Sensex in India Plunges 2.4%; December Trade Deficit Narrows to $2.6 Billion

Chandrasekhar Atreya
10 Jan, 2011
New York City

Stocks in Mumbai slipped for the fifth day in a row and lost more than 6%. Trade deficit in December narrows to $2.6 billion as exports surge and imports contracts. Gems & Jewelry exports soared 39% to $23.5 billion in the nine months to December.

[R]5:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai slipped for the fifth day in a row and lost more than 6%. Trade deficit in December narrows to $2.6 billion as exports surge and imports contracts. Gems & Jewelry exports soared 39% to $23.5 billion in the nine months to December.[/R]

Indian stocks extended their losses for the fifth day in a row as sentiments turned bearish on profit booking by overseas institutional investors and on interest rate hike fears. The market breadth was negative on the NSE with 2,325 declines against 593 gains.

The BSE Sensex plunged 2.38% or 467.69 to close at 19,224.12 and the CNX Nifty fell by a hefty 141.75 to close at 5,762.85.

The rupee was unchanged at Rs 46.39 per dollar in Mumbai today.

Gems & jewelry exports posted a 39% growth at around $23.5 billion in the first three quarters of this fiscal year, compared to $14.46 billion in the year ago period, according to data from the Gem and Jewelry Export Promotion Council.

India’s exports in December 2010 soared 36.4% to $22.5 billion, the highest in 33 months, while imports contracted 11.1% to $25.1 billion to the lowest in 14 months, leading to a narrower trade deficit of $2.6 billion, the lowest in three years.

The government estimated on Saturday that at least 30% of the targeted $1 trillion investment towards infrastructure development in the next five year plan ending 2017, will come from overseas.

“We aim to invest $1 trillion in the infrastructure sector in the 12th plan period. We hope that 30% of the proposed investment will come from overseas funds,” Road Transport and Highways Minister Kamal Nath told reporters on the sidelines of the 9th Pravasi Bhartiya Divas in New Delhi on Saturday.

Indian Prime Minister dedicated to the nation on Friday a 100-ton annual capacity reprocessing plant at the Bhabha Atomic Research Center in Tarapur, Maharashtra which will use spent fuel from indigenous nuclear power plants for fast breeder reactors and said the plant was essential for India’s closed-fuel-cycle three-stage nuclear program.

The government’s expenditure on education in the 12th five year plan will be increased to $100 billion from the current $70 billion, the Prime Minister’s advisor on education and innovation Sam Pitroda said in New Delhi on Friday.

Nippon Steel Corp said on Friday that total investment in its proposed automotive steel sheet joint venture with Tata Steel Ltd will be 40 billion yen or $479 million. The two companies said that the plant will start producing 600,000 tons a year of cold rolled automotive sheet steel in India in 2012.