Sensex In India Falls 0.7%; Reliance Infra, Goodyear India, Bata Soar

Devan Biswas
23 Feb, 2011
New York City

Stocks in Mumbai declined in the final hour of trading as crude oil price increase sparked fears of another bout of inflation. Goodyear India and Bata India reported sharply higher earnings. Reliance Infra soared after it commenced metro link to airport in New Delhi.

[R]5:00 PM Mumbai – Stocks in Mumbai declined in the final hour of trading as crude oil price increase sparked fears of another bout of inflation. Goodyear India and Bata India reported sharply higher earnings. Reliance Infra soared after it commenced metro link to airport in New Delhi.[/R]

Mumbai stocks closed lower for the second day in a row as property developers, banks and technology stocks led the decliners. Stocks in traded sideways but declined in the final thirty minutes.

Trade Minister Anand Sharma said exports rose to $225 billion in the current fiscal year ending in March is $225 billion. The preliminary exports suggested a rebound was driven by a rise in software services, textile and gem and jewelry exports.

Railway Budget is scheduled on Feb 25 and the Union Budget is scheduled on Feb 28. The government is expected to increase infrastructure spending and expand railway services in the northern and north east states.

The Sensex index declined 117.83 or 0.7% to 18,178.33 and the Nifty index fell 31.85 to 5,437.35.

The rupee edged lower to 45.43 a U.S. dollar and gold prices declined Rs 41 to Rs 20,746 per ten grams.

The decliners were lead by Ranbaxy Laboratories, DLF and State Bank of India and Tata Power. The gainers were lead by Reliance Infrastructure, Reliance Capital and Reliance Communications.

Oil & Natural Gas Corp is expected to file a draft prospectus as early as this week to sell 5% stake in the company, according to Chairman A.K. Hazarika.

The sale is expected to raise as much as Rs 13,000 crore or $2.8 billion in the offering according to earlier statements from the company’s finance chief D.K. Sarraf.

The government of India controls 74.14% stake in the company and the oil company is looking to partner with foreign companies to bid for the ninth exploration licensing round that is ending on March 18.

Stock Movers

Reliance Infrastructure rose as much as 13.4% after the company initiated its first airport-to-rail link metro service in New Delhi. The 23 kilometer rail link was initially expected to start operation before the October 2010 Commonwealth Games.

Bata India increased as much as 1.4% after the shoe maker and retailer said quarterly net profit increased 35% to Rs 34.4 crore on sales increase of 23% to Rs 355.8 crore. The company also declared final dividend of Rs 4.

Telecom stocks closed higher. Reliance Communications added 1.5% and Bharti-Airtel added 3%.

Hindalco rose 0.7% and the company said it announced lock-out at a Kerala plant but will have no financial impact.

Airlines declined as fuel prices rose for the third week in a row in international markets and crude oil surged 8% yesterday. Kingfisher and Jet Airways declined at least 0.3%.

Goodyear India soared 4% to Rs 236 after quarterly net soared 104% to Rs 22.5 crore and net sales increased 23% to Rs 339.4 crore.

MindTree Ltd declined 0.3% and said it won two outsourcing contracts from a European company of $70 million that are required to be completed in five years. The operating margins on the contract are expected to be higher than 11.5% company average margin.