Indian Market Up 24%

Elena
05 Apr, 2006
Mumbai

Sensex in India closed up 109 points or 0.94% to 11,747, a new record. Sensex in India is now trading at a Price to Earnings multiple of 21 for 2007 earnings. Market is adjusting to higher economic growth expectations, easier credit rules for private banks and better earnings from local infrastructure and cement companies.

[R]8:45AM Senses in India adds 4% in three days.[/R]
Sensex Index in India is on a tear. Mumbai Stock Exchange Index is up 24% for the year on liquidity steady economic expansion and liquidity fro domestic and foreign investors. Daily new funds invested in the market are now higher than $120 million a sharp rise from $40 million a year ago and $30 million three years ago. Sensex Index is now trading at Price to Earnings multiple of 21 for 2007 significantly higher than similar ratios in Brazil, South Korea and Hong Kong. But none of these three economies are likely to generate more than 4% economic growth for the year.

Bank stocks have been on the move on the expectations that the Central Bank is soon to announce a revised credit policy for the private banks. Indus Bank closed up 12% to Rs. 55.65, State Bank of India up 1.45% to Rs. 1,010, Bank of India up 3.3% to Rs. 137 and ICICI bank closed up 1.4% to Rs. 622. L&T, infrastructure company, rose 3.9% to 2,645 on the news that the company has been awarded a $115 million project to be completed in three years. Arvind Mills, textile company rose 11% on the news that Fidelity International, American mutual funds company has raised its investment in the company to 5%. Denim maker has suffered on the global decline in denim prices as denim manufacturing capacities have rose in India and China. Local IT company stocks fell between 1% and 3% ahead of earnings from Infosys, Wipro and Satyam Comuter.


[R] 8:15 AM European averages traded flat at mid-day.[/R]
European markets turned flat at mid-day dealings. Stocks opened higher, boosted by strong U.S. markets close, but the lack of catalysts like earnings or economic reports directed investors’ attention to interest-rate hikes and they decided to lock in recent gains. EADS stood out as one of the most notable losers after DaimlerChrysler and Lagardere decided to reduce their holdings in the aerospace concern by 7.5%. Shares of European Aeronautic Defense & Space Co. dropped 3.9%. The German DAX 30 edged down 0.01%, the French CAC 40 lost 0.1%, while London FTSE 100 inched up 0.01%.


[R]7:45AM Asian markets finished higher. The Nikkei dropped.[/R]
Asian-Pacific benchmarks finished broadly higher. The Nikkei was the sole decliner in the region, closing in the negative for a second consecutive session. The Japanese index traded in the positive throughout the session, lifted by technology stocks, but eventually lost ground on profit taking to finish down 0.3% at 17,243.98. Positive sentiment boosted shares of leading tech companies like camera maker Canon, up 3.8% and computer chip equipment maker Advantest Corp., up 3.9%. Across the Region Thailand shares surged to 3.05% after Prime Minister Thaksin Shinawatra announced he would hand in his resignation. China Shanghai Composite climbed 0.8%, Singapore Straits Times rose 0.5%, Australia’s All Ordinaries surged 0.8%, and South Korea’s Kospi gained 0.2%. Markets in Hong Kong and Taiwan were closed for a public holiday.