Sensex in India Crosses 20,000; India Discusses Foreign Retailers Entry

Chandrasekhar Atreya
24 Dec, 2010
New York City

Mumbai stocks gained in thin trading. The government opens a discussion on direct investment from large foreign retailers as investment drops 38% in the first seven months to October. India looks to limit defense exports to $10 billion as private contractors expand in the nation.

[R]5:00 PM Mumbai, 8:30 AM New York – Mumbai stocks gained in thin trading. The government opens a discussion on direct investment from large foreign retailers as investment drops 38% in the first seven months to October. India looks to limit defense exports to $10 billion as private contractors expand in the nation.[/R]

The benchmark indexes in India closed near high of the day as volume picked up and stocks in metals, capital goods and pharmaceuticals traded higher. The market breadth was positive on the NSE with 1,611 gainers and 1,302 losers.

The BSE Sensex in Mumbai gained 0.45% or 90.78 points to close at 20,073.66 and 2.17% for the week. The CNX Nifty added 31.60 points to close at 6,011.60.

The rupee lost 10 paisa to close at Rs 45.73 to a dollar in Mumbai today.

India plans to cut its defense import bill from the current Rs 40,000 crore to Rs 20,000 crore, Minister of State for Defense M.M. Pallam Raju said today.

The government needs more private participation to achieve this target, he told media persons in Hyderabad after inaugurating the defense and aerospace system integration unit of Nucon Industries, a Hyderabad-based defense equipment manufacturer.

State-owned companies’ initial public offerings have proved to be more beneficial for investors in the past decade than private companies, which tend to price their offers at very high valuations, according to a study.

A study of 243 IPOs, which were listed between 2001 and 2009, by the non-profit organization Midas Touch Investors Association shows that stocks such as Maruti Suzuki and Indian Bank have returned more to investors than companies like DLF and Future Capital Holdings which led to losses for investors.

State Bank of India, India’s largest lender, tapped on Thursday into the Indian debt market to raise short-term funds for the first time in three months, as the banking system continued to face liquidity crunch.

The state-run bank placed privately $225 million of certificates of deposit maturing in March with a yield of 8.97%.

India will try to allocate more radio bandwidth to telecom operators for mobile telephony, the Telecommunications Minister Kapil Sibal said on Thursday, underlining the need for release of more resources for this sector.

“The real problem is that in India we have the lowest volume of spectrum available to the public and the civil community, so we need to increase the amount of spectrum, Sibal told reporters on the sideline of an event.

Electrical components maker Havells India plans to double its capacity for Compact Fluorescent Lamps within the next two years by investing Rs 120 crore, a top executive of the company said.

Havells’ plant in India will produce 10 million CFLs in the next two years, as the company looks to leverage its Sylvania brand, which was launched in India recently, Joint Managing Director, Anil Gupta said in an interview in New Delhi on Thursday.

The government directed state-run banks to report regularly on the financial inclusion program’s outcomes after the much-publicized ‘no-frills’ account failed to achieve Prime Minister Manmohan Singh’s dream of affordable financial services to the poor.

Financial Services Secretary R. Gopalan has written to bank chairmen and executive directors to monitor 1% of new villages that come under inclusion plans and the general managers for 5% villages covered under such plans.

Key policy makers in the government started further discussions on Thursday to liberalize foreign direct investment in multi-brand retail sector that employs millions and also further liberalize the defense sector.

Foreign direct investment to India declined sharply by 37.84% to $12.40 billion in the seven months to October as compared to $19.95 billion in 2009. While China is estimating 11% increase in direct investments to $100 billion at the end of this year.