Sensex in India Surges 1.9%; Food Inflation Worries

Devan Biswas
03 Feb, 2011
New York City

Stocks in Mumbai surged tracking gains in international markets but elevated inflation tempered the surge. Food prices rose 17.05% and fuel prices increased 11% as demand run ahead of supplies. Ashok Leyland unit sales declined 2% in January.

[R]5:00 PM Mumbai – Stocks in Mumbai surged tracking gains in international markets but elevated inflation tempered the surge. Food prices rose 17.05% and fuel prices increased 11% as demand run ahead of supplies. Ashok Leyland unit sales declined 2% in January.[/R]

Stocks in Mumbai climbed steadily following the gains in international markets however elevated inflation tempered enthusiasm near the closing. The benchmark indexes closed higher for the second day in a row after dropping nearly 12% in the year.

The BSE Sensex gained 1.9% or 358.69 to close at 18,449.31 The CNX Nifty on the National Stock Exchange increased 94.75 to close at 5,526.75.

Rupee declined to 45.99 to a U.S. dollar.

The wholesale price index increased 0.5% to 194.6 from 193.6 for the previous week. For the year to the week inflation increased to 18.44% compared to 17.26% for the previous week.

Food price index increased 17.05% and fuel price index rose 11.6% in the year to Jan 22.

Securities and Exchange Board of India barred 39 entities from trading and accessing securities markets. The companies linked to Walmiki Shah and Pabari Parikh groups were linked to excessive trading volume to create artificial market.

The securities that these two financial groups traded included LGS Global, Spectacle Industries and Goldstone Technologies, Gemstone Investments and Well Pack Papers according to a report by Press Trust of India.

Stock Movers

California Software Company Ltd. rose 0.9% after the information technology signed agreement for selling its outsourced product development business to Alten Europe for Rs 100 crore.

Great Offshore Limited declined 1.5% to Rs 294.15 after the marine construction company said third quarter net profit slumped 96.3% to Rs 1.83 crore.

GlaxoSmithKline Consumer Healthcare Limited soared 6.7% to Rs 2,105 after it reported third quarter net profit surged 58.5% to Rs 53.37 crore.

Greaves Cotton Limited rose 0.6% to Rs 92.40 after the engineering company entered in term agreement with Mahindra & Mahindra to supply single cylinder engines for its three wheelers.

Hindustan Construction Company Limited soared 4.2% to Rs 37.05 after the infrastructure company secured contract worth Rs 345.30 crore from Narmada Sarovar Nigam, a state government undertaking.