Sensex in India Rebounds; Hero to Buy Honda's 26% Stake

Devan Biswas
08 Mar, 2011
New York City

Stocks in Mumbai rebounded on the second day after a regional party that earlier withdrew its support to the ruling coalition in New Delhi. The slight decline in oil price also lifted sentiment in trading. Hero Investments agreed to acquire the 26% stake from Honda in Hero Honda.

[R]4:30 PM Mumbai – Stocks in Mumbai rebounded on the second day after a regional party that earlier withdrew its support to the ruling coalition in New Delhi. The slight decline in oil price also lifted sentiment in trading. Hero Investments agreed to acquire the 26% stake from Honda in Hero Honda.[/R]

Stocks in Mumbai rebounded two days after a regional party withdrew support to the ruling coalition and oil price worries receded.

The regional party DMK offered to find a solution to Congress party for the upcoming election in Tamil Nadu state and also commented that it will continue to support the ruling coalition in New Delhi.

Market sentiment recovered after the DMK announcement and indexes opened higher and stayed above 1% mark in the entire session.

The Sensex in Mumbai trading closed up 1.2% or 216.98 to 18,439.65 and Nifty index added 1.06% or 57.65 to 5,520.80.

The rupee closed up at 45.26 to a dollar and ten grams of gold price declined Rs 34 to 21,118.

Crude oil price gains were capped on the speculation that fighting in Libya will halt sooner than earlier expected after Libyan leader Muammard Gaddafi offered to step down and form an interim government on the condition of safe exit for his family.

The rebels in Benghazi and outside Tripoli rejected the offer according to sources contacted by 123jump.com.

Lovable Lingerie commenced its public offering today that is expected to sell 45 lakh shares and raise Rs 93 crore. The proceeds of the issue expected to close on March 10 are used to expand capacity and build a network of retail outlets.

Stock Movers

Hero Honda declined 3% after Hero Investments agreed to acquire 26% stake in the company controlled by Honda Motor for $851 million.

Honda decided to exit the venture after 26 years and plans to sell automobiles and motor cycles through its wholly owned Indian subsidiary.

Reliance Industries gained 0.9% to Rs 948.80 on the speculation that the recent 26% increase in crude oil price in five weeks will help operating margins.

Tata Steel increase 1.9% on the media reports that the company agreed to a venture with Canada based iron miner New Millennium Capital Corp to develop taconite iron ore deposit in Canada.

SEBI said it will investigate Reliance Industries’ issue of 12 crore shares to 38 companies controlled by promoters in 2000.

Mobile telephone services providers closed higher. Reliance Communications increased 0.6% and Bharti Airtel added 3.4% to Rs 334.40.

Outsourcing services providers gained. TCS gained 1.4% and Infosys increased 2.4%.