Sensex Declines 0.7%; India's Exports Surge 50%

Devan Biswas
10 Mar, 2011
New York City

Stocks in Mumbai declined on a weakness in global markets and crude oil traded near recent highs. The latest read on inflation showed a decline in food prices. Exports in February increased 49.8% to $23.6 billion but trade deficit hovered near $8 billion.

[R]5:00 PM Mumbai – Stocks in Mumbai declined on a weakness in global markets and crude oil traded near recent highs. The latest read on inflation showed a decline in food prices. Exports in February increased 49.8% to $23.6 billion but trade deficit hovered near $8 billion.[/R]

Stocks in Mumbai closed lower as the latest read on inflation showed a decline, crude oil hovered near the recent highs and markets in Asia and in Europe were weak.

The wholesale price index in India decreased 0.6% to 186.1 from 187.2 for the previous week.

For the year to the week calculated on point-to-point basis inflation decreased to 13.96% compared to 14.85% for the previous week.

Food price index increase declined to 9.5% at the end of week to February 26 from 10.4% in the previous week. Fuel price index declined to 9.5% in the week from 12.5% in the previous week.

The Sensex index declined 141.97 or 0.7% to 18,327.98 and Nifty index fell 36.60 to 5,494.40.

The rupee closed at 45.80 to a dollar and the price of ten grams of gold edged lower Rs 34 to Rs 21,118.

The prospect of early settlement to popular unrest in Middle East and North African countries are dimming and investors are worried that sustained increase in oil price will spark worldwide inflation and slow down the global recovery.

India’s exports in February increased 49.8% from a year ago to $23.6 billion according to Commerce Secretary Rahul Khullar. Imports in the month increased 21.2% to $31.7 billion.

Exports in the first eleven months or April to February period surged 31.4% to $208.2 billion and imports in the period surged 18% to $305.3 billion and trade deficit of $97.1 billion.

In other news, tax collection also increased marginally in the month.

Direct tax collection increased 20.75% to Rs 336,117 crore in the eleven months to February. The tax collection in February increased to Rs 18.616 crore, nearly flat from January collection.

For the eleven months period corporate tax collection increased 24% to Rs 223,612 crore and individual tax collection increased 14.7% to Rs 112,114 crore.

Stock Movers

Reliance Industries declined 0.9% to Rs 984 and ONGC rose 2.3% to Rs 277.25 as sources tell 123jump.com that the Rs 14,000 crore public offering is likely to be postponed till June.

Banks declined ahead of banking policy review next week. HDFC Bank decreased 0.07% and ICICI Bank declined 1.8%.

Tata Steel declined 2.7% after its group director of procurement said raw material costs in the current fiscal year is expected to increase $1 billion to $7 billion and are likely to increase additional 15% in the next fiscal year.

Reliance Communication decreased 0.4% to Rs 98.95 after the company completed a syndicated loan facility with China Development Bank of Rs 8,700 crore. The company plans to use the loan to pay for mobile spectrum licenses and buy Chinese telecom equipment as early as this month.