Sep, 2010
New York City

Stocks in India continued to rally for the seventh day in a row. Cairn India seeks approval from shareholders for Vedanta deal in its AGM. Indirect tax collections surge 45% in the first five months of this fiscal.

[R]5:00 PM Mumbai – Stocks in India continued to rally for the seventh day in a row. Cairn India seeks approval from shareholders for Vedanta deal in its AGM. Indirect tax collections surge 45% in the first five months of this fiscal.[/R]

Stocks in Mumbai rallied for the seventh day in a row after exports surged at the fastest pace in the current fiscal year in August and Asian markets rallied.

The Sensex index in Mumbai trading closed up 0.8% or 155.15 to 19,502.11 and Nifty 50 index added 1.13% or 65.40 to 5,860.95.

India’s exports rose 22.5% to $16.6 billion in August from a year earlier after rising 13.2% in July, Commerce Secretary Rahul Khullar told reporters in New Delhi today. Imports in August were $29.7 billion and the trade deficit surged to $13.06 billion.

The government of India said the country became the seventh largest vehicle producing nation in the world, six years ahead of schedule.

“When we were making the Auto Mission Plan in 2006, we had projected India to become the seventh largest vehicle producing country by 2016. We have already achieved that milestone a good six years ahead of schedule,” said B.S. Meena Secretary for Ministry of Heavy Industry in New Delhi at a FICCI function.

United Spirits, the world’s second-largest spirits maker by volume, said Tuesday it agreed to buy 54.7% share in Pioneer Distilleries at Rs 101 a share at a 45% premium to Pioneer’s closing price on Monday.

United Spirits, a unit of Vijay Mallya’s UB Group said it will also make an open offer for an additional 20% in Pioneer, according to a statement by the company.

Cognizant Technology Solutions may be looking to acquire Genpact according to media sources. Both companies listed in New York but employ significant staffs in India have market capitalization of close to $3.3 billion.

Ess Dee Aluminum, which acquired India Foils from Sterlite Industries in 2008, is poised to mark its maiden entry into the retail market for household aluminum foils, pitching it against the market leader Hindalco Industries.

Even as India continued to register one of the highest growth rates post-independence, rampant corruption resulted in an estimated illicit outflow of a whopping $125 billion between 2000 and 2008, a research and advocacy organization said Tuesday.

“Much of the funds flowing out are generated at home and then sent illegally abroad. So, the growth of corruption and India’s underground parallel economy contributes significantly to these outflows from the country,” said Karly Curcio, a junior economist at the Global Financial Integrity in a blog posted on its Web site.

Higher export prices dragged the country’s onion exports down by 53% to 87,428 tons in August, the fifth month of decline in a row, according to onion export regulator, NAFED.

Hong Kong-based CLP Holdings Ltd, a power producer, plans to bid for large coal-fired plants in India and may sell shares in its local unit, CLP India Pvt Ltd, to fund these projects.

State-run Oriental Bank of Commerce expects to receive capital of about Rs 1,000 crore from the government by March 31. The bank raised Rs 300 crore in perpetual debts and plans to sell another Rs 200 crore of debt within three days, Chairman and Managing Director T.Y. Prabhu said in an interview in New Delhi Tuesday.

Cairn India scheduled to seek shareholder approval to Vedanta Resources’ bid to acquire a controlling stake in the company at an annual general meeting to be held Wednesday. The AGM will also decide Vedanta’s open offer to the minority shareholders for the acquisition of an additional 20% in Cairn India, in line with SEBI norms.

The government’s indirect tax collections surged 45% in the first five months to August lending yet another evidence to the strong industrial growth in July.

Indirect tax mop for the April-August period rose to Rs 124,170 crore, aided by the continued buoyancy in customs collections, data released Tuesday showed. Indirect taxes include customs duty levied on imports, excise duty on goods manufactured in the country and service tax.

Gainers & Losers

Arihant Capital Markets Limited plunged 5.5% to Rs 244.00 after the financial services company rose 8.16% in the preceding three sessions.

Berger Paints India Limited spurted 15.3% to Rs 113.50 after the paint manufacturer said the company expected sales of decorative paints to rise during the upcoming festival season.

CESC Limited gained 2.9% to Rs 419.65 after the power company signed an agreement with Australia-based Resource Generation to purchase 37 million ton of coal for 20 years.

Hi-Tech Gears Limited declined 2.8% to Rs 204.50 after the gears and transmission component maker turned ex-dividend for Rs 4.50 per share for the year ended March.

Hindustan Unilever Limited fell 0.3% to Rs 277.40 after the consumer goods maker’s September second quarter advance tax payment declined 17.6% to Rs 140 crore from year ago.

Hindalco Industries Limited rose 1.6% to Rs 189.50 after the aluminum and copper maker paid advance tax of Rs 140 crore in second quarter of September, double than Rs 70 crore it paid in September 2009.

IFGL Refractories Limited soared 11.1% to Rs 62.15 after the refractory maker for the steel industry allotted 14.50 lakh non-cumulative preference shares of Rs 100 each on private placement basis to the promoter group.

Mahindra & Mahindra Limited rose 0.9% to Rs 676.40 after the credit rating agency CRISIL revised its rating outlook on long-term bank facilities of the company to ''positive'' from ''stable'', while reaffirming the ratings at ''AA''.

Oil and Natural Gas Corporation Limited rose 1.1% to Rs 1,411.25 after the company said it may consider a bonus issue or a stock-split ahead of the government''s plan to divest 5% of its equity in the company through a follow-on public offer.

Pioneer Distilleries Limited surged 4.9% to Rs 76.10 after the promoters of the company agreed to sell 54.69% stake in the company to liquor major United Spirits at Rs 101 each.

Rajshree Sugars & Chemicals Limited decreased 2.9% to Rs 71.50 after the company turned ex-dividend today for dividend of Rs 3 per share for the year ended March.

Roto Pumps Ltd. fell 0.5% to Rs 98.45 after the industrial pumps and spare manufacturer turned ex-dividend of Rs 2 per share for the year ended March.

Steel Authority of India Limited increased 2% to Rs 204.10 after the steel maker entered into a 50:50 joint venture with Indian Railways’ arm RITES to build a wagon-making unit at Kulti near Asansol in West Bengal.

Reliance Industries Limited gained 2.3% to Rs 1,010.45 after reports the company has got up to 25% higher price offers for natural gas it produces from the eastern offshore Krishna-Godavari basin.

Wockhardt Limited fell 0.7% to Rs 274.80 after the pharmaceutical company received approval from its shareholders for preferential issue of up to 40 crore redeemable preference shares.

Wipro Limited rose 2.2% to Rs 426.85 after the American depository receipts advanced 2.16% to $13.70 on the New York Stock Exchange on September 14.

Tata Motors Limited fell 0.2% to Rs 1,024.30 after the automobile company''s American depository receipts gained 2.88% to $23.61 on the New York Stock Exchange on September 14.

Tata Steel Limited gained 1.1% to Rs 603.40 after the steel maker opted to buy 80% of the Direct Shipping Ore project of New Millennium Capital Corp., Canada.

Yes Bank Limited fell 0.4% to Rs 327.45 after reports the bank paid advance tax of Rs 105 crore in second quarter, sharply higher than Rs 58 crore payment a year ago.